The credit crunch is starting to take its toll on home owners in the UK as they struggle to keep up with their monthly repayments on their mortgages, personal loans and credit cards.

With the cost of living continuing to increase due to high inflation and bigger fuel and food bills, interest rates on personal loans and mortgages rising and commission, overtime and bonuses being cut due to the economic slow down, a record number of individuals are unable to balance the household budget and, faced with spiralling debts, are turning in large numbers to debt management plans to ease their problems.

One debt management company, EuroDebt, has said that they have seen the level of applications for debt management plans from home owners increase by 109 per cent over the course of the last twelve months and out of these new applicants, more than 21 per cent are in a position where they already have some level of arrears on their mortgage or home loan.

According to the company, the average level of unsecured debt from applicants over the past twelve months has been £31,685, but rising to around £38,000 at Christmas time. This figure would include personal loans, credit cards and other finance agreements, but does not include mortgages or secured loans.

EuroDebt’s director, Kevin Still said “The number of clients who are home owners looking for help from debt management has more than doubled in the last twelve months. Clearly many people are struggling under the current financial pressures, making it more important than ever for individuals to take stock of their situation before it reaches a critical point. With some careful planning it is possible to take control of the monthly budget and get out of financial trouble.”