As the economy’s rise out of recession stalls amidst election squabbles, the British public owe a collective £55bn in hidden debts and are leaving themselves open to eager debt collectors, new research has revealed.
According to research from OnePoll on behalf of the Post Office, almost a third of people hide the reality of their debts from family members. While the average personal debt in the UK is £9,731.51 (excluding mortgages), people only admit to owing half this when talking to a partner or member of their family.
An overwhelming 78% of people who have hidden debt have never confessed to the true extent of their financial dishonesty. Of the 22% who did, many were forced to reveal all after their lies had been exposed.
Worryingly, 16% of women and 28% of men lie about their financial state to partners and could be putting the family home at risk from debt collectors.
Under current law, credit card companies do not have to inform joint owners of an asset, such as the family home, about debts run up by just one of the owners.
Although a co-owner of a property is not legally liable for their partner's personal debts, a lender can demand the equity the debtor owns, meaning, if the case goes to court and a charging order is granted, the property may have to be sold or re-mortgaged.
Andrew Leakey, partner specialising in consumer law at Stephensons Solicitors LLP, says: “It is important to deal with debt problems quickly. If advice is sought early, the issue is less likely to cause a problem. It may be possible to agree a way forward with a creditor in order to resolve a situation.
“There is always a way out of the debt nightmare, and we can help clients deal with their problems in a manageable way. I would urge people to take advice quickly, don’t let the problems build up.”
Alongside financial heartache, people that hide debts from partners and families may suffer from a range of negative effects. 43% of people, for example, say that they have sleepless nights, 32% admit to being more anxious generally, 21% suffer from mood swings and 12% admit to having volatile nerves.
Commenting on its results, Doug Strachan, Director of Financial Services at the Post Office, added: "The recession has put a massive strain on many families and people may be, for the first time, experiencing levels of debt that they cannot control.
“The most important thing to remember is that if you do need to borrow money, make sure you are responsible about it and set out a clear re-payment plan. Managing the debt effectively can mean there is no need to experience the terrible emotional and physical symptoms hiding debt can result in."