On the plus side, this was actually a 2 decrease on the second quarter of 2007. However, these seemingly optimistic figures may be hiding bad news in the months and years ahead. Experts point out that many of the negative effects of the credit crunch and the problems in the housing market have simply not 'trickled through' yet.



After all, in recent years, homeowners throughout the UK have grown used to rising property values, and the possibility of using their steadily increasing equity to consolidate their debts. Now that house prices are on the way down, many have turned instead to credit cards and other forms of unsecured borrowing to make up any shortfall in their budgets.

Plus, the Bank of England's Q2 2008 Credit Conditions Survey has revealed that lenders had reduced the availability of secured and unsecured credit alike, and that they expected further reductions in the near future. In other words, debt consolidation (both secured and unsecured) may no longer be an option for some of those in financial trouble - but that doesn't mean insolvency is the only way forward. The right debt advice can help them find the debt solution that's right for them.

Debt management is one form of debt help that doesn't rely on any access to further credit. It works like this: the individual in debt asks a debt management company for help, and the debt management company talks to their creditors on their behalf. Depending on the individual's circumstances, these debt management professionals may be able to negotiate some really meaningful concessions. For example, the creditors may agree to accept lower monthly payments, reduce / cancel interest charges and waive fees.

So debt management can help people with both short-term and long-term debt problems. Reducing the cost of their monthly repayments, it brings their expenditure back in line with their income, meaning they don't need to take out more credit each month. It can also help them make headway on their debt: when interest charges are reduced or stopped, it means more of their payments go towards the debt itself, rather than the interest. Finally, many people find that talking to creditors about their money worries isn't easy. On a debt management plan, they can just make the payments - and leave the negotiations to the professionals.