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The level of indebtedness has risen increasingly during the past few years as the 2nd report of the Joint Committee on Social and Family Affairs released in February 2010 has shown. Mortgages have doubled during the past few years together with personal loan growth, but the high level of indebtedness is not caused only by these two. MABS (Money Advice and Budgeting Service) is giving an overview about debts Irish people are experiencing at the moment. In a 3 year period, from 2006 to 2009 MABS’s active case load grew by 43% and another grown can be noticed in the annual figure of the new client figure, which is now 16,600 compared to the number of 11, 630 in 2006.
One of the reasons MABS was set up is to help clients in times of need by assisting with the access to affordable credit; recently the situation is ironical, because now, the biggest difficulties are the results of the fact that credit was given and made available for people who could not afford it.
64% of all debts owed by MABS clients were owed to banks and financial institutions at the end of 2008, from which 33.5% credit card debt, 40.5% was personal loans and 11.5% mortgage debts. In 2009 the average debt owed on a personal loan was €13,000, while in 2006 this was €9,706. In the same period the average credit card debt rose from €3,833 to €8,009. The failure of small businesses has grown, which can be seen in the growing number of people who are willing to end their hire purchase agreement by handing back equipments and vehicles they no longer need. The trend in credit card debt seems to be downward as the statistics of the Central Bank reported: during July 2009 there has been an excess in the repayments on personal credit cards, the total outstand of credit card debt was at €2,914.2 million.
The situation of high indebtedness in Ireland is improving with the help of the developments provided by the Consumer Protection code about how money can be accessed in the upper mentioned areas. The offering of unsolicited increases in credit card limits and pre-approved unsolicited credit to customers is banned, which resulted in the average monthly number of limit increase process automatically by credit card providers was 42 thousand a month.