The housing charity called Shelter Scotland has seen an dramatic increase in the number of requests for help. The number of people applying for help has overwhelmed the organisation. The charity is so far overwhelmed that they have called on the Scottish government to do more to give households with debt more support.
Estimates say that one in five homeowners in Scotland are facing trouble making mortgage payments.
As reported by the Scotsman Business, KPMG an accountancy firm said that some 20% of people here have admitted to having problems meeting mortgage and debt repayments. This equals about one million people in the country struggling with their finances.
What's worse is that most homeowners feel that they are only going to see things get worse over time. Credit limits are further hurting them because now, more and more lenders are pulling back limits and reducing the amount of risk they are placing themselves into, keeping homeowners and others from using credit as easily.
According to Scotsman Business, KPMG head of personal insolvency Andrew Kennedy had this to say about the marketplace. "Those people who have been robbing Peter to pay Paul, transferring balances from card to card, remortgaging and taking equity out of their property to pay off spiralling debt are fast running out of options. The credit crunch is already seeing credit card companies reducing credit limits and increasing their rejection rates for new customers."
As this happens, the number of repossessions will continue to grow. Mortgage defaults have risen more than 14% and continue to follow the same course moving forward. Many Scotland homeowners are likely to lose their homes.
