Newcastle North MP, Catherine McKinnell, has backed a campaign for a new scheme to help thousands of families regain control of their finances as data from the Bank of England shows unsecured household debt is rising at its fastest rate since the financial crisis.

Debt often strikes when people experience sudden changes in circumstances such as job loss, ill health or disability.  Aggressive action from creditors and pressure to repay debts at an unaffordable rate can lead families to cut back on everyday essentials like food, take out other expensive loans or fall further behind on essential bills. The rise in unsecured household debt has led to increasing concern that households who fall into debt need safer ways to manage their financial difficulties.

In Newcastle North alone, an estimated 3,348 children are living in families with problem debt and analysis from the Children’s Society shows that children in low-income families with multiple debts are more likely to suffer from mental health problems than equivalent families with fewer debts.

Catherine McKinnell has therefore joined calls in Parliament for a ‘Breathing Space’ scheme to be introduced – in a campaign being led by the Children’s Society and StepChange Debt Charity – that would offer people seeking debt advice a 12-month legal protection from mounting interest, charges and enforcement action. It would build on protections offered under the Debt Arrangement Scheme in Scotland, which has made sure that families sticking to an affordable repayment plan agreed with their creditors are not harried or hassled for the duration of that plan.

The Newcastle North MP has also written to the Chancellor of the Exchequer, calling on him to introduce a similar scheme in the rest of the country.

Catherine said:

‘I know from my own constituency casework how quickly things can spiral out of control for families, following what is often a completely unexpected change in personal and financial circumstances.

 ‘And it can’t be right that children’s mental health and happiness is suffering as a result of heavy-handed escalations of debt problems by creditors.

 ‘Families in problem debt need time and space to get back on their feet – and the Breathing Space scheme would provide just that.’