Business Irish

Saturday 25 January 2020

Our average debt is almost €10,000 now

We owe four times more than we did in 2008


The average consumer now owes four times more than they did in 2008, stark new figures reveal.

Irish people have become buried in credit union debt and unpaid telephone, fuel and tax bills since the recession kicked in.

The figures, from the company behind the debt defaulters magazine, Stubbs Gazette, show the average consumer now owes almost €10,000 -- compared to €2,442 in 2008. Those living in commuter towns and remote rural counties have been particularly badly hit.

Sligo, which was one of the least indebted counties in 2008, has become the least credit-worthy. The average Sligo consumer now owes about €20,000 -- about 15 times what they owed in 2008.

The Stubbs' figures track debts that have been chased through the courts after an individual was unable to pay telephone, fuel and tax bills, as well as repayments on unsecured loans, such as credit cards, personal loans and credit union loans. The figures do not include mortgage debt.

Along with Sligo, consumer debt has ballooned in Louth, Leitrim, Westmeath, Wexford and Donegal. In Louth, the average consumer debt is about nine times what it was in 2008; in Leitrim, it is eight times what it was that year. The average consumer in Westmeath, Wexford and Donegal now owes seven times what they did in 2008.

James Treacy, managing director of the Stubbs Gazette Credit Bureau, said the figures reflect "the inability of consumers to service loans taken out when the economy seemed to be stronger and earnings more secure".

"The figures are proof the problems go beyond Dublin," said Mr Treacy. "In the smaller counties, a higher proportion of lending comes from credit unions, which have a tendency to more vigorously pursue bad debt through the courts".

Unemployment is another reason behind the explosion of consumer debt. For example, the average consumer debt in Limerick, Clare and Tipperary -- counties which would have been hit hard by the closure of the Dell plant in Limerick a couple of years ago -- is now more than five times what it was in 2008.

Noeline Blackwell, director general of the State's Free Legal Advice Centres, cited the raft of new housing developments in commuter counties as a reason behind the build-up of debt there.

In Laois, for example, the average debt is now almost six times what it was in 2008. "People living in those counties are often commuting to Dublin so have two cars -- and can't keep up the repayments on those car loans," said Ms Blackwell. "Utilities across the board are a huge problem. People are taking chances with utilities and letting the debts slide."

Ms Blackwell said the new figures proved that people were trying to juggle other debts on top of their mortgage debt.

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