Left with the stigma of being in arrears

Challenging stigma around debt and financial difficulty is what drives StepChange.

Early intervention for problem debt can be truly lifechanging. Yet for the estimated one in eight of our clients experiencing coerced debt, stigma is more entrenched, and victims/survivors face complex barriers to getting their lives, and finances back on track.

Coerced debt is a form of economic abuse where a perpetrator uses threats, force or intimidation to drive a victim into debt, for example by making them take out credit against their wishes, and sadly it’s not uncommon. Our previous research estimates coerced debt affects around1.6 million adults in the UK.

Whilst coerced debt can occur in familial or other relationships, it’s most commonly seen in romantic relationships. Even after someone has left an abusive relationship, the financial impact can last for years, often due to the devastating effect on a victim/survivor’s credit file.

Liz sought help from StepChange when she was dealing with a mountain of debts accrued by her abusive ex-husband, including –among many others –mortgage arrears.

Because these debts were in their joint names, Liz’s credit file had been severely impaired, and for the next11 years, she felt the impact. Liz struggled to buy a car on hire purchase and – due to a job offer being dependent on a successful credit check – she had to explain the abuse she had been through to a new manager, someone that she did not know.

Our new report, Filed Away, explores this issue of impaired credit files after coerced debt has occurred, and why it’s so vital it’s tackled by government with urgency.

As part of the report’s research, we surveyed 569 UK adults who had experienced coerced debt. Shockingly, half (48 per cent) experienced at least one negative impact on their credit record, such as a missed payment, default, or County Court Judgement.

Thankfully, coerced debt is on the policy agenda, and the recent launch of the UK Government’s Financial Inclusion Strategy included a commitment to address the impaired credit files many victim/survivors are left with as a result of coerced debts.

It’s our hope at StepChange that this will translate into a concrete plan soon – bringing together expertise from the credit information industry and other stakeholders.

It is also important that the Scottish Government makes full use of devolved powers, including looking at joint liability when it comes to council tax, and guaranteed access to advice and support for victim/survivors to rebuild their lives.

For Liz, she is finally debt-free and her credit file is now restored, after many difficult years. Yet this is an underestimated, and misunderstood issue, and there could be thousands of people suffering in silence, and repaying debts they did not accrue themselves.

The more we understand coerced debt, and advocate for victims/survivors, the closer we can get to reform and economic justice.

https://www.stepchange.org/