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Debt worries haunt senior accountants

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5th Aug 2011
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Debt-laden ageing accountants are experiencing financial difficulties due to insufficient retirement planning, according the Chartered Accountants Benevolent Association (CABA).

AccountingWEB members have also voiced concern over the generational demographics issue with many “Baby Boomers” in the profession now looking to make an exit.

However, the rise in financial difficulty among accountants comes as a somewhat surprising trend, given that accountants often advise and audit others on such issues.

A CABA spokesperson told AccountingWEB: “There is an element of when accountants start getting into financial problems they try to maintain appearances and because they have a degree of financial knowledge they’re often very good at hiding and recycling debt. By the time they come to us some of them are in horrendous trouble, often with debt upon debt.”

CABA, which provides support for ICAEW members, has noted a number of worrying trends in debt among accountants that have become more prevalent in the first half of the year.

Many of these accountants have large mortgages or unsecured debt and are having to continue, or restart, work.

CABA’s debt advice team also found that those who have debt problems, even though they are asset rich, are reluctant to realise the value of those assets.

Accountants with their own practices are also using their personal finances to prop up the business and many are facing action from the HMRC for VAT and PAYE.

Helena Coxshall, interim operations team manager at CABA, said: “Many people with money difficulties have been hanging on, recycling their debt and hoping that their personal circumstances will improve alongside better economic conditions but this has not yet materialised.

“The point in the economic cycle where large numbers of accountants were being made redundant has passed but many are still having to adjust to living on a much reduced income, certainly lower than they might have earned before the recession,” she added.

Just this year alone CABA has dealt with 112 debt enquiries and 56 clients with debt related issues.

The number of debt cases has been on the rise and CABA has responded by expanding its resources with no sign that the issue is abating.

A CABA representative told AccountingWEB: “If you’ve got debt problems the team will sit down with you, work through your debt and then try to come up with a structured plan. Part of that may involve negotiating with creditors and guiding you through any legal or financial complications.”

CABA has also seen an increasing number of queries surrounding the use of Individual Voluntary Arrangements and bankruptcy on their ICAEW membership as accountants worry about their ability to rebuild their life following debt.

Coxshall said: “People are understandably worried about how IVAs and bankruptcy could impact on their professional status. In the vast majority of cases, any issues of this kind can be avoided and a long term plan produced with the help of our experts that enables accountants to continue working and reduce their debt over time.

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Replies (2)

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By Peter Bonetti
05th Aug 2011 16:18

Does anyone else wonder .....

who Mike Bassy is going to lambast about this?

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By Steve McQueen
08th Aug 2011 14:58

CABA

In my experiance CABA are a waste of time. I have a very good friend who ended up in a heap of trouble because of ill health and CABA refused to even acknowledge his letters and emails asking for help.

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