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As house prices continue to scale upwards, the middle class are faced with two options, debt from an over-inflated mortgage or a council house.

London Borough Council has been flooded with applications for social housing as families seek accommodation options that they can afford.

Many middle class professionals are finding it more and more difficult to cope with Debt accrued from a lengthy mortgage. Add to this the increases in council tax and stamp duty and even more are handing in the towel and seeking alternative accommodation.

As the housing market demands more and more from buyers, those with their hearts set on owning their own home can expect mortgage rates to increase, and by 2026 a foot on the property ladder will demand ten times the average salary.

London’s increasingly high prices are making it impossible for people to live and work in the capital, as the country becomes divided between the ‘have-nots’ and the ‘have-lots’. The only way to keep the country balanced is to increase the number of homes available for social housing.

London Councils calculate that at least £1.3 billion is needed to supply additional homes for families in the capital. This price will cover 70% of accommodation needed for social housing. Compared with 2006-2008, the amount needed to help curb homelessness has increased by 50%.

Talk to anyone on the high street and you will receive mixed messages regarding Bankruptcy, here are some of the most popular claims.

Total UK personal debt at the end of December 2007 stood at £1,409bn. The average Joe in the UK now sees over half (53%) of their monthly income swallowed by debt repayments. Repossession leapt 30 per cent in the first six months of this year compared with the first half of last year. County court judgments rose 32. 5 per cent and personal insolvencies in England and Wales 33 per cent to more than 62,000 last year.

A spokesperson for MoneySavingExpert.com has advised the public to use balance transfer deals, giving them an interest-free year to pay off credit card debts This is all fine a dandy if you are just in debt with credit cards, but if you are any thing like me and owe money to:

1. Credit Card companies
2. Loans
3. Utilities
4. Catalogues
5. Mortgage

Then a debt consolidation loan may be the answer. A Consolidation Loan can help reduce your repayments and make your overall debts more manageable. But it will also extend your repayment period.

Below are quotes from people who found light at the end of the tunnel with a debt consolidation loan:

“My debt by this point had ballooned to around £25000 including the car financing and I was starting to find things difficult getting ends to meet so I arranged a consolidation loan with which eased some of the pressure”

“Things just started to get out of hand. I owed money for five credit cards, unpaid utilities, vets bills; the list goes on and on. I got a Debt consolidation loan and my monthly outgoings were literally cut in half”

During the last six months, over half a million people in the UK will have missed a mortgage payment as a result of accruing debt.

Missing a mortgage payment normally means that there are further Debt problems down the line such as council tax debt, personal loans or utility and grocery bills to contend with.

If you miss a mortgage payment, it doesn’t mean that you will incur a fine or charge as you would with credit card debt but a missed payment does indicate signs of financial difficulty.

Mortgage and rent payments should be paid first and foremost in order to secure a roof over your head. In the past, people were finding it difficult to cope with continuous base rate increases so any missed payments at that time were an alarm bell for debt help.

Whilst the base rate was cut to 5.5% in December, consumers were hit with the Christmas hype and many are feeling the brunt as they turn the corner and plough through the New Year with credit cards loaded with last year’s spending.

A rejected card or cheque payment on a mortgage balance can result in hefty charges being added to your statements which can vary in rates and rise by up to £100. It may also make it difficult for you to take out a low interest debt Consolidation Loans if your credit rating is tainted with negative marks against you.

People are struggling with debt for many reasons whether it has accumulated from loans and other forms of credit or whether they just want to rid the guilt associated with a mountain of bills

At the end of the day, the only way to relieve the burden of debt is to remove it as easily as possible. This is where debt consolidation can work its magic and integrate all of your outstanding debt into one monthly affordable loan

Debt consolidation is an excellent alternative to Bankruptcy
as it will not leave a bad stain on your credit rating for many years. It will also leave you free to be able to apply for loans and credit cards in the future. Anyone thinking about bankruptcy as a way of alleviating debt should consider debt consolidation and other forms of debt help before embarking on this option.

As everyone has different types of debt, there are many forms of debt consolidation available such as;.

There’s only a few hours left until the end of the year – have you made your New Years resolutions yet? If you spent the most of 2007 worrying about your debt problems, commit to making 2008 the year you get rid of debt!

Resolution 1:
Get debt advice. Talk to a debt counsellor about your finances and see what options you have. Why do you need advice? There are many debt solutions, but the one best for you will depend on your personal situation. A debt counsellor can give you advice based on all the information you give them about your income, expenses, lifestyle and debt.

Resolution 2:
Decide how you are going to get out debt and take action! Whether that be by contacting banks and lenders for a consolidated loan, looking for a debt management plan, talking to an Insolvency Practitioner about an IVA, or visiting your local court for bankruptcy forms.

Resolution 3:
Make a budget (and stick to it!). Don’t let the same debt traps follow you into 2008. Plan out all your incoming payments and expenses and budget your finances. Once you have all your expenses written down, it’s easier to see where all your money is going and where you can make changes – for example, moving into a house with lower rent. Read our advice on increasing your income and reducing your debt for some further advice.

Resolution 4:

Single women who seek debt help should follow the advice of their debt counsellors. If it is advised that bankruptcy is their best option for clearing debt, they should act accordingly.

Nearly two thirds of the UK male population are currently going through bankruptcy in comparison to the two thirds of women who were recommended bankruptcy but refused to go ahead.

Surprisingly enough, more males are becoming bankrupt than women. The girls fight with the stigma attached to bankruptcy and seek alternative solutions which are often drawn out.

One in three said stigma was the main reason for avoiding bankruptcy. Cost was another major factor as many were unable to afford the £475 administration fee.

Women are more likely to experience debt problems as their salaries fail to keep up with their need to be financially independent. Mortgages taken out by single women have doubled over the past two decades and ladies are taking on more debt than ever before.

More and more women are seeking bankruptcy advice but very few are willing to use bankruptcy as a means of wiping the slate clean. As a result, they have missed out on one of the best debt solutions to their problems.

More needs to be done to advise women that bankruptcy can give them a second chance and is also a way of learning from past mistakes. Rather than turning their noses up at bankruptcy, women should realise that it can make all the difference between being able to move on and ending up with years of weighted debt dragging around their heels.

Many people are performing badly in the workplace as worries regarding debt, play on their minds.

Difficulties meeting debt repayments for utility bills, credit cards and personal loans are having a detrimental effect on the health of many employees. With Father Christmas waiting for us to fill his sack with goodies, the situation is likely to become even worse.

Debt and the Workplace

These days, employees are more likely to take time off work for matters relating to stress. At work, they will feel below par and may even turn to criminal activity in a desperate measure to meet the demands of their creditors.

When people are facing extreme debt and possible bankruptcy, outward signs begin to show in their personality such as short tempers, poor relationships with work colleagues and a less focused attitude towards their work.

Independent debt advice can provide a valuable crutch for employees to lean upon and many will benefit from debt consolidation as it can be an ideal way for them to condense outstanding debt into one affordable sum.

Instead of surfing the internet for pleasure or making personal phone calls, employees should use their leisure time to seek out IVA or debt consolidation advice. Many feel that bankruptcy is an only option and become even more desperate. However, there are many other debt solutions available. For those whose monthly expenditure is greater than their income, a debt consolidation loan may be the answer to their prayers.

Senior Citizens are responsible for 7% of all bankruptcies in the UK, which is an increase of 3% in comparison to 2004.

Nearly 7,900 pensioners have succumbed to bankruptcy within the past year. This is a tremendous leap from 2002, when only 900 OAPs became insolvent.

As the average life span increases, the elderly are finding it difficult to survive on their restrained savings. Recently retired pensioners find it difficult to adjust to a substantially reduced income and are falling behind with payments on credit cards, loans and other debt.

Many pensioners have small part-time jobs to help subsidise their pensions but in rural areas, employment is becoming increasingly difficult to find. There is also a lack of free public transport which puts a further strain on their finances.

The older generation find it difficult to come to terms with debt and try to cope by themselves. It is only when they receive constant abuse from creditors that they start to worry. For many, their debt has gone past the point where an IVA or debt management plan would help, and bankruptcy becomes the only option.

Some pensioners re-mortgage their properties so as they can pay off any outstanding debt. However, new debt simply replaces the old and they risk losing their homes.

Pensioners often feel embarrassed about money worries and keep these matters to themselves. They avoid telling family members for fear of becoming a burden.

Reputable debt management companies receive up to 100 telephone calls per day from people who have been given poor IVA advice.

An IVA (Individual Voluntary Arrangement) is an ideal way to reach an amicable arrangement with creditors. This way the debt can be repaid in manageable monthly sums over a period of around five years.

Over the past two years, applications for an IVA have doubled. People choose this option to avoid the stigma associated with bankruptcy. It also allows them to hold on to their assets.

However, it is worth bearing in mind that an IVA may not be the ideal solution for everyone as they do incur fees. Many people are overcharged for an IVA and bogus firms are charging customers large upfront fees for an inferior service. Hence the reason why IVA advice should be sought from reputable debt management companies.

A reputable debt advisor will ensure that he has satisfied set criteria before an IVA is recommended. One of these stipulations is that a debtor must have a minimum of £200 cash per month to survive on and he/she must owe money to at least three individual creditors.

An example of bad IVA advice can be found when a debtor is told that an IVA will not show up on credit records when in fact, it will. However, an IVA can be set up in as little as six weeks and all of your creditors will be taken off of your hands. You simply pay an agreed, affordable monthly payment to your Insolvency Practitioner, which will include a percentage for his fees.