Welcome to Debt Advice Trust Blog

You have left this world and stepped through the golden gate in the sky, your family are grieving your loss and after stumping up a on your funeral, they receive a call from your creditors asking for the thousands you have accumulated over the years.

No, debt doesn’t follow you to the grave; your poor next of kin is burdened with the debt. It is all too common for people to accumulate debt with little or no thought for the future. A great number of people believe that when you die, your debts will be written off. This is, not the case. In fact, the death of the debtor has little effect on the debt itself.

Being confronted by debt after losing a partner is particularly difficult to cope with because on top of their financial problems they are suffering from emotional trauma.

If you are in debt now start looking how to rectify the problem, before you pass it on to someone else. Maybe look at an IVA. IVA stands for Individual Voluntary Arrangement. It is one of the most popular Debt solutions being used in the UK. The benefits of an IVA when compared to Bankruptcy are many, but you should talk to a trained expert to find out which debt solution is best for you.

First step: STOP! Look at your outgoings. If there’s something you are spending that you can stop, then stop it. Cut down your spending as much as you possibly can before taking any steps to consolidate debts.

As an option for people in serious financial problems, Consolidation Loans is a valid - and sometimes lifesaving – method.

Seek professional Debt Help advice, don’t just jump in because the adverts claim you will save a fortune. They spend a lot of money making the numbers fit in the best way for them; they’re not really interested in your best interests.

Be cynical! Caution is ALWAYS the best option with your money. Make the most of every opportunity. Get your finances in hand. Start knowing, where every penny is spent.

Debt can be a de-motivating factor in a person’s life that can keep one from getting a good night’s sleep. It doesn’t mean that debt should be never ending spiral. There are several methods to escape from debt. Here are some important starting points towards Reducing Debt:

1. Discover you’re Budget,
A breakdown of the monthly outgoings and income is the excellent starting point to reveal the root causes of where your money is going. The first thing it will tell you is how much actual money you are actually pulling in (or losing) every month after you take away all the expenses. If there is a net gain, you can use this net gain to pay off debt. If there is a net loss, then you’ll need to go back to your budget to figure out what expenses are drying up your income.

2. Differentiate between ‘Core’ expenses and non-essentials
Now that you have a breakdown of all your expenses, you need to scrutinise the need for each and every one of them. One way of doing this is to categorise them, into essentials, such as food, mortgage, water, utility bills, etc and non-essentials, shopping, eating out, etc. This first pass allows you to identify where you don’t need to spend money on. The next step is to slim-down your expenses. Now that you know what you need to spend to survive, find out if there are ways to cut down on those numbers (eg: cut-down on phone bill by getting a better deal?). Keep in mind that the objective of this step is to come up with the highest possible monthly net GAIN rather than a loss.

Just when you thought the cost of your energy bills couldn’t get any higher; Debt looms on the horizon as the cost of gas threatens to rise.

A demand for over £12 billion has been requested for upgrades or improvements to our gas supply, from the National Grid who control half of the country’s gas mains and three other companies who own the rest.

Ofgem are currently replacing all medium-pressure, ductile iron gas mains which are within 30 metres of people’s homes, as they are more likely to fracture and corrode thus, causing major accidents and in some cases, even death. This is a massive project comprising of 78,000 km of cast-iron and 13,000 km of low-pressure ductile iron mains. Add to this the labour charges and the country has a massive debt on its hands.

We already donate 20% of our gas bills to these companies which works out at around £100 per year, but the increasing cost of replacing and maintaining the pipes have increased, thus pushing customers into even further debt to keep warm this winter.

Householders in the UK could be left with a debt in the region of £1.3 billion thus adding an additional £50 to each householder’s gas bill within the next five years.

Gas companies such as British Gas have already come under public criticism for their inflated prices. Companies are finding it difficult to compete against each other, as customers try to combat debt by
switching to suppliers who offer the most economical plan.

Recent bad weather has had a significant effect on our everyday lives, including food prices, which already contribute to Debt on a weekly basis.

The great traditional fish and chips have also taken a battering as recent floods have destroyed crops, thus pushing up prices. During harvest time, many farmers were unable to reach large amounts of their crops due to appalling weather. This has left huge amounts of food to just rot

At present, Britain is facing a 50,000 tonne shortage of peas as farmers suffered problems operating harvest machinery on land which was waterlogged by torrential rain. As a result, potatoes and others vegetables will rise in price by up to 30%. This may cause you to think twice about adding mushy peas to your takeaway order.

Fish are also increasing in price as global warming inhibits their reproduction and decreases the size of their offspring thus, making them more difficult to catch. Global warming has affected marine life very badly and some of our most popular fish are disappearing to the point, where they may not appear with your chips and mushy peas in ten years time.

Just the average chip butty could add a dent to your wallet as the cost of a standard sized loaf of bread is estimated to increase to over £1, due to bad weather causing significant damage to wheat crops.

This shows that the sheer cost of living is forcing the public into even further debt as the weekly shop becomes even more difficult to afford.

The only way to reduce debt for the elderly is to increase their state pension by at least 50%. Debt help should come in the form of free impartial advice. There are 'not for profit' organizations and charities that want to help you find the right
Debt solutions.

At present, a retired couple need at least £208 a week to survive and a single pensioner needs a weekly sum of £131. This is a stark difference to the £139.60 for a couple and £87.30 that a single pensioner currently receives. These figures show that one in five pensioners are living way below the poverty line, and this figure will continue to increase over the next five years.

Although pensions have increased slightly, this rise does not fall in line with the personal needs of an elderly person. It has been estimated that a single OAP needs to budget around £33.20 per week for food and a couple need at least £63.70. Add to this the cost of travel, special diets, energy costs, housing repairs and other personal needs, and there simply isn’t enough money to cover all of their expenses.

It is estimated that 40% of pensioners have a disability and these would require an even higher increase than those who are fit and able.

With the situation as it currently stands, pensioners will not be able to enjoy the relaxation and peace of mind that they so rightly deserve. They will not enjoy a good quality of life in their golden years, and will spend their retirement worrying about Debt and how to make the pennies stretch.

The British state pension is one of the lowest pensions in the developed world and for many; it is simply not enough to live on.

For many of us, debt is just a way of life but for others, the fear of debt entering their lives can be a nightmare.

Introvert spenders are often embarrassed by their carefulness with money and fear that people will label them boring and unadventurous.

Many are just born with an inbuilt tendency to be careful with money and, as children will often save their pocket money rather than blow it on magazines, sweets or toys. As a child, Laura said “My uncle would often become upset with me because he would give me money to buy myself a treat but I would always save it.” Maybe, even as a child, Laura new that frivolity with money could lead to debt.

Laura says that deep down she knew that saving would buy her the things that she wanted. She dreamt of owning a posh home and nice clothes. When she grew older, she purchased that nice home but never overstretched her mortgage.

Laura describes herself as someone who is not interested in taking huge gambles with money and her self-discipline helps her to stay out of debt. She says that she only purchases the things that she absolutely needs and will shop around for the cheapest and best bargains. She is always aware of the cost of living and will even end phone calls quickly if they are running up the bill. She also uses energy wisely and efficiently and every electrical appliance is turned off if it is not being used.

People have described her as being ‘stingy’ but she likes to think of herself as a solvent person in an insolvent world.

Debt can take the shine off life. Getting debt help is the first step to becoming debt free

The famous painter Picasso quoted; ‘Every act of creation is first an act of destruction’. Similarly, debt can be thought of in the same light as it simply needs to be turned around from an act of destructive spending to creating a debt solution which will calm the storm.

Debt Management is the perfect way to achieve this relief as with a bit of plotting and planning and some careful negotiation skills, you could find the perfect debt solution for your needs.

If you want to keep costs to a minimum then free debt management advice could be the answer. You will only receive a free consultation but at least this will allow you to see exactly what is involved in managing your creditors and you can pick up some valuable tips along the way. These are good reasons to take advantage of any free debt advice available.

Alternatively, you could negotiate with creditors yourself to ask for reduced balances and interest charges. Make a list of all of your creditors and set one day per month aside (preferably pay day) to make sure that they are all paid their agreed new monthly figure.

If you are not the type to roll your sleeves up and take on each of your creditors yourself then a debt management company will do this for you. It is imperative that you find a reputable company so trace the history of each one and look for positive or negative testimonials and press releases. With a good debt management company behind you, your creditors are more likely to co-operate and lower your monthly payment charges.

The Alliance and Leicester Premier 21 Account seems like a good package on the surface but are there hidden flaws, which could force young people into Debt?

The account is aimed at 16 -21 year-olds who are in employment. It is designed to generate high interest to help young people appreciate the value of having a good sum of money in their account.

It is unlikely that many young people will delve into the finer details of the terms and conditions of an account. Most will see an offer and spontaneously sign up then and there. Banks take advantage of the compulsiveness of young people and entice them into their world of clauses and hidden pitfalls.

One thing the bank does not advertise is the fact that a minimum payment of £250 must be paid into the account each month or charges of £5.00 will be instantly added. One other penalty is the £3 per day charge for going overdrawn. This would take a huge chunk out of a young person’s wages, which could be one of the causes of debt. Even if the overdraft has been authorised, there is still a charge of £3 per month for using the facility.

When challenged with these issues, Alliance and Leicester defended this account claiming that they are one of a handful of banks that are supporting young workers rather than students.

Young people should look for accounts that offer high interest rates and enquire if any bank charges will be prevalent with use.

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”