Welcome to Debt Advice Trust Blog

When you are struggling for money with debt repayment it can be very tempting to succumb to so called “easy options” such as ‘pay cheque’ loans or ‘pay day loans’ as they are sometimes called. These services act on the premise that you take out a short-term loan (for a month or so) and you pay them back within a set amount of days. This seems like a good option but whatever ever you do – no matter how strapped for cash you are DO NOT take on any further debt, especially this kind of debt.

Interest rates or (APR) for these kind of loans are extortionately high, on average 50% sometimes as much as 96% - meaning on a £2000 loan you will pay back in excess of £3700 – in one month.

Charges are usually hidden or not explained correctly and these types of schemes are aimed at people struggling with money – they do not aim to help you, like they suggest, they aim to make as much money off you in as short amount of time as possible.

If you are struggling with debt, find help via the correct channels with sensible, free Debt Help from a reputable debt advice agency who can give you honest, impartial advice and will not charge you excess hidden fees for such services.

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.

I have discovered that debt and spending is a never ending spiral that can get out of control. When you are feeling depressed or a bit low, it is a very common pattern to treat yourself to a shopping spree. Debt is a very disheartening circumstance to be in.

A shopping addict will apply for several credit cards and store cards, will not think of them as ‘real money’ and go out on a compulsive spend, often purchasing many items they do not need. They will then receive the bill, become low and go out again to combat the depression.

Compulsive shopping or spending is also known by the scientific term 'oniomania'. Debt can take the glimmer from life. Getting Debt Help is the first step to becoming debt free.

Being able to curb your spending is the first step. If you was on a diet, you would stop going to MacDonald’s, the temptation is to overwhelming, so it is probably a good idea restrict yourself from going anywhere near a shop.

Debt Help should come in the form of free impartial advice. There are 'not for profit' organisations and charities that want to help you find the right Debt solutions.

I am a smoking; ironically I am also in debt. I have always thought of smoking as an expensive habit, but until today, I never realised the extremity of wasted money. I t really is in comparison to reaching into my pocket, pulling out a five pound note, and setting it on fire.

I scoured the internet for a calculator to inform me of the
cost of my addiction and the results, based on one packet of twenty a day, average price of £5.20, were £1898 a year.

To start getting out of debt, I need to become smoke free. There is help out there to stop smoking, but there are also little known debt charities. Debt Helpshould come in the form of free impartial advice. Stopping smoking is one of the first steps to becoming debt free and continuing to be so.

If you have the constraint not to spend it, how about putting the money every day, that you would spend on a packet of cigarettes in a jar, and watch the money mound up.

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.

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%.

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

Many people are becoming aware of an important clause tied up in an IVA agreement known as the 24 month no variation clause.

This important stipulation means that IVA contributions cannot be altered for the first 24 months of the agreement, this is legal binding and there can be no variation meeting to alter this set condition.

The clause has been put in place to protect creditors so as they are guaranteed a fixed sum for two years. Otherwise an Insolvency Practitioner (IP) could set up an IVA proposal for a debtor to return 40p in the pound to creditors but call a variation meeting shortly after the IVA has been approved and lower the monthly payments to 35p or even 20p in the pound due to a change in the debtor’s circumstances. This means that an IVA has to be budgeted for realistically so as both debtor and creditor are aware of a fixed monthly payment that they can comfortably afford to pay out/receive each month.

Although this may seem harsh to people who become ill or lose employment, it is simply a way of keeping an IVA an effective and reliable debt solution
.

If exceptions were made to certain circumstances, people would soon start finding further ways to exploit the system and an effective debt solution could lose its credibility. Therefore, it is vital that anyone seeking an IVA is sound in the knowledge that it is a legally binding contract and that they have to cope on an agreed tight budget for at least 24 months.