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.

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.

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.

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.

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.

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”

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;.

Text messaging could be an ideal way to curb debt and raise people’s financial awareness as using a mobile phone as an instant messenger service, may help people to gain control of their finances.

Text banking is extremely simple to operate and could allow customers to be informed moment by moment of any activities which are taking place on their accounts. They will be able to set alerts which will inform them when their account may be heading for debt and will be able to act accordingly.

Being made aware of the date of a pending cheque clearance could also stop account holders from facing debt related to high penalty fees, and if an account could be heading for bankruptcy, steps could be made to resolve the situation before it turns into an unavoidable debt.

Half of the nation is equipped to manage their banking online. The mobile phone is a tool which is carried around throughout the day, and could prove to be an ideal debt management solution. This will allow customers to keep a handle on their finances wherever they are in the world, and at any time of the day.

The cost of sending a text message works out a fraction of the price of calling a mobile, which makes it a beneficial option for both clients and businesses.

More people own a mobile phone than a personal computer and in the UK; over 100 million text messages are sent per day, which shows just how many customers could benefit from text messaging as a means of reducing prevalent debt.