Posts Tagged ‘debt’

When it comes to debt management UK consumers have a range of options that can help

Wednesday, February 10th, 2010

Have you found yourself in the position where every week or every month the cash coming in simply refuses to add up to the cash going out? Feel like you could do with some debt advice? You’re not alone. As the recession drags on, many debt advice organisations are becoming inundated with requests for information, specifically on debt management. The Citizens Advice Bureau alone now deals with somewhere approaching 10,000 queries a day.

With the average amount owed by every UK adult (including mortgages) standing at £30,226 – that’s 133% of average earnings – it’s little wonder that it feels like you have to run just to stand still.

Often through no fault of their own people are finding that what at first seemed an almost insignificant debt on a credit card or bank overdraft has started to take on a life of its own and slowly spiral out of control. As people have been laid off, overtime cut and wage rises put on hold, so to has the pressure of maintaining a positive bank balance along with keeping on top of monthly repayments.. Some people have inevitably slipped into the red.

Once on the wrong side of the line the big question of course is how to break the circle? What are your options when it comes to debt management?

UK consumers have a number of choices.

• You can look at consolidating your debt by pulling it all together into one loan.
• IVAs (Individual Voluntary Arrangements) – a legal agreement between you and your creditors about how you’ll pay off your debts.
• If you have at least one County Court Judgement against you and debts of less than £5000 you can apply for an Administration Order.
• If you are on a low income and have debts of less than £15000 you could apply for a Debt Relief Order.
• You could declare yourself bankrupt. Bankruptcy can be an involved process and for some might not be the best form of debt management.

Whatever your situation, get someone who is experienced and expert in dealing with debt to advise you on how best to handle your individual debt management. There’s certainly plenty of good quality information available.

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Why an IVA debt solution could help you with serious debt

Tuesday, November 24th, 2009

When serious debts are mounting up, many people fear the spectre of bankruptcy and the devastating impact that can have on your finances, your credit rating and your life as a whole. But seeking debt advice from an independent debt management service and applying for an individual voluntary arrangement (IVA) could be a better way to achieve unsecured debt consolidation on credit cards and personal loans, making repayments more manageable.

An Individual Voluntary Arrangement is a contract between you and your creditors. You pay an agreed monthly sum, usually for 5 years. This is divided up between people you owe money to, who accept the sum in settlement of the amount you owe them. Once the term of that IVA is over, you have the chance to start afresh without the impact declaring yourself bankrupt can have over the long term. Unlike bankruptcy, an IVA does not prevent you from running a business so if you want to start up your own business during the term of the IVA, you can. It could be a way of getting yourself out of debt and back on your financial feet much more quickly.

The first step is to get some IVA debt help – speak to the national debt helpline or to any one of the specialist IVA companies in the UK. In essence, IVAs restructure your payments to creditors so that they become more realistic and effective, putting you back in control of your finances. By opening the lines of communication and sticking to an agreed repayment plan, you reduce the amount of pressure that is often placed on those in debt by their creditors, making life much more manageable.

Bankruptcy is a last resort debt solution and, even though it has become more common particularly during the recession, it still carries a certain amount of social stigma and does invariably affect your credit rating for years afterwards. An IVA helps you avoid this unenviable situation and prevent it from becoming a millstone around your neck for years. Talk to an impartial debt advisor if you think an IVA may help you control your debts.

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Seeking debt help as recession bites – how the economic climate is causing a rise in debt problems

Friday, November 6th, 2009

The recent recession (which the headline writers now say we are slowly starting to climb out of) hit hard and fast. Whilst everyone was quick to blame the banks’ exuberance and penchant for huge bonuses and high risk deals, the truth is that the age of easy credit for all was the real cause of the financial meltdown. Unlike other recessions, this one has hit everyone, from the average man in the street to the high-flying city bankers and the numbers of people seeking debt help has significantly increased. 

Because credit cards, ‘interest free’ credit and other financial carrots were dangled in front of an eager and willing public for so long, many people have found themselves seriously overstretched financially when the doors slammed shut on the easy credit culture of the 90s and as a result more and more people are looking for debt management solutions or even ways to write off debt. A far more cautious financial market is now less willing to repeat the same mistakes of that boom time and is coming down hard on those in financial difficulty. Despite billions being pumped by the Government into the banking industry, there has been very little trickle-down effect to the ordinary consumer, leaving them in as much financial trouble now as at the start of the crisis, and consequently many are seeking debt solutions from IVA companies and debt management services. 

The headlines may claim that the green shoots of recovery mean an end to the current financial crisis. But the aftershocks of one of the worst meltdowns in banking history are still affecting ordinary people with mounting debt problems. The average household debt in the UK (including mortgage repayments) is over £58,000. The average owed by every UK adult is £30,188 (including mortgages). This is 130% of average earnings. So it’s obvious that personal debt is still out of step with income, meaning that the after effects of the recession are set to continue for some time to come.

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A cry for debt help – what to do when you realise your debt is out of control

Friday, October 23rd, 2009

Admitting that your debts are out of control can seem like an admission of failure. But in fact, seeking professional debt advice is actually the first step on the road to regaining control and bringing your finances back into line. It’s not going to be an easy journey and everyone’s experience will be different, but there are things you can do to rectify what initially seems like a hopeless situation.

The first thing to do once you’ve admitted that yes, you do need help, is to get that help. Impartial debt advisors are there to work with you to find options, work out financial plans and help you to get your finances back on track. They will talk you through not only what measures you can take to stop the bailiffs knocking at the door (including unsecured debt consolidation and IVA debt advice) but also your rights as a consumer.

By opening the lines of communication with your creditors, you are giving yourself far more options and a lot more ‘wriggle room’ to get things back on an even keel. By contacting your creditors and stating that you intend to work with them to draw up a mutually agreed pay-back arrangement, you are immediately entitled to a 30 day ‘breathing space’ during which your creditors cannot pursue you for repayment. This gives you a chance to consult with a debt counselling service and to draw up a realistic and effective financial plan to start paying back some of the debts.

Tackling out-of-control debt is not something that you can do on your own. Debt advice services have the means, the know-how and the experience to be able to look at your situation and present you with options. With their help, you can regain control of the situation and begin to get your life back in order, keeping you and your creditors happy and avoiding the stigma of bankruptcy.

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