Archive for the ‘Debt Advice’ Category

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Interest on student loans to rise

Monday, September 6th, 2010

Welcome to my weekly blog and I hope you are enjoying the spat of warm weather! This week, I going to look at student loans, given it’s the that time of year again. According to a report published in The Telegraph, millions of undergraduates could be burdened with higher interest rates on loans driven by the fact that universities were “severely at risk” from budget cuts imposed to service Britain’s debt.

The Student Loans Company (SLC) has confirmed that interest rates on student loans will increase. This means bad news for the millions of students who are still repaying their debt.

According to the new rules, students who took loan before 1998 and those who borrowed later, will now have to pay interest on their debt. The SLC confirmed that those who took on the debt after 1998 will now be charged 1.5% interest. On the other hand, those who borrowed the money before this period will have to pay 4.4% interest on their outstanding balances.

What this means is that people with newer loans amounting to £10,000 will pay £150 a year, and those with older loans of £10,000 will pay £440.

According to estimates, there are over 3.3 million people who are still carrying a student debt from after 1998, while around 355,000 still have `pre-1998 loan debts`.

With the threat of double digit recession looming large, the rise in interest on student loans has further made the picture bleak for those already in debt and those who could find themselves in similar circumstances. The need of the hour is to plan finances wisely and keep expenses in control. Those already in debt, can seek expert debt advice to take control of the situation via different debt solutions like IVA and Debt Management Plan. It may be noted that most companies offer debt advice for free and so seeking expert opinion will not add to your costs.

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Home repossessions can reach 175,000 by 2012

Wednesday, August 4th, 2010

Welcome to my weekly blog and I hope you are all keeping well. This week, I’m going to look at a topic that is close to the heart of many people struggling with debt problems and that is the fear of losing their home.

According to an unpublished report, home repossessions in the UK could reach 175,000 by 2012. The report commissioned by the Department for Communities and Local Government last year, was compiled when the economy was in a much worse state than now.

The Council of Mortgage Lenders says that there were 47,700 repossessions last year. For this year, it’s predicting not more than 53,000 repossessions.

The drop in the figures can directly be attributed to the fact that the economy is rising from the recession. However the drop in the numbers predicted this year does not mean that repossession is not a serious problem. If 53,000 homes are taken back this year, it means that more than 1,000 households a week will be affected. This further means thousands of people will be left homeless and this by no means is a small figure.

If you are behind with your home loan, remember that by taking measures now you can ensure that your home remains safe. One measure that you should immediately take is to seek debt advice. If you are worried about further costs, there are  a number of companies that will provide debt advice for free and it can throw light on the various debt management plans and debt solutions available that can help you get hold of your debt situation before it spirals out of control.

You can consult a number of debt management companies for free debt advice to study the range of options available. Based on the information you receive, you can then decide to opt for a debt management solution that best meets your circumstances.

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Fake loans warning for those in debt

Monday, July 19th, 2010

The Citizen Advice Bureau has issued a warning for borrowers struggling to get credit from their banks and building societies. They have been urged to beware of companies offering fake loans for a fee.

The agency says that it has enough evidence to prove that there are bogus companies out there in the market who are preying on people who are already in debt. These companies offer fake loans by advertising directly on the internet or sometimes via a cold call or text. The modus operandi is to persuade borrowers to pay an initial set up fee that can range from anything between £35 to £2,000 to secure a loan, and then ask for bank account details too. As you may have guessed, the promised loan then fails to materialize.

Director of policy at Citizens Advice, Teresa Perchard, said: “In a recession loans can be hard to get, and people falling into debt or unable to get mainstream credit are being targeted with ads and direct contacts offering loans that really are too good to be true.”

She further pointed out that the problem is further likely to be compounded with public sector cuts because of cutbacks in services such as Trading Standards that are in a position to crack down on rogue lenders. 

Research conducted by R3, a trade body for insolvency practitioners, shows that up to 67,000 or 7% of people struggling with debts have contacted a loan shark or doorstep lender, while a further 13% have considered doing so. 

R3 president, Steven Law, said: “Going to this source for financial resolution will simply build up a larger store of debt and create more pressure and stress. We must highlight the importance of obtaining professional advice over panic measures that will worsen the problem.

“Post-recession we stand on the brink of a personal insolvency crisis that will take years to work through the system, as this finding indicates.”

Stress does take its toll when you are in debt but it is essential to proceed cautiously and seek debt advice before deciding on a course of action. Most reputed debt management companies in the UK offer debt advice for free and by consulting them you can avoid falling into more difficult situation.

There are many debt management plans like an IVA (Individual Voluntary Arrangement) that enable you to pay off your debt without taking further loans. Remember, advice and help is at hand if you’re struggling and help and guidance.

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11% of the UK population having problems in repaying debts

Thursday, July 15th, 2010

Going by the recent government figures, Britain seems to be caught into one of the worst credit binges in history with about 11% of the UK population having problems with repaying their debts. More alarming is the fact that the figure is continuing to rise.

According to Citizens Advice while it is true that some people took loans they shouldn’t have taken in the first place, there were others who were lent irresponsibly far too much.

Cases of bankruptcies, insolvencies and unemployment are rising. A recent article in the Journal of Health Economics has also noted that there is a direct link between rising debts and mental health problems, highlighting the wider and perhaps a more serious impact that the society is facing.

For the last few years, the government has funded debt advisers to provide the free face-to-face advice to help people understand their financial situation and, more importantly, to help them negotiate with their creditors for manageable repayments. The Financial Inclusion Fund is the only dedicated government fund for providing free debt advice.

However, the fund is within the Department for Business, Innovation and Skills, which has to make £1bn of cuts in the coming year, and no decision has been made on whether to continue free provision.

In this climate of austerity, one option is to seek debt advice from reputed debt management companies who can help you deal with your financial problems. If you are dealing with multiple unsecured debts, you can seek a face-to-face meeting with a debt advisor who can give you a clear picture of what’s going on and how you can engage with the problem.

Seeking debt advice can save you a lot of stress, especially if you’re facing eviction, have rising multiple debts, complex financial problems, and bailiffs knocking at your door.

So remember, free advice and help is available for you to take advantage of and we are always happy to give you the help and support you need.

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New mothers forced to go back to work to deal with mounting debt

Wednesday, July 7th, 2010

Welcome to my weekly blog and I hope you all are having a nice summer and enjoying the World Cup – now from a neutral point of view!

A recent study reveals that more than half of new mothers return to work due to financial pressures, with many cutting their maternity leaves. According to the survey, 56% women admitted they were unprepared for the fiscal impact of having a child. The survey was conducted by the comparison website uSwitch.

The study paints an image which is a stark contrast to that of modern mothers “having it all”. More than half (52%) of those returning to work after the birth of a child do so because of debt problems.

These are some of the highlights of the study:

  • Only 22% women choose to return because they want to continue their career.
  • The average net household income drops by 34% from £3,431 to £2,266 a month while on statutory maternity pay. However, costs soar, with parents spending an average of £2,152 in the run up to the birth on baby items, and a further £2,521 – more than a month’s reduced net household income – after the baby is born.
  • The average amount saved in anticipation of having a baby is £3,265, but 56% of the 1,000 mums questioned for the survey said they were not fully prepared for the impact of surviving on a reduced income.
  • Nearly a third of new mums were not aware of their company’s maternity package when they decided to have a baby.
  • More than four in 10 mums have ended up in debt while on maternity leave, incurring an average of £1,329.

Ann Robinson, consumer policy director at uSwitch, said: “Debt and financial considerations combine to be the biggest motivating factor behind new mothers returning to the workplace. Despite women being told that they can ‘have it all’ and can choose whether to be a working or stay-at-home mum, the fact is that most have this choice stripped away from them by the financial realities of modern life.

With the new government planning to cut child trust funds and the impending budget causing concerns over pay freezes and redundancies, family finances are under more pressure than ever. The high cost of living coupled with the often crippling cost of a mortgage means that many households today need two incomes to get by. Unfortunately, new mothers are often paying the price for this by seeing their choices taken away.”

I always stress the importance of seeking impartial and good debt advice. It is the first and often the most difficult step to take but it is also the most important. If you are worried and are struggling, act now.

Thanks

Nigel

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CAB: Additional 2.4 million people sought debt advice in 2009

Tuesday, June 22nd, 2010

Welcome to the latest edition of my blog.  According to the latest annual statistics from the Citizens Advice Bureau (CAB), an additional 2.4 million enquiries for debt advice were received by its call centres in 2009 compared to 2008.

The CAB report shows that of all the calls they received, 34 percent were from people who sought debt advice. In fact, debt advice was the largest topic of advice sought by CAB callers.

The report further shows that compared to the previous year the debts owed to private bailiffs increased by 38 per cent. A total of 19,090 enquiries regarding private bailiffs were made compared to 13,845 the previous year.

Chief Executive of the CAB, David Harker said “We know from our frontline that the human impact of the recession is far from over for people who have lost their job or their home, or both, in the past two years. Yet, there are millions more people struggling with debt and poverty, or missing out on welfare benefits, that Citizens Advice Bureau want to be able to assist.”

Between April 2009 and March 2010 the CAB provided advice on 7.1 million issues which is an increase of 18 per cent on the previous year. Enquiries regarding mortgage and secured loan arrears also increased by 21 per cent over the same period.

David Harker further said, “We were able to help more people last year thanks to some generous additional funding from the government and many local councils. However much of this was short term, and our network of community based services, which rely on the generous help of 21,000 volunteers, may not be able to help as many people in future if funding is cut. It is absolutely vital that we are able to continue to provide the invaluable service we deliver to local communities without risk of major cuts.”

If government cuts are carried out people will still need professional debt advice to help them find a solution based on their personal financial circumstances. Aside from the Citizen Bureau, there are many debt management companies in the UK that are providing free debt advice. If you are in debt, it is important to get reliable, helpful and free debt advice at the earliest.

We ClearStart understand how stressful debt can be and we offer advice on all debt solutions including IVA (Individual Voluntary Arrangement), specific to your needs. Remember, advice should always be in your best interest.

Thanks

Nigel

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Tax rise could mean debt trouble for over-55s

Monday, June 14th, 2010

Tax rise could mean debt trouble for over-55s

Welcome to the latest edition of my blog. The focus this week is on tax rises and in particular the effect it will have on people approaching retirement. A recent suggests that people in the over-55s age bracket are more worried about the impact of tax rises on their day-to-day spending and also on their debt management. Needless, to say the worry is adversely affecting their health also.

The study, which was conducted by Aviva, reveals that one in five people aged over 55 are worried about getting into debt or managing their existing debt as also about the rising cost of living.

The study shows that almost two-thirds (64 per cent) are worried by the possibility of rises in taxation over the coming five years. These fears are the highest amongst those who have just retired amounting to 68 per cent of 65 to 74-year-olds surveyed.

Debt management capabilities of the people have already been hit by the recent economic turbulence. People whose pensions were linked to the stock market between 2008 and 2010 are likely to have witnessed their income drop due to the impact of the recession on share prices around the world. A further rise in taxation would adversely affect their retirement savings for paying off mortgages and other debts.

For people in this age group, it is imperative that they seek debt advice immediately. Most reputed debt management companies in the UK offer free debt advice. Talk to their counsellors in confidence about your debt and they will recommend debt solutions that are tailored to your circumstances. However, as a note of caution it is also important to point out that some companies may not provide you impartial advice. This is because they are backed by certain lenders and so selling their solutions would mean a better commission for them. To play it safe, it is better that you consult more than one company to study the range of debt solutions available.

If Browse through our website and you will find information about the different Debt Solutions available in UK including Debt Management Plans (DMP), Individual Voluntary Arrangement (IVA), Bankruptcy and how to avoid bankruptcy.

I hope you have a nice week and if you’re a football fan like myself, then enjoy the World Cup.

Thanks

Nigel

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Average household in Britain owes £57,950 in debt

Friday, June 4th, 2010

Another day goes by and the nation sees itself further in debt. According to the latest figures, the collective debt of personal debts in Britain amounts to £1,460bn, which means as individuals, people owe more than what the whole country produces in a year.

A more disturbing fact is that the debt problem is only getting worse. The figures for March 2010 show that personal debt further increased by £0.6bn. The interest payments on that debt were £67.8bn in the last year alone. What this means is that the average household now owes £57,950 while the average amount owed by every UK adult is £30,258. Further, the average interest being paid by each household on their debt is about £2,692 each year while £186m-worth of personal interest is paid out each day in the UK.

Apart from mortgages, people also owe an increasing amount on plastic and loans. Studies show that the average consumer borrowing through overdrafts, credit cards, motor and retail finance deals and unsecured personal loans went up to £4,593 per average UK adult at the end of March 2010. Also, a property is repossessed every 11.4 minutes and someone is declared insolvent or bankrupt every 3.69 minutes.

There are various reasons that have contributed to this. The ‘buy now and pay later’ concept is definitely to blame but added to this is the fact that many people have lost their jobs during the recession. Also, the earnings too have taken a nosedive. As a result, people are now in a situation when they are unable to make their monthly payments.

Disturbing as this may sound, what is important to remember is that a bad debt situation can come under control provided you explore all options available. If you are facing serious debt, the first step you should take is to seek debt advice. Most reputed debt management companies in the UK offer debt advice for free. The experts will study your individual situation and suggest whether an informal debt management plan, a debt consolidation loan, or an IVA will help you on the path of recovery or else if everything else fails, you can declare bankruptcy. Seeking debt advice can also help you to understand preventive measures you can take to avoid falling into the debt trap.

I hope you enjoy the weekend and weather and long may it last!

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How to face the threat of bankruptcy

Monday, May 17th, 2010

The record insolvency figures reveal that the economic crisis is far from over and even though the economy is showing signs of revival, it has left a lasting legacy. Going by the reports, more people are expected to go bankrupt in the coming months.

Each year sees more than 100,000 people becoming insolvent and experts warn that if they don’t seek debt advice on time, the problem is not going to go away any time too soon.

Experts attribute the sky-high figures to a debt-lag effect where in bills pile up over a period of time due to overspending at times like Christmas and also because of the ongoing impact of the financial crisis.

Then there are other factors that are responsible for individual debts the most important being the loss of jobs and decreased earnings. Some financial experts also feel that credit was so cheap and plentiful that people were lured into taking loans, using credit cards beyond their means, and taking higher mortgages than they should have.

The ‘buy now and pay late’ culture has also contributed its share to the financial distress. Most people have little idea of how crippling debt can be and once they start getting into debt it becomes hard to avoid falling into a vicious circle.

So how to break out of this vicious circle? 

Well the first and foremost is to seek debt advice. If you are already in debt, this may not seem a viable option because you may not want to add to your expenditure but do realise most reputed debt management companies in the UK offer debt advice for free. You can talk to the financial experts and they will study your financial situation and suggest the best way forward. Usually, debt solutions include striking a deal with your creditors, entering an IVA (Individual Voluntary Agreement), taking a debt consolidation loan, and in extreme cases, declaring bankruptcy. Which is most suitable will depend on your debt level and individual circumstances and so it is important to seek debt advice to understand which option works best for you.

I hope you find this useful and I look forward to any comments you may have.

Thanks

Nigel

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Insolvency figures for the first quarter of 2010 hit new high

Wednesday, May 12th, 2010

Welcome to the latest edition of my blog.

Amidst the turbulent elections and hung parliament and the growing economic crisis across Europe, it has certainly been an eventful week!

Getting away from the continued election debates, last week the Insolvency Service released its latest statistics which showed that more than 35,600 people became insolvent in the first three months of the year 2010. This is equivalent to 566 people a day and what is more disturbing is the fact that the figure is expected to rise higher in the coming months.

This was the fifth consecutive quarter during which the total insolvency figures have hit a record level. Individual insolvencies were up 17.9% on the same quarter last year due to the increasing numbers of consumers trying to meet their debts.

Debt relief orders (DROs), which were introduced in April last year to enable people with debts of less than £15,000 and minimal assets to write off their borrowing without entering into a full-blown bankruptcy, also witnessed an increase with a total of 5,644 people opting to use one, signifying a rise of 6% on the last quarter of last year.

The 2009 saw a total of 134,142 individuals declaring insolvency and despite the recent signs of recovery shown by the economy, they are expected to remain high this year.

Given the above figures, it becomes all the more imperative for people in a bad debt situation to seek expert debt advice on how to deal with their financial problems. There are many debt management companies in the UK that provide free, expert and impartial advice on debt solutions such as IVA, Debt Management Plan and debt consolidation etc. Seeking debt advice before it is too late can help you regain control over your finances and prevent the situation from snowballing to an extent where you are forced to declare bankruptcy.

Nigel.

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