Archive for the ‘Debt Matters’ Category

Insolvency figures still at a high despite recovery

Friday, August 27th, 2010

Welcome to the latest edition of my blog and this week I will be discussing the recent insolvency statistics released by the Insolvency Service.

The latest statistics from the Insolvency Service show that though there has been a slight decline in the number of people who declared insolvency in the second quarter of the year, the number still remains a worryingly high.

The data released by the Insolvency Service shows that in England and Wales, 34,743 people entered a formal insolvency procedure to deal with their debts. Of these 14,982 of them entered bankruptcy, 13,466 entered an IVA (Individual Voluntary Arrangement) and 6,295 opted for a DRO (Debt Relief Order).

Compared with the previous quarter, the number of people who entered into a DRO or IVA has gone up. While the DRO figures rose by 11.5%, IVAs were up by 14.3%. However, on a positive note, the number of people who entered bankruptcy went down by 17.9%.

The overall number of people who entered insolvency was down 2.6%, however, the number is still very high when you compare it to the fact that only the previous three quarters have ever seen more people declared insolvent.

The latest figures from the Bank of England also show that more people repaid their unsecured debt than they took on in June – in figures, £98m more.

Debt analysts are citing two reasons for this trend. First, the lenders are showing more caution in lending and second, borrowers have themselves woken up to the fact that in these uncertain economic times, it is prudent to refrain from borrowing more than they can repay.

An interesting point to note is that more people have opted for IVA rather than declaring bankruptcy. Talk to the debt advisors, most of who offer debt advice for free, and they will tell you that an IVA is definitely a better option to bankruptcy given the fact that you can repay your debts in five years and be declared free from any remaining debt at the end of the period. Also, you don’t risk losing your property and other valuable assets.

Thanks,

Nigel

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Could current consultation finally see debt management plans regulated?

Thursday, December 3rd, 2009

There are a range of debt solutions available to help solve debt worries, each specifically designed for different levels of debt, the number of creditors and personal circumstances.  Our debt solutions table gives a handy overview of what options are available and I’d strongly recommended seeking impartial advice from a company like ClearStart, otherwise you could end up being financially worse off than you are now.

For IVAs, there is already a strict protocol for providers to adhere to, which ensures fair and consistent practice throughout the industry.  However, for Debt Management Plans (DMPs), which are the dominant force in the insolvency industry, there is currently no regulation whatsoever.

 A well-run DMP by a company such as ClearStart is definitely worth considering for anyone looking to get their finances back on track. Negotiations are done on your behalf with creditors to arrange a repayment plan at a rate you can afford and in many instances interest is either frozen or applied at a much reduced rate. Once the plan has been agreed, you simply make one easy monthly payment to your debt management company who then distribute it to your creditors until your debt has been cleared.

 In response to the growing debt problem and bad practice by some DMP providers, there is a consultation process currently underway which is being run by the Ministry of Justice, the outcome of which may well be increased regulation of Debt Management Plans – a move which would be welcomed by many in the industry and give much needed peace of mind to anyone entering into a DMP.

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Personal Insolvencies Hit Record Levels as More UK Citizens Seek Debt Management Advice

Thursday, November 12th, 2009

The latest insolvency statistics were released last week, showing that record numbers of people seeking debt management solutions.

I do feel however, that is just the tip of the iceberg and things will get worse before they get better.  With Mintel reporting that 32% of consumers are just managing to get by, even the slightest change to household circumstances could have a severe impact on finances and force more people into looking for debt management advice.

For over 40% of our callers, the main reason they are people falling into debt is due to a period of temporary unemployment. Debt can very quickly build up to unmanageable levels.  This is further compounded if they return to work in a lower paid job, leaving them with a much compromised household budget.

I would strongly urge anyone beginning to struggle with debt, to seek advice early.  By taking charge of the situation, it will ensure they can keep their options open and access the least severe solution. 

At ClearStart we aim to resolve debt problems, rather than allowing them to continue.  Debt Solutions are based on the individual situation and the debt advice is totally free.

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You might be able to save by switching..

Wednesday, October 21st, 2009

Like me, you may have seen in the press and on TV recently that UK residents could face a massive 60% increase in energy bills over the next seven years.

Other everyday costs are also on the increase, including motor insurance and household insurance. It is vital that we all keep a close watch on our regular expenditure. If you are worried about, or are struggling with balancing your income and expenditure every month, there are a number of positive steps you can take – which may enable you to control your expenditure, or even save you money.

Try talking to your existing supplier, your electricity or gas supplier may be able to switch you to an alternative plan. If you speak to your motor or home insurer, you may be able to obtain a cheaper quote by taking a higher excess (which is the amount you agree to pay yourself in the event of a claim).

An alternative is to obtain quotations from alternative providers. You can do this either by contacting providers directly by telephone or via the internet (where ‘online’ discounts are sometimes available).

There are many ‘switching’ websites you can also look at, many of them now advertise on TV and they can make the process of switching easy for you.

Try shopping around to get the best deal for you.  An excellent site that can be used to help people save money is http://www.allixium.com/. Why not take two minutes to visit the site and see what savings you could be enjoying?

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