Depression is Normal Side Effect of Debt

Credit card repayments,  mortgage repayments and plenty of other debt loads definitely lead to serious mental health issues, British researchers are now finding. The BBC alone has found that in the United Kingdom, serious debts lead to a sharp rise in prescriptions of medications used to fight depression. Nearly 23 million people currently use anti-depressant drugs and that figure has risen by almost 50 percent over the past four years. The weight of debts in the minds of those who struggle with them, experts say, is clearly linked with mental anguish so severe that those people seek out psychiatric help.

While it has long been believed that debts could create intense psychological pressure for individuals, it has never quite so openly shown that this was indeed the case until very recently. In fact, even the Royal College of General Practitioners’ head has spoken out to say that even family doctors have been seeing more and more cases in which their patients are staggering mentally and emotionally under the burden of severe debt.

Guilt is said to be the leading cause of the trouble, especially in family situations where adults have children to try and care for. The guilt leads to depression and things can rapidly spiral beyond control. This type of emotionally taxing situation can even lead to a break down in family relationships that can cause further stress, thus strengthening the downward spiral for those who do not seek out help.

Money problems and a perceived lack of solutions for mortgage or credit card debt are certainly stumbling blocks to recovery in the UK. With services such as this site provides links to, it is easier than one might think to get real help, but often people face embarrassment or worry in approaching even the most reputable debt advisors. The solution, say consumer financial experts, is to find a way through this fear and to the healing that is possible once better financial arrangements have been made with one’s creditors.

Large Credit Card Debt Could Force Many in UK to Lose Their Homes

Sources in the British media have reported that a very large number of UK citizens are facing the loss of their mortgaged home due to having £30,000 in debts that do not include their mortgage. Most of these debts stem from credit card spending, but the results are looking to be quite dire. While statistics for repossessions in 2011 have said that only around 40,000 people will lose their homes this year, debt industry insiders are saying that this number will more than double due to one important modifier of that debt: interest rates. Once the interest begins to add on its cost, the debts will certainly grow and push many already on the brink of losing their house right over the edge.

One source said that more than 90,000 of those who have been struggling with debts and facing the loss of their house contacted organisations seeking help to manage debt burdens that averaged a little over £30,000 per household. Interest rates are rising and that means that repayments are getting higher for those who have not entered into IVA’s or other debt management plans designed to tackle their debts and bring them back to better financial health. Personal loans and credit card debt lead the way as many continue to flail in an economy that might be about to rebound, but is certainly doing so slowly, at best. Those with middle level incomes have been shown to be most vulnerable since they are looking at nearly immediate loss of home if they lose the primary income source that their household relies on. In today’s economic reality, things definitely look harsh for many people merely trying to keep their heads above water, make eds meet and try to keep a roof over their family.

What is perhaps most disturbing is the fact that one of the UK’s biggest mortgage lenders, Halifax Britain, recently sated that the value of a typical house has fallen by well over £5,000 in 2010 alone. That is not good news for those who are currently trying to pay down a house that they bought when the value was considerably higher. Over all, between March 2010 and March 2011, home values have fallen be almost 3% in the UK. Things are not looking good, according to economists who specialise in the housing markets. Demand for housing is falling. thus lowering prices, and an economic out look that is less than stable means that values are likely to drop further before they get better.

Consumer confidence continues to remain low and financial realities for many in the UK today are not exactly bright. For those with debts, now is a very good time to get back on the road to recovery. You may wish to examine the sites we link to in order to find trusted solutions for your debt needs. After all, relief from debts will definitely brighten your own financial future.

Learning to Avoid Scams That Claim to Eliminate Debt

A recent letter to the editor in the in the Daily Mail’s Money section, has shown that some companies which offer to help get debt written off are actually operating as scams. In one instance, a British woman was approached and offered the chance to have her debts cleared through having them written off. In this case, the debts were in the form of credit card balances and the individual offering to help the woman claimed that they could all be removed if he was paid a fee.

After paying more than £5,000 to have this credit card debt cleared for her, the woman’s primary contact with the alleged scammers began to refuse to respond to her phone calls and emails. This is said by consumer financial experts to be a common type of scam and is generally able to fly because those in debt desperately seek a solution. Believing that they can not receive help any other way, they fall victim to large promises and impractical solutions. In fact, the “solution” the woman was sold on was actually that her case would be passed on to a company that seeks out loopholes to have her credit card debt written off. This questionable type of approach is not generally going to work and, even if it does, tends not to work towards the debtor’s best interest.

A far easier route that actually gets results and is a respected way to handle debts is to enter into a real arrangement with the creditors. This is what Debt Management is all about and it can certainly make life considerably easier for those who choose this route. If you would like to learn more about how Debt Management can help you, please examine the sites to the right which are legitimate debt help firms we have provided links to as a neutral source of information for those in debt.

Shocking Number of Britons Willing to Hide Debt and Lie About It

It turns out that a new survey has revealed a very ugly truth about the epidemic of consumer debt in the United Kingdom today. This survey, conducted by an insurer known as Axa, found that nearly 4 in 10 Britons are willing to lie about their debt problems rather than speak frankly about their own financial health. Some experts were surprised by this revelation since debt management is so easily obtained these days, but other consumer debt experts said they were not surprised due to the stigma still associated with debt today in the UK and much of Europe, as well.

Of those who stated they would be willing to obscure the truth about debt in their lives, 24 per cent of people admitted to survey takers that they already lie about their debts. Things being lied about today run the gamut from debt resulting credit card spending to overdrafts to loans that are not being paid back. Those people said that they, in many cases, deceived family members, friends and even their domestic partners.

To lend a sense of scope to just how vast the UK’s hidden debt problem is, over £4,000 is owed per person, on average, in hidden debts. In all, nearly £50 billion pounds of debt owed by British citizens is estimated to be obscured from the debtor’s closest social connections.

Those between the ages of 19 and 30 years old are most likely to lie loved ones about their debts. This age group also happens to have the most hidden debt per person, on average. Those between the ages of 46 and 50 have the highest levels of such debt.

Reasons for hiding the debt from loved ones varied, but the majority of those surveyed indicated that their own embarrassment and fear of others’ reactions were what motivated them to lie.

In terms of gender, women reportedly lied less than men about their debt issues, but women reported they were hiding much higher amounts of debt per woman. Common causes of hidden debt were drinking, for men, and excessive shopping, for women.

This particular subject is the 3rd most common subject lied about in the UK, right below another money topic: how much a person spent on a given item they bought.

Hidden debt can damage relationship with family and can even trigger a breakdown in relationships. If you fear you have nowhere to turn and you simply can not bring yourself to admit to others the debt you are in, why not explore our links to the right of this article? There you will find a number of trusted advice sources which can help you get out of debt in a way that can suit your life style. Remember, help is always available so you do not have to live a double life.

Baby Boomer Generation Struggling with Heavy Debts in UK

The year 2009 had proven to be a tough one for those entering the retirement age in the United Kingdom with a recent report showing that over 134,000 Britons had sought either an IVA, a Debt Relief Order or even bankruptcy. However, 2010 has been shown to have even more dispiriting statistics with that number rising to more than 135,000 people facing the same types of insolvency. That means, over the course of 2010 around 15 people sought such options each hour throughout the course of the year. While those considered pensioners have made up less than 5% of this group, they are the fastest growing segment. Nearly 15% more Baby Boomers are now reaching this point, having to face retirement with heavy debts they are simply unable to pay down.

According to experts, this makes the Baby Boomers the very first generation that is accustomed to carrying debts throughout the course of their life, in recent times. Loan after loan, say experts, and constant reliance on credit cards, are what has led this generation to its current state. With well over 2 decades of credit under their belts, the debts have just kept on mounting for many of them. A fixed income is now making it even tougher for them to be able to pay down these debts and that is certainly something they are having trouble with. Along with the upward trend of the VAT, interest rates are said to be guaranteed to rise and, along with that, rates for insolvencies. 2011 is not looking to be a good year for insolvencies, with many predicting more than 140,000 for the upcoming year.

Economic upheaval, rising taxes and much more have all come together at the worst possible time for the Baby Boomers, along with plenty of other generations, and the situation is definitely expected to continue well on into 2012. In the North, the rates of debt have been higher for personal insolvency while in the South East and London, things are mildly better.

Over all, economists and personal financial advisers alike insist that it is going to be smart and difficult financial decisions that clear the way for a brighter financial future.

Banks in UK Bracing for PPI Claims Totalling Up to £5 Billion

Things are looking bad for UK banks as they are staring down the barrel of £5.1 billion over the course of the next 5 years for the purposeful misselling of PPI (Payment Protection Insurance) to consumers who now are legally entitled to be compensated for the misselling. In turn, consumer help services like 1ppi.co.uk have taken up the cause to help consumers and are finding tremendous success processing these claims. Banks are not happy, but the Government has made it clear that they must pay for their mishandling of the trust consumers have placed in them. Without that trust, say economic experts, Britain’s economy will have trouble fully recovering as consumers grow wary of dealing with the banking system. The compensations serve as a way for these banks to re-establish that trust with their customer base.

Credit card holders are the primary victims of this missold PPI and many were crunched financially during already rough economic times. Major British banks like HSBC, Barclays and Lloyds Banking Group are looking at paying out millions of pounds in compensation as the scandal over PPI gains more and more public exposure. Morgan Stanley, a US investment bank, released research which shows that Lloyds alone, the bank believed to be most heavily involved in the PPI misselling, is going to face up to £1.5 billion in PPI claims. Credit Suisse recently said via its analysts that it could be paying a solid £1 billion due to PPI misselling.

The Financial Services Authority of the UK had said in August 2010 that the industry would be facing up to £3 billion in claims over PPI, but Morgan Stanley has said that it based its estimated on a success rate of 46% for compensation claims because people now know of services like 1ppi.co.uk having such strong success at getting consumers their rightful compensation. Previously, some estimated that only £740 would be the cost to the banking industry, but with word reaching more and more consumers, they are taking action to get their missold PPI compensation at a far greater rate than some thought might happen.

On average, claimants are getting £2,000 according to some estimates with £2,500 being the average reached by other analysts. Banks caught in this PPI scandal face very heavy charges, as well, in terms of additional costs for them in terms of fines and also other fees. Economic analysts say that with each PPI claim filed, consumers send a strong message to UK banks that they will not tolerate such deception in the British marketplace.

Those in the UK who need to file a PPI claim are definitely advised to pursue this action since they stand to gain quite a bit if they have been missold PPI on a credit card or in other cases. The success rate of 1ppi.co.uk is seen as a good indication that these services get those claims processed and get consumers the money they deserve.

Higher Clothing Prices Plus Shopping Addictions Bad News for UK Debtors

Things continue to look rough in the United Kingdom today as a growing number of threats to consumer keep seeming to pull money directly from their wallets, say economic advisors. Word has come from the CEO of Net, Lord Wolfson of Aspley Guise, who is warning that prices for clothing are about to rise in 2011 because prices on cotton have gotten difficult for those who manufacture clothing to deal with without raising their prices. Wages are on the rise in many places around the world and this means higher prices for end level retail consumers, not only in the UK, but in other more economically advanced nations. Low rates of growth in sales are set to plague the economy in the coming years and this is another reason that retail leader Wolfson says this is the ‘new normal’ for the present economy.

What consumer advocates point out is that when combined with the rising problem of the so called shopping addictions, whereby UK consumers have huge credit or store card debts for their fashion fixes, the problem could spiral out of control. Many have not yet considered a debt management plan as a means to rid themselves of the debt and continue to spend faster than their income can keep up. This has led to many buying their way straight into the hole and advocates worry higher prices for basic clothing will only compound the negative effects of this trend.

With consumer credit access getting tighter by the year, many believe that this trend will hold and credit will continue to get more scarce in the consumer markets of the UK. Consumer growth in general will be much more controlled under the Government’s new measures intended to reduce debt and this means higher VAT along with a very subdued economic outlook wherein slow and steady growth is far more desirable to those in the Government than the previous boom and bust cycles for which most of the Western world has been known for decades.

Wolfson went on to say that he personally does not believe a double dip recession is on the way, but that consumer spending will be weak due to the cost of basic goods. He did say that he expects his own company, Next, to grow despite the overall tone of the economy in the next 3 to 5 years. Through a strategy of buying back their own shares, Next intends to raise investor profits and make each share earn more.

This thinking, Wolfson said, is not intended to be a pessimistic look at the economy but a realistic take from him on a new reality UK consumers face today where goods will cost more and credit will be less available. Personal finances advisors add in that credit could be scarce to none for those who have not handled debt over the course of the next year or so as debt continues to be seen as a major problem by many entities beyond the banking system.

Families on Brink of Insolvency Due to Credit Card Habits

In the United Kingdom, as with much of the rest of the developed world, there has been a decided and nearly continual slide into debt via credit cards and other similar products such as overdrafts. Over the past 2 decades recent research has shown a marked trend towards families using their credit cards to make purchases that they were able to partially pay off, but the balance alone has stayed nearly perpetual for them. Contrary to what some suggest, it is not generally a process of running the credit cards sky high and then crashing against a wall of debt, say analysts. Recent studies are beginning to give experts a clearer picture of a Britain struggling quietly with debt that continues to mount, but is generally able to be partially paid off in order to keep the credit cards from from being canceled.

This upgraded picture of British family finances comes as word from the Bank of England only days ago stated that lenders are writing off record amounts of debt from credit cards while thousands of households plunge into insolvency. The need for help is great according to the Financial Stability Report and lenders know this, but breaking the pattern of borrowing to spend is difficult for both sides to break. The ways lenders appear to be striving to discourage debt is by raising interest rates. This, in turn, makes those families holding high but manageable balances really suffer as things start to spiral out of control for them. This is the point when many are advised to enter into a Debt Management Programme in order to avoid outright insolvency. However, pride means that many families may feel as if they cannot do this.

Savings, however, are beginning to grow for the first time in 20 years, the Bank says. With £24 billion going into savings this year, that is £4 billion more than has been given out by lenders in the form of new loans. Since records of this have only been kept since 1988, it is remarkable to see that since that time savings have never yet outweighed loans. Could this be a brighter path for British families? Financial experts state they believe it too soon to cast an across the board judgment, but the news is certainly brighter than had been expected. This is due to the fact that nearly 150,000 in the UK will be made insolvent in 2010 alone which is still a 10 per cent rise from the previous year.

For many in the British credit help industry, the general sentiment is that a crisis of family insolvencies is certainly afoot and it could be yet another decade before families understand the importance of seeking solutions right away. The problem is not people thinking that massive loads of debt are a good idea, rather it is, say analysts, a problem of trying to maintain a life style that is not in congruency with today’s current economic climate.

An interesting example of the current spending patterns that are no longer feasible in the UK would be the fact that many will buy into a service plan such as comes with the Apple iPhone and this alone will push their debt higher because it is an added expense at a monthly level plus the £300 to £600 for the smart phone itself. While in the past this would have been seen as permissible and even advisable, at the rate technology is developing it is not an investment that would be possible to see a pay off for because by the time the phone is paid back at the average rate a British household can afford, a new phone is available. In fact, Apple recently announced it will no longer support the first iPhone with upgrades – a device released only 3 years ago. In this way, the consumer market can work against consumers. This is why financial help is so desperately needed for changing times, say experts.

Consumption levels will need to be lowered for UK families as belts are tightened during this time of economic recovery and social readjustment to the digital age. With the right solutions such as a Debt Management Plan, families can dodge insolvency say consumer advocates. However, it is often taking that first step that can be the hold up as families fear a lower quality of life since they do not realize the relief from stress alone will will dramatically reduce their personal woes.

Shocking 60 Plus Percent of Britons Using 0% Balance Transfer Cards for Purchases

A study has unveiled that 63 percent of consumers in the UK are using credit cards with 0% balance transfers for new spending despite the fact that this will nearly always lead to a higher cost in the end due to building a negative payment history with credit reporting agencies. According to this study, UK customers also take these credit card offers and make all new purchases that build their debts up even higher. Almost a third of those using a balance card said they did not intend to do this when they first applied for the card, but the sad fact is that doing so will lead them into even further debt.

The purpose of the balance transfers is, reportedly, to help consumers control their own debt and pay it off more quickly, but the zero interest deals are apparently too much of a lure towards new merchandise and end up paying extremely high, even double, interest after the introductory offer period is over. After this point, the interest tends to go back up and can be a tremendous shock to consumers that had hoped to simply spend and forget. The mounting debts then begin to snowball and many end up wishing they had first opted for a smart move such as a debt management plan rather than taking on more spending despite the sweetness of the zero interest offers. Once their payment histories slide further down, they often have to pay higher interest rates in other areas of their lives, too, including auto loans, home mortgages and other similar areas of their finances.

Since these situations have tricky small print conditions, one needs to be exceptionally careful in zero interest offer territory, say debt experts. The UK has already been dealing with incredible levels of debt and the situation can worsen for families that use such offers as a means of putting more time between them and their debt rather than pushing that debt down to lower levels.

Trend Towards Defaulting on Credit Cards to Hit High Street Banks

After being on shaky ground from the effects of so many bad home loans in the UK, high street banks are hearing from KPMG accounting firm that unsecured loans such as credit card loans may bring further losses right behind the huge hit they took from large numbers of home loans that were defaulted on in the past few years.

Even though investment banks are back on the path to profits, their retail arms are still not showing the profitability expected of them largely due to unemployment rates which affect whether or not people are able to repay their debts. This, in turn, will most likely mean higher interest rates and increased fees for those consumers who are seeking credit at this time and in the near future as banks attempt to restructure their services back to a more profitable situation.

Barclays, Lloyds Banking Group, Royal Bank of Scotland (RBS) and HSBC have all reported profits for the first six months of 2009 in their retail divisions, but the levels of bad debt are pinching those profit margins. Lloyds has announced that it believes the worst of the defaulting has already occurred in the first half of this year, with £2.2bn in bad debt, a 60% increase. After this, they expect the defaulting situation to calm back down to more normal levels.

From March to June 2009, over 11,000 homes in the UK were repossessed according to an announcement from the Council of Mortgage Lenders, a 14% increase from 2008.

All told, many citizens are expected to turn to Individual Voluntary Agreements, as opposed to bankruptcy in order to get themselves out of the debt worries brought on my these tight economic times.