Archive for the Debt Management Category

Rules for Debt Relief may be Made Easier

It appears that new rules and regulations may be put into place to allow UK residents that have pensions to use debt relief orders in order to fight back and rid themselves of their insolvency. Business departments around the UK are coming up with certain changes that can be made to DROs that would make them more easily accessible for people so that they do not always have to turn to bankruptcy or individual voluntary agreements.

Debt relief order rules can allow people to rid themselves off a lot of debt within as little as a year, but people cannot use them if they have any assets that are more than 300 pounds in value. This means that at the moment it is hard for anyone with a pension fund to access a DRO, but that may all change soon.

Although these DROs were only introduced in April, there is already a plan for a new common sense change that would allow easier rules and let people with pension funds still take advantage of their benefits. Essentially these debt relief rules target people that have less than 50 pounds of excess income each month and have debt that is lower than 15,000 pounds. 12,000 people have used these DROs since they have been put into place and the government is trying to find a way for more people to use them.

The only discussion right now is how to determine how big of a pension pot should be before people are not allowed into the process, and where to draw the lines. There has been a lot of concern that people were getting denied for these rules even though they met all the criteria, and reports showed that 96% of people were excluded from the DRO process based on their pension. And in 78% of those cases the citizens pension funds were less than 5,000 pounds.

Debt Charities calling for Help and Better Practice

Many people across the UK and especially some debt charities are calling on big members of the credit industry to start offering more help, and more solutions when it comes to the credit crisis. There are many that are urging for everyone to start working together in order to fight debt and possibly create a best practice policy.

A new report was recently put together by a group including the Money Advice Trust, Institute of Money Advisors, and the Citizens Advice called on all kinds of creditors to start of discussions that could lead to policies that will help the nation improve debt collection. As of now there are more and more individuals dealing with bankruptcy and more and more bills that are going unpaid, so the creditors need to step in and do something to improve the situation.

The report itself was mainly focused on five different steps that the credit industry could take and focus on ideas such as providing more information and support to citizens as well as creating a culture that is more organized and focused on being debt-free. The idea is that giving people the support and information that they need to fight debt will have a huge impact on the debt of the nation in the following years.

This report has followed one that was recently done by the Citizens Advice group that noted that there are a record amount of people seeking help when it comes to debt, yet not enough support or debt management programs that will help to go around. If the nation wants people to climb out of debt then it may just be up to the big businesses and the credit industry to give them a hand in getting back on their feet.

Consumers Becoming More in Touch with Finances Due to Bank Crisis

Recent surveys have shown that UK consumers are far more connected and educated when it comes to their personal finances, and the major reason has been the bank crisis that the nation is dealing with right now. However, even though consumers are more aware surveys also showed that fewer citizens are paying down their debt or employing a debt management plan.

A separate survey commissioned by YouGov also noted that many UK consumers are willing to switch banks or move on for better plans, which means that banks are going to have to up the ante very soon. Consumers noted that they are quite scared off locking in their money for a lengthy period of time or putting all their eggs in one basket in terms of banking institutions. While that isn’t much of a debt management plan, it will definitely affect the way banks conduct business in the future.

While consumers are worried about the safety of their bank more than they were in the future, they are quite pleased that they know more about their financial situation than they used to. All of these reactions come on the heels of the collapse and bankruptcy of banking institutions in Iceland, Bradford, Bingley, and Northern Rock, and all the government rescues that have saved other institutions from bankruptcy.

Despite all of the awareness, pollsters noted that UK consumers were still not doing much in terms of protecting their finances. Less than half of the people in the survey said they were paying down more debt than they used to and less than 40% were putting more money aside in terms of their debt management plans.

In all, it does appear that consumers are taking more and more steps to understand their finances, but have yet to make any substantial moves to avoid debt and bankruptcy. It is a clear indication of a big difference in action and inaction but many feel that it will change drastically over the next year or so.

Another note from the survey is the fact that it appears many more UK consumers are comparing banks and contemplating switching their money over. That is good news for policymakers in the government as it means that there will be far more competition in the high end banking world. The government has been forcing certain institutions to divest part of their companies and consistently gives bonuses and rewards to new entrants into the industry.

Over half of the participants in the survey said that they would now consider using a provider that is non-traditional, which is a huge jump from recent years. 54% of consumers also said that they were now far less willing to invest or lock their money away for a long time.

In the end, the survey made light of a number of issues and gave new insight into how UK consumers are dealing with economic struggles, bankruptcy, and potential debt. Whether these trends continue or teeter off remains to be seen, but increased knowledge is always a good thing for consumers.

Debt Management Plans

The debt management plan can do for you as an individual or as a business, it will be good to decide its scope. It is a misconception among many people that debt management plans can only be used for eliminating the existing mound of debts. Nevertheless, debt management plans have an extended scope. As the name suggests, debt management plans may be used with advantage to manage the debts to a particular level. It must be acknowledged that a proper management of debts makes debt consolidation and other methods employed to fight the menace of debts superfluous. Prevention is better than cure. Most of us repeat the adage incessantly. It will be through debt management plans that one can really develop the habits in ones life.

Most budgets are done on a monthly basis. You should record your monthly income and expenses on a sheet that will allow you to subtract your expenses from your income.

The debt can be either fixed or variable, but is different because you do not pay the full amount each month. You can chose how much you want to pay or have a minimal amount you have to pay.

Record for Personal Insolvency Broken in England and Wales

According to the government’s Insolvency Service, over 33,000 personal insolvencies occured during the second quarter of 2009, breaking all previous records for England and Wales. The increase demonstrates a 9% rise over the first quarter of 2009 and is 27% higher than the same period in 2008. Many of these individuals are finding some relief in either IVAs (link) or, in more extreme situations, they are seeking a Bankruptcy (link).
Although the number of companies experiencing insolvency has decreased by 14% compared to the first quarter of 2009, it remains 23% higher than the same period in 2008.
Since the end of 2007, personal insolvencies have been soaring due to the recession and its financial implications on the budgets of average people. During the final quarter of 2007, well over 23,000 people went bust but today the number of people experiencing the same situation has increased by almost 40%. Bankruptcies (link!) accounted for over 18,800 of the overall 33,000 plus personal insolvencies which is lower than in the past, but Individual Voluntary Arrangements (link!) rose to take up 12,225 of that overall number of insolvencies.
For the second consecutive quarter, the number of companies going through administration, voluntary arragements or receiverships decreased, but experts warn that this trend may not continue into the future.

According to the government’s Insolvency Service, over 33,000 personal insolvencies occured during the second quarter of 2009, breaking all previous records for England and Wales. The increase demonstrates a 9% rise over the first quarter of 2009 and is 27% higher than the same period in 2008. Many of these individuals are finding some relief in either IVAs or, in more extreme situations, they are seeking a Bankruptcy.

Although the number of companies experiencing insolvency has decreased by 14% compared to the first quarter of 2009, it remains 23% higher than the same period in 2008.

Since the end of 2007, personal insolvencies have been soaring due to the recession and its financial implications on the budgets of average people. During the final quarter of 2007, well over 23,000 people went bust but today the number of people experiencing the same situation has increased by almost 40%. Bankruptcies accounted for over 18,800 of the overall 33,000 plus personal insolvencies which is lower than in the past, but Individual Voluntary Arrangements rose to take up 12,225 of that overall number of insolvencies.

For the second consecutive quarter, the number of companies going through administration, voluntary arragements or receiverships decreased, but experts warn that this trend may not continue into the future.

Credit Card Cheques Expected to Face Serious Opposition from UK Government

A new post is being created to help consumers recoup losses from unwanted credit card cheques which have become such a huge problem in the UK in recent years. The cheques are from rogue traders and are expected to be banned in the near future, as well, due to the amount of debt they add to the already staggering debt problem in the UK that has seen so many turning to Individual Voluntary Arrangements (link!) and Bankruptcy (link!).
According to the latest figures coming out of the Bank of England, UK citizens owe loans, credit card debt and overdrafts that total to £233bn.
However, the reaction to the current plans to create a Consumer Advocate are mixed, though the White Paper on its creation outlines the Advocate as a means to raise awareness about the severity of current consumer struggles. It would also act on behalf of groups of the public who are seeking refunds or compensation when the case is judged to be of “national importance”, such as against a substantial and unfair debt from a rogue company.
The government is looking for action to be taking in regard to debt levels during this current recession. They want lenders to be held more accountable for irresponsible practices within their industry because UK credit card debt is again standing at £54.4bn after having been reduced for a short time, months ago.
Credit card cheques have proven to be quite controversial because of the handling fees incurred for using them. These blank cheques are often sent to credit card holders along with their monthly statements as a means of enabling the customer with a different way to spend the funds from their card’s account. If things go awry, these cheques do not offer the same protections as the cards themselves and they almost always do not have an interest free period that the card does, leading to confusion for consumers and thus, increased spending.
Since the government has been expected to ban these cheques for some time now, they will be banning them in order to halt companies from sending unsolicited cheques. This means credit card companies may only offer these to those who have opted in to receive them ahead of time rather than eliminating the option to consumers altogether.
This news follows the announcement from Uswitch, a price comparison website, that states 20% of UK consumers have seen their credit limits rise without asking for such an increase.
Consumer groups have been requesting that there be more help for consumers who believe they have been unfairly treated by companies and as a result, experienced significant financial loss.
The person who will be the Consumer Avocate in the coming year will be an individual comfortable with being involved in representing substantial groups of consumers who seek compensation through the courts and also highly public consumer campaigns. These consumers who feel they have been ripped off will be able to perform group actions against the company named by opting in to the group legal action.

A new post is being created to help consumers recoup losses from unwanted credit card cheques which have become such a huge problem in the UK in recent years. The cheques are from rogue traders and are expected to be banned in the near future, as well, due to the amount of debt they add to the already staggering debt problem in the UK that has seen so many turning to Individual Voluntary Arrangements and Bankruptcy.

According to the latest figures coming out of the Bank of England, UK citizens owe loans, credit card debt and overdrafts that total to £233bn.

However, the reaction to the current plans to create a Consumer Advocate are mixed, though the White Paper on its creation outlines the Advocate as a means to raise awareness about the severity of current consumer struggles. It would also act on behalf of groups of the public who are seeking refunds or compensation when the case is judged to be of “national importance”, such as against a substantial and unfair debt from a rogue company.

The government is looking for action to be taking in regard to debt levels during this current recession. They want lenders to be held more accountable for irresponsible practices within their industry because UK credit card debt is again standing at £54.4bn after having been reduced for a short time, months ago.

Credit card cheques have proven to be quite controversial because of the handling fees incurred for using them. These blank cheques are often sent to credit card holders along with their monthly statements as a means of enabling the customer with a different way to spend the funds from their card’s account. If things go awry, these cheques do not offer the same protections as the cards themselves and they almost always do not have an interest free period that the card does, leading to confusion for consumers and thus, increased spending.

Since the government has been expected to ban these cheques for some time now, they will be banning them in order to halt companies from sending unsolicited cheques. This means credit card companies may only offer these to those who have opted in to receive them ahead of time rather than eliminating the option to consumers altogether.

This news follows the announcement from Uswitch, a price comparison website, that states 20% of UK consumers have seen their credit limits rise without asking for such an increase.

Consumer groups have been requesting that there be more help for consumers who believe they have been unfairly treated by companies and as a result, experienced significant financial loss.

The person who will be the Consumer Avocate in the coming year will be an individual comfortable with being involved in representing substantial groups of consumers who seek compensation through the courts and also highly public consumer campaigns. These consumers who feel they have been ripped off will be able to perform group actions against the company named by opting in to the group legal action.

Debt for Police Officers

Research as shown us that theses may be some valuable suggestions for managing officers who are experiencing financial difficulties so we created this article to share these suggestions for Forces within the UK who are managing officers who have fallen into such financial troubles. This is in no way meant to be interpreted as a prescriptive document or official financial advice.
While each case should definitely be dealt with based on the unique criteria of that situation, some basic suggestions could provide some uniformity and additional clarity to those who deal with these issues.
According to research, more officers than in prior years are now going through financial difficulties for a wide variety of reasons. Relative pay levels for officers fluctuate at a near constant rate and at the same time, financial institutions are eager to enter into credit agreements with officers. This can even be the case in situations where they would not have done the same for a member of the public who was in a different line of work and in the same circumstances.
How to Determine When an Officer is in Financial Difficulty
Circumstances for each officer will be very different depending upon factors such as: the earning ability of their domestic partner if they have one, children involved in their relationships and how well they are able to manage their own debts. Considering these facts, then we will define ‘financial difficulty’ as:
A situation in which an officer has little or no chance in the near future of being able to meet their current debt.
It is important that Forces are aware that officers who have fallen into financial difficulty are usually in one of three primary situations:
Those officers going through marital troubles
Those officers who have experienced a change in their family’s or their own financial situations
Those recruits who now have unmanageable debts
In many instances a Debt Management Plan or an IVA (Individual Voluntary Arrangement) may be a solution you could advise such officers to look into. It’s always best to intervene early if you can and help them solve their situation before it ever becomes dire.

Research as shown us that theses may be some valuable suggestions for managing officers who are experiencing financial difficulties so we created this article to share these suggestions for Forces within the UK who are managing officers who have fallen into such financial troubles. This is in no way meant to be interpreted as a prescriptive document or official financial advice.

While each case should definitely be dealt with based on the unique criteria of that situation, some basic suggestions could provide some uniformity and additional clarity to those who deal with these issues.

According to research, more officers than in prior years are now going through financial difficulties for a wide variety of reasons. Relative pay levels for officers fluctuate at a near constant rate and at the same time, financial institutions are eager to enter into credit agreements with officers. This can even be the case in situations where they would not have done the same for a member of the public who was in a different line of work and in the same circumstances.

How to Determine When an Officer is in Financial Difficulty

Circumstances for each officer will be very different depending upon factors such as: the earning ability of their domestic partner if they have one, children involved in their relationships and how well they are able to manage their own debts. Considering these facts, then we will define ‘financial difficulty’ as:

A situation in which an officer has little or no chance in the near future of being able to meet their current debt.

It is important that Forces are aware that officers who have fallen into financial difficulty are usually in one of three primary situations:

Those officers going through marital troubles

Those officers who have experienced a change in their family’s or their own financial situations

Those recruits who now have unmanageable debts

In many instances a Debt Management Plan or an IVA (Individual Voluntary Arrangement) may be a solution you could advise such officers to look into. It’s always best to intervene early if you can and help them solve their situation before it ever becomes dire.

Dealing with Debt

These days, credit in very easy to obtain for those living in the UK. Those looking to led money include small scale money lenders, mail order firms, credit unions, finance companies, insurance companies, credit card companies, building societies and banks. Most of us will eventually require credit in some form or another, whether it is a mortgage to buy a house or a loan to purchase expensive electronics, furniture or a new car. The definition of credit is buying a product or service under conditions that offer you time to pay it off. That credit itself is paid for in the form of interest. Those who borrow money would be wise to check the APR (Annual Percentage Rate) to make sure they are getting the cheapest credit possible.
It’s easier than you might think to end up borrowing more money than you have the ability to repay and when you do that, the resulting money owed is called debt. To word it another way, credit is debt that you have under control while debt is credit that has gotten out of control. Many people end up borrowing even more money against their debts in the hope of clearing what they owe, instead creating an even larger debt for themselves.
When people experience debt problems it is usually due to multiple debts they owe becoming overdue, such as:
Overdue on Holidays (Particularly ‘Fly now, pay later’)
Overdue on furniture payments
Overdue on TV/Video/Stereo equipment
Overdue on car payments
Overdue on electricity, gas or telephone utilities with the result of being cut off
Overdue on council tax with the result of bailiffs or worse consequences
Overdue on mortgage with the frightening result of repossession and subsequent homelessness
Debts have a nasty tendency to ruin lives when they get out of hand so it is crucial that you seriously consider borrowing money each and every time you do so. You and your family’s lives are what will be affected should the situation spiral out of your control. More often than is commonly believed, debt is a cause of the breakdown of a marriage. Your golden rule could be: Never borrow more money than you are absolutely certain you can pay back.
If you do, despite your best intentions, find yourself struggling with debt, take a moment to consider your options for getting your financial life back on track.
A Debt Management Plan or Individual Voluntary Arrangement (IVA) may be exactly what you need to get yourself back into financial health once again.

These days, credit in very easy to obtain for those living in the UK. Those looking to led money include small scale money lenders, mail order firms, credit unions, finance companies, insurance companies, credit card companies, building societies and banks. Most of us will eventually require credit in some form or another, whether it is a mortgage to buy a house or a loan to purchase expensive electronics, furniture or a new car. The definition of credit is buying a product or service under conditions that offer you time to pay it off. That credit itself is paid for in the form of interest. Those who borrow money would be wise to check the APR (Annual Percentage Rate) to make sure they are getting the cheapest credit possible.

It’s easier than you might think to end up borrowing more money than you have the ability to repay and when you do that, the resulting money owed is called debt. To word it another way, credit is debt that you have under control while debt is credit that has gotten out of control. Many people end up borrowing even more money against their debts in the hope of clearing what they owe, instead creating an even larger debt for themselves.

When people experience debt problems it is usually due to multiple debts they owe becoming overdue, such as:

Overdue on Holidays (Particularly ‘Fly now, pay later’)

Overdue on furniture payments

Overdue on TV/Video/Stereo equipment

Overdue on car payments

Overdue on electricity, gas or telephone utilities with the result of being cut off

Overdue on council tax with the result of bailiffs or worse consequences

Overdue on mortgage with the frightening result of repossession and subsequent homelessness

Debts have a nasty tendency to ruin lives when they get out of hand so it is crucial that you seriously consider borrowing money each and every time you do so. You and your family’s lives are what will be affected should the situation spiral out of your control. More often than is commonly believed, debt is a cause of the breakdown of a marriage. Your golden rule could be: Never borrow more money than you are absolutely certain you can pay back.

If you do, despite your best intentions, find yourself struggling with debt, take a moment to consider your options for getting your financial life back on track.

A Debt Management Plan or Individual Voluntary Arrangement (IVA) may be exactly what you need to get yourself back into financial health once again.

Bank Loans and Overdrafts

Bank Loans and Loan Finance
Loan Finance and Bank Loans are generally appropriate for those borrowing for an especially expensive item like a car that costs a great deal of money and will be repaid over a long term period of time such as 10 years. Interest rates are generally lower than they would be on a credit card, but higher than they would be on a mortgage.
Overdrafts
If borrowing for a short term and only in smaller amounts of money then a bank overdraft may be more appropriate. Interest rates on an overdraft are usually higher than they would be with a loan, particularly in instances where the overdraft hasn’t been agreed to by the bank in advance.
If you end up having a permanent overdraft, you may be able to lower your interest payments by taking out a loan of some type in order to repay that overdraft. Sometimes you can take advange of a 0% credit card offer and save yourself money that you would otherwise have paid to a standard loan, in terms of interest. However, bear in mind that once that interest free period ends, the interest owed can rise very quickly and build up debt beyond what you had intended. Also, keep in mind that if you take out a loan and want to repay it earlier than the agreed time table you may owe penalties. An overdraft can be repaid on any time scale without any penalties.

Bank Loans and Loan Finance

Loan Finance and Bank Loans are generally appropriate for those borrowing for an especially expensive item like a car that costs a great deal of money and will be repaid over a long term period of time such as 10 years. Interest rates are generally lower than they would be on a credit card, but higher than they would be on a mortgage.

Overdrafts

If borrowing for a short term and only in smaller amounts of money then a bank overdraft may be more appropriate. Interest rates on an overdraft are usually higher than they would be with a loan, particularly in instances where the overdraft hasn’t been agreed to by the bank in advance.

If you end up having a permanent overdraft, you may be able to lower your interest payments by taking out a loan of some type in order to repay that overdraft. Sometimes you can take advange of a 0% credit card offer and save yourself money that you would otherwise have paid to a standard loan, in terms of interest. However, bear in mind that once that interest free period ends, the interest owed can rise very quickly and build up debt beyond what you had intended. Also, keep in mind that if you take out a loan and want to repay it earlier than the agreed time table you may owe penalties. An overdraft can be repaid on any time scale without any penalties.

When Your Credit is Refused

You Shouldn’t Panic if You Are Refused Credit
If you find yourself in a situation where you are refused credit, keep in mind that it could be for any number of reasons. Somtimes it is simply because the lender believes that based on the information obtained about you from a credit reference agency, it looks as though you may struggle to repay debts. It could also be due to information that you provided on an application form to the lender that triggered them to conclude the same thing. Also, it may simply be that the lender does not find you to fit the profile of the type person they want to give credit to. This could be due to the type of job you have, your age or a myriad of other specifications that lender has chosen to focus on when selecting candidates for credit.
Keep in mind that no individual has a right credit in the UK. There are rules about refusing people due solely to their race, gender, sexual orientation, address or religion, but a lender can still refuse your application without giving you a reason. However, most lenders will tend to give you an idea of why they rejected your application.
Don’t Feel Bad for Wanting to Know Why
It’s perfectly natural to want to know what you were refused credit as well as wanting to learn what you can do to improve your attractiveness to lenders. That means you’ll want to ask the lender first, but be aware that lenders try to be careful about what they tell people. It’s not uncommon for lenders to score applications by weighing each piece of information with sub score and then adding those together to get an overall score. They normally tell you if this is how your application failed.
If your application was refused due to credit reference information then the lender will give you the name and address of the agency from whom they obtained that information. You can then write that agency to get a copy of your file sent to you along with a guide to what the information means and how you can get it changed or add to it if you need to.
Although credit reference agencies will not be able to tell you why you were refused for credit because they do not know themselves, they generally have quite adept customer service departments that may be able to help you with questions about your credit information.

You Shouldn’t Panic if You Are Refused Credit

If you find yourself in a situation where you are refused credit, keep in mind that it could be for any number of reasons. Somtimes it is simply because the lender believes that based on the information obtained about you from a credit reference agency, it looks as though you may struggle to repay debts. It could also be due to information that you provided on an application form to the lender that triggered them to conclude the same thing. Also, it may simply be that the lender does not find you to fit the profile of the type person they want to give credit to. This could be due to the type of job you have, your age or a myriad of other specifications that lender has chosen to focus on when selecting candidates for credit.

Keep in mind that no individual has a right credit in the UK. There are rules about refusing people due solely to their race, gender, sexual orientation, address or religion, but a lender can still refuse your application without giving you a reason. However, most lenders will tend to give you an idea of why they rejected your application.

Don’t Feel Bad for Wanting to Know Why

It’s perfectly natural to want to know what you were refused credit as well as wanting to learn what you can do to improve your attractiveness to lenders. That means you’ll want to ask the lender first, but be aware that lenders try to be careful about what they tell people. It’s not uncommon for lenders to score applications by weighing each piece of information with sub score and then adding those together to get an overall score. They normally tell you if this is how your application failed.

If your application was refused due to credit reference information then the lender will give you the name and address of the agency from whom they obtained that information. You can then write that agency to get a copy of your file sent to you along with a guide to what the information means and how you can get it changed or add to it if you need to.

Although credit reference agencies will not be able to tell you why you were refused for credit because they do not know themselves, they generally have quite adept customer service departments that may be able to help you with questions about your credit information.