Archive for the Debt Management Category

Your Job and How Debt Affects It

Employment and How Debt Problems Affect Your Job
With this article we want to address the ways in which serious debt troubles can affect your ability to work and keep your job or even your career. Our hope is that you may learn information here that can help you if you or a loved one faces serious debt that has begun to affect your or their ability to work. It is never a positive experience to have your job at risk due to a terrible debt struggle.
Debt solutions are available for those who do not wish to have their work life interrupted or even ruined do to debt. The effects can be much more long lasting than you might imagine. For example, a bankruptcy can have effects that last a decade.
Here are a few solutions that may suit your needs:
An IVA, the Individual Voluntary Arrangement
- An IVA is an agreement for those who owe £15,000 or more. With an IVA, the advantage is that it will not affect your job or ability to keep working for almost all employers.
A DMP, the Debt Management Plan
- If your job is on the line due to debt then a Debt Management Plan may be for you. This popular solution has the advantage that it takes your unique individual circumstances into account.
A Bankruptcy
- Since your job may be impacted if you undergo a bankruptcy, particularly if you work in the legal sector, banking or finance, you will want to get sound advice before you consider this step.
Once you have already lost your job due to debt, it is too late to do anything constructive about it. However, if you’re struggling with debt and you need answers, then you will want to act quickly because as we all know, debt piles up quicker than we hope it will.

Employment and How Debt Problems Affect Your Job

With this article we want to address the ways in which serious debt troubles can affect your ability to work and keep your job or even your career. Our hope is that you may learn information here that can help you if you or a loved one faces serious debt that has begun to affect your or their ability to work. It is never a positive experience to have your job at risk due to a terrible debt struggle.

Debt solutions are available for those who do not wish to have their work life interrupted or even ruined do to debt. The effects can be much more long lasting than you might imagine. For example, a bankruptcy can have effects that last a decade.

Here are a few solutions that may suit your needs:

An IVA, the Individual Voluntary Arrangement

- An IVA is an agreement for those who owe £15,000 or more. With an IVA, the advantage is that it will not affect your job or ability to keep working for almost all employers.

A DMP, the Debt Management Plan

- If your job is on the line due to debt then a Debt Management Plan may be for you. This popular solution has the advantage that it takes your unique individual circumstances into account.

A Bankruptcy

- Since your job may be impacted if you undergo a bankruptcy, particularly if you work in the legal sector, banking or finance, you will want to get sound advice before you consider this step.

Once you have already lost your job due to debt, it is too late to do anything constructive about it. However, if you’re struggling with debt and you need answers, then you will want to act quickly because as we all know, debt piles up quicker than we hope it will.

Tax Debt in the UK

When You Can’t Pay Your Tax
In this article we want to explore the primary aspects of an inability to pay one’s tax.
Some terms to better help you understand this article are as follows:
Collector – The person who purses those who have not paid tax. Today these individuals are part of the RMS (Receivables Management Service). However, before a collector will pursue you, an initial application for payment is sent from one of the two Accounts Offices in either Cumbernauld or Shipley. If, instead local enforcement action must be taken for payment not having been made, the Recovery Office will deal with this matter. Usually, the Recovery Office is named after the city or town where it is located and this office has jurisdiction for the area in which you live or trade. In cases where a bankruptcy is involved, the EIS (Enforcement and Insolvency Service) in Worthing will get involved. Those employed by the RMS may contact you if your returns are outstanding, but they do not process your return themselves.
The issuing and processing of returns is handled by RMS offices which in this article will be called “tax offices” because that is what they are traditionally called in an unofficial sense. It’s important to realize that different people within the RMS have different roles so the “collector” who contacts you is usually a different person from the RMS who does not deal with your specific tax return – that would be the “tax office”.
Warning Signs of Impending Problems
Each year, thousands of individuals get into arrears with their tax. Normally, the individual is made aware of this situation when they see a debt on their Statement of Account. After a short time, a collector will generally get in touch via letter or telephone and ask for an immediate payment. It is important to remain calm and fight any sense of panic you feel.
The RMS can frighten people by threatening them with legal action, but it is still crucial that you don’t panic if this happens because the situation may not be as dire as it seems. Remain calm as you work through the situation and consider your options, as well as how you got into the situation.
The first thing to remember is that you should never ignore a statement of account or a demand from a collector because that is the worst action to take. If there is any chance that you can resolve your situation then you will want to act quickly because if you do nothing then you are inadvertently raising the risk that you will face legal action.
Remember, the amount being demanded could be incorrect. You may find that you disagree with what either the collector or the Statement of Account state is the amount of tax owed. In some instances your statment may include what is called a determination, which is an estimate and made because the tax return (or tax returns) have not been completed. If this is the case it can be corrected.
Unfortunately, the collector who is paid to pursue you for upaid tax may or may not be trained in how to understand the tax so you could well be wasting effort if you try to persuade them that the figure is incorrect. Generally you will need to contact your tax office to make the needed adjustments because they are the ones who deal with your tax return.
You will end up liable for penalties, surcharges, interest and tax charged on determination if you have not completed your tax return (or tax returns) which is not only correct, but enforceable until you have submitted a completed return. Once you have submitted the return the amount of tax will be revised so that they reflect the amounts shown on your return. Then you will only need to pay the revised debt plus interest and any outstanding penalties or surcharges that are still due in respect of the revised debt.
In cases of ‘non-return’, outstanding debts are pursued until the required return is submitted, so even if you pay all that is demanded, they will continue to take action in order to get that return submitted. Generally this means daily penalties. Therefore, it is not in your interest to always submit your returns in a timely manner.
There are some instances where, if you do owe tax, you are allowed to pay it over time. Although tax should always be paid when it falls due, the RMS allows some people to pay their tax over a period of weeks, months or longer, in certain circumstances. This does mean, however, that interest will be added to the total amount due, but it’s possible this interest will be small. Generally  in these instances the RMS will keep reminding you that interest is being added to the total because they have no discretion and are unable to freze interest in order to help you clear the debt quicker.
Interest rates on unpaid tax is actually lower than is commonly believed, right now it is set at 6.5% per annum. As an example, being one month late on a tax bill of £2,000 means you are charged £11.
Many people are afraid that failure to pay tax in a timely manner leads to criminal prosecution and imprisonment, but this rarely happens. The RMS does prosecute a few people each year, but these are mostly cases where the person is alleged to have been seriously dishonest or trying to evade the tax. The RMS won’t take this course of action simply because an individual has not paid tax on time or if they are having trouble finding money to settle. Yet, at the same time it is important to be aware of the risk that the RMS may try to obtain a court judgment against you for the unpaid tax. If you fail to pay the tax after this you may receive a judgment summons which requires you to attend court and explain why you haven’t paid. Ignoring a judgment summons and not attending court could result in a prison sentence.
It is important to understand that you have rights when you are a taxpayer. The RMS must hold to a Service Commitment and under this, it promises to treat taxpayers fairly and with courtesy. When you have clear evidence that the person who has dealt with your case was rude, unfair or overly harsh then you have a right to complain and ask that another person be assigned to your case.
After you have been contacted regarding unpaid tax, you will want to consider what to do next:
- Do you believe the amount being demanded is incorrect? If you do then do not hesitate to take action in order to get the figure corrected
- If you believe that you do owe tax, but you can’t pay immediately then you want to work out an agreement with the RMS
- In the instance that you are unable to work an agreement out with the RMS you may face enforcement action so it is important to understand each of those procedures and which defences could help you most.
There are people who have never declared their income and as result do not receive any demands from the RMS because it is unaware that the person has earned any taxable income or has been misled regarding the total amount earned. This situation is dangerous because the person may end up receiving a penalty for failing to report their income and that means the risk of potential prosecution.
If you are dealing with tax arrears, the situation can be stressful due to the complexity so you may benefit from outside counsel. You could benefit from help getting things straightened out through either a Debt Management Plan or, in more severe instances where you owe fifteen thousand pounds or more, an Individual Voluntary Arrangement (IVA).
Get started today sorting these issues out because waiting only makes your life more stressful than it needs to be.

When You Can’t Pay Your Tax


In this article we want to explore the primary aspects of an inability to pay one’s tax.


Some terms to better help you understand this article are as follows:


Collector – The person who purses those who have not paid tax. Today these individuals are part of the RMS (Receivables Management Service). However, before a collector will pursue you, an initial application for payment is sent from one of the two Accounts Offices in either Cumbernauld or Shipley. If, instead local enforcement action must be taken for payment not having been made, the Recovery Office will deal with this matter. Usually, the Recovery Office is named after the city or town where it is located and this office has jurisdiction for the area in which you live or trade. In cases where a bankruptcy is involved, the EIS (Enforcement and Insolvency Service) in Worthing will get involved. Those employed by the RMS may contact you if your returns are outstanding, but they do not process your return themselves.


The issuing and processing of returns is handled by RMS offices which in this article will be called “tax offices” because that is what they are traditionally called in an unofficial sense. It’s important to realize that different people within the RMS have different roles so the “collector” who contacts you is usually a different person from the RMS who does not deal with your specific tax return – that would be the “tax office”.


Warning Signs of Impending Problems


Each year, thousands of individuals get into arrears with their tax. Normally, the individual is made aware of this situation when they see a debt on their Statement of Account. After a short time, a collector will generally get in touch via letter or telephone and ask for an immediate payment. It is important to remain calm and fight any sense of panic you feel.


The RMS can frighten people by threatening them with legal action, but it is still crucial that you don’t panic if this happens because the situation may not be as dire as it seems. Remain calm as you work through the situation and consider your options, as well as how you got into the situation.


The first thing to remember is that you should never ignore a statement of account or a demand from a collector because that is the worst action to take. If there is any chance that you can resolve your situation then you will want to act quickly because if you do nothing then you are inadvertently raising the risk that you will face legal action.


Remember, the amount being demanded could be incorrect. You may find that you disagree with what either the collector or the Statement of Account state is the amount of tax owed. In some instances your statment may include what is called a determination, which is an estimate and made because the tax return (or tax returns) have not been completed. If this is the case it can be corrected.


Unfortunately, the collector who is paid to pursue you for upaid tax may or may not be trained in how to understand the tax so you could well be wasting effort if you try to persuade them that the figure is incorrect. Generally you will need to contact your tax office to make the needed adjustments because they are the ones who deal with your tax return.


You will end up liable for penalties, surcharges, interest and tax charged on determination if you have not completed your tax return (or tax returns) which is not only correct, but enforceable until you have submitted a completed return. Once you have submitted the return the amount of tax will be revised so that they reflect the amounts shown on your return. Then you will only need to pay the revised debt plus interest and any outstanding penalties or surcharges that are still due in respect of the revised debt.


In cases of ‘non-return’, outstanding debts are pursued until the required return is submitted, so even if you pay all that is demanded, they will continue to take action in order to get that return submitted. Generally this means daily penalties. Therefore, it is not in your interest to always submit your returns in a timely manner.


There are some instances where, if you do owe tax, you are allowed to pay it over time. Although tax should always be paid when it falls due, the RMS allows some people to pay their tax over a period of weeks, months or longer, in certain circumstances. This does mean, however, that interest will be added to the total amount due, but it’s possible this interest will be small. Generally  in these instances the RMS will keep reminding you that interest is being added to the total because they have no discretion and are unable to freze interest in order to help you clear the debt quicker.


Interest rates on unpaid tax is actually lower than is commonly believed, right now it is set at 6.5% per annum. As an example, being one month late on a tax bill of £2,000 means you are charged £11.


Many people are afraid that failure to pay tax in a timely manner leads to criminal prosecution and imprisonment, but this rarely happens. The RMS does prosecute a few people each year, but these are mostly cases where the person is alleged to have been seriously dishonest or trying to evade the tax. The RMS won’t take this course of action simply because an individual has not paid tax on time or if they are having trouble finding money to settle. Yet, at the same time it is important to be aware of the risk that the RMS may try to obtain a court judgment against you for the unpaid tax. If you fail to pay the tax after this you may receive a judgment summons which requires you to attend court and explain why you haven’t paid. Ignoring a judgment summons and not attending court could result in a prison sentence.


It is important to understand that you have rights when you are a taxpayer. The RMS must hold to a Service Commitment and under this, it promises to treat taxpayers fairly and with courtesy. When you have clear evidence that the person who has dealt with your case was rude, unfair or overly harsh then you have a right to complain and ask that another person be assigned to your case.


After you have been contacted regarding unpaid tax, you will want to consider what to do next:


- Do you believe the amount being demanded is incorrect? If you do then do not hesitate to take action in order to get the figure corrected


- If you believe that you do owe tax, but you can’t pay immediately then you want to work out an agreement with the RMS


- In the instance that you are unable to work an agreement out with the RMS you may face enforcement action so it is important to understand each of those procedures and which defences could help you most.


There are people who have never declared their income and as result do not receive any demands from the RMS because it is unaware that the person has earned any taxable income or has been misled regarding the total amount earned. This situation is dangerous because the person may end up receiving a penalty for failing to report their income and that means the risk of potential prosecution.


If you are dealing with tax arrears, the situation can be stressful due to the complexity so you may benefit from outside counsel. You could benefit from help getting things straightened out through either a Debt Management Plan or, in more severe instances where you owe fifteen thousand pounds or more, an Individual Voluntary Arrangement (IVA).


Get started today sorting these issues out because waiting only makes your life more stressful than it needs to be.

    Debt Advice for Gay and Lesbian Couples

    While there is a rather unhelpful stereotype in the media that depicts the stereotype as wealthy gay male couples who both have incomes with neither having any children, the reality is often quite a bit different. Gay and lesbian people face as much debt as any other people in the UK.

    A community funded survey done in Brighton in 1999 showed that most gay couples in that community and in surrounding areas were living on annual incomes of less than £15,000.

    An income that low means that a couple cannot save against potential income interruptions or other unexpected misfortunes and that means there can be no real long term financial security. If there is no genuine ability to save for the future then it is quite difficult to plan for a future where uncertainty is the only given.

    Debt at this income level can be catastrophic for both partners, leading to needless stress and causing difficulties within the relationship itself, regardless of the lifestyle the couple leads together. If creditors are hassling you or your partner, then it is important not to let things go too far. Gay and lesbian couples face the same financial challenges that all couples face and because of this, they are able to benefit from the same solutions because all people are equal when it comes to financial and legal rights, as well as challenges.

    If your debt is still near being under your control then you may want a Debt Management Plan, a sensible solution to re-structuring your payments into a single payment you can afford. More severe debt may require an Individual Voluntary Agreement (IVA) that can help manage debt that’s gone too far. Even a bankruptcy may help if it’s gone so far that repayment is no longer an option for you.

    Don’t let debt control your life, seek help online where you can get quality advice from a trained professional.

    Credit Card Debt

    With debt in general hitting a record high recently, and debt from credit cards soaring to excruciatingly high levels, many people fund themselves completely unable to repay their debt. What we want to do now is take a look at credit card debt and learn about some of the causes and solutions with which we can handle it.
    Credit card debt is all too easy to run up, but it can be quite difficult to alleviate once you’ve stacked the bills high enough and interest begins to set in. Credit cards and unsecured debt are one and the same so because of this, they must be treated that way. The first step towards tackling this problem is to get serious before the situation gets serious with you. Sit yourself down and begin creating a budget. It’s very simple, just list your income and your expenditures – be thorough. This particular budget should not include payments you make on unsecured credit, that includes overdrafts, credit cards and personal loans. You can deal with those later on.
    In order to get yourself back into financial balance as quickly as possible, you will want to open up a bank account that has no overdraft and no cheque facility. This is where you can save your money without having it be accessible to you for spending. It’s an important part of digging yourself out of debt.
    The major solutions to debt that is entirely out of hand, in the thousands of pounds and rising, are listed below:
    Debt Management Plan (DMP) – With a DMP, you work with a professional Insolvency Practitioner (IP) who will assist you in your efforts to free yourself from debt. A DMP will allow you to make a single monthly payment that you can afford instead of trying to juggle multiple bills. Under a DMP you have a responsible plan to repay your debts and creditors look favorably upon that. Many times, your IP can have your interest frozen by your creditors during your repayment period and once your DMP is completed, you are debt free.
    Individual Voluntary Agreement (IVA) – This form of insolvency is far less severe than a bankruptcy. It allows you to pay back your debt with a single, affordable monthly payment that is customised to your financial means by your IP who will work with you because each IVA is uniquely designed for the person taking it on. Because of the committment an IVA shows, once completed it does not have the same negative effect upon your credit rating as a bankruptcy.
    Bankruptcy – It is a major decision to declare bankruptcy and usually a last resort but once a person is truly so far behind they can never reasonably repay then it may be the right solution. Keep in mind that major assets can be lost and your credit rating will be affected for some time.
    If you are in serious debt, it is best not to wait to take action. Learn about the solutions that may fit your situation above. You owe it to yourself to ease the stress of any debt, especially from credit cards. It’s easy to get the help you need and you will be able to sleep through the night once again so why not take action now?

    With debt in general hitting a record high recently, and debt from credit cards soaring to excruciatingly high levels, many people fund themselves completely unable to repay their debt. What we want to do now is take a look at credit card debt and learn about some of the causes and solutions with which we can handle it.

    Credit card debt is all too easy to run up, but it can be quite difficult to alleviate once you’ve stacked the bills high enough and interest begins to set in. Credit cards and unsecured debt are one and the same so because of this, they must be treated that way. The first step towards tackling this problem is to get serious before the situation gets serious with you. Sit yourself down and begin creating a budget. It’s very simple, just list your income and your expenditures – be thorough. This particular budget should not include payments you make on unsecured credit, that includes overdrafts, credit cards and personal loans. You can deal with those later on.

    In order to get yourself back into financial balance as quickly as possible, you will want to open up a bank account that has no overdraft and no cheque facility. This is where you can save your money without having it be accessible to you for spending. It’s an important part of digging yourself out of debt.

    The major solutions to debt that is entirely out of hand, in the thousands of pounds and rising, are listed below:

    Debt Management Plan (DMP) – With a DMP, you work with a professional Insolvency Practitioner (IP) who will assist you in your efforts to free yourself from debt. A DMP will allow you to make a single monthly payment that you can afford instead of trying to juggle multiple bills. Under a DMP you have a responsible plan to repay your debts and creditors look favorably upon that. Many times, your IP can have your interest frozen by your creditors during your repayment period and once your DMP is completed, you are debt free.

    Individual Voluntary Agreement (IVA) – This form of insolvency is far less severe than a bankruptcy. It allows you to pay back your debt with a single, affordable monthly payment that is customised to your financial means by your IP who will work with you because each IVA is uniquely designed for the person taking it on. Because of the commitment an IVA shows, once completed it does not have the same negative effect upon your credit rating as a bankruptcy.

    Bankruptcy- It is a major decision to declare bankruptcy and usually a last resort but once a person is truly so far behind they can never reasonably repay then it may be the right solution. Keep in mind that major assets can be lost and your credit rating will be affected for some time.

    If you are in serious debt, it is best not to wait to take action. Learn about the solutions that may fit your situation above. You owe it to yourself to ease the stress of any debt, especially from credit cards. It’s easy to get the help you need and you will be able to sleep through the night once again so why not take action now?

    Store Card Debt

    In the UK there are more than 11 million people who hold store cards and the total outstanding balances on those cards now exceeds £2 Billion
    Problem Areas in Regards to UK Store Card Debt
    There are quite high interest rates attached to store card debt that you will want to be aware of because it is extremely easy to allow debts on your store card to pile up. In the UK this is becoming an increasingly difficult problem due to the public embracing the convenience that store cards offer them.
    For British shoppers, the allure of saving up to 20% on purchases via store cards is nearly irresistible. However, the downfall of giving in to this temptation is that interest rates on store card debt can be as high as 30% so as you can see, the savings are then nullified and the store card companies end up profiting quite handsomely. Millions of consumers are facing debt trouble from this situation.
    What a store card is:
    A store card is a branded credit card that is useable only in a single shop or chain. Traditionally, they are the most expensive method by which you can borrow money because the APR (Annual Percentage Rate) is 30%, double the rate of a high street credit card.
    Understanding the benefits store cards offer:
    - Consumers can use store cards during a significant period of no interest being charged and take advantage of incentives or special offers that the retailers have in order to compound their savings
    - Certain customers want a relationship with a certain store or brand and since they are able to obtain discounts from these favored stores or brands they feel the card is beneficial to them. Often, they are told about new merchandise before customers who do not have that store card. These customers appreciate the ‘designer label’ feel of owning and using a store card.
    Understanding the disadvantages store cards can pose:
    While credit is an extremely useful tool for millions of people in the UK, it is still important to be aware of the risks posed by any unsecured credit. A lack of financial education can leave people vulnerable to poor decision making when it comes to balancing their finances. Those who are already struggling financially face danger when they give in to temptations of ‘interest free’ offers or ‘pay nothing for six months’ programs that sound more beneficial than they end up being in light of that individuals real monetary circumstances. Often, consumers who spend this way are simply hoping the future will be brighter than the present and so they willfully take on unwise debt knowing the consequences that can result and hoping they will avoid them.
    Many times, over eager sales people promote store cards to customers that are uneducated in how to use them properly. With these customers, offering incentives can really win them over because they do not understand the full ramifications of what will happen when they are unable to avoid the high interest rates by paying off their debt in time. It is extremely easy to talk a person into signing up for a store card because the benefits are real, but unless the customer can truly pay the debt back within the time frame then the store card is a liability, rather than an asset. While it is tempting to try to benefit from the discounts offered on your shopping expenditures, it is all too easy for that store card debt to rise out of reach.
    Since the incredibly high interest rates are the danger with store cards, it is commonly advised that consumers avoid them unless they intend to and are able to pay down their store card bill as soon as it arrives. Shoppers who have budgeted money to pay off the balance during the period without interest can benefit from these borrowing tools.
    Who provides the majority of store card debt?
    Over 20 million store cards are issued annually in the UK and in 2007 alone, store card debt totaled over 2 billion pounds. Approximately 70 UK retailers offer store cards, primarily those in the department store and retail clothing sectors.
    Research indicates that the following store cards are the most expensive in terms of debt:
    - Dorothy Perkins
    - Warehouse
    - Miss Selfridge
    - Laura Ashley
    - Burtons
    - Topshop
    - Oasis
    - Russel and Bromley
    - Toys R Us
    To give you an idea of exactly how severe the interest charges on store cards can be, the average store card charges close to 25% APR. At this rate, an £800 balance would end up costing £126.83 in interest per year. Yet due to the easy application process for store cards versus lower interest rate credit cards, UK consumers continue to be seemingly obsessed with this method of borrowing.
    Debt troubles from store cards have led many people to seek solutions and here are a few of those that have worked for others:
    Debt Management Plan – With this option, you can make one payment per month that is divided up between creditors for you by a professional Insolvency Practitioner. You can find out more about Debt Management Plans in the UK by using the web.
    Individual Voluntary Agreement (IVA) – This form of insolvency is growing in popularity each year because it is not as severe in consequences as a bankruptcy, but does free a person from debts over time. Creditors appreciate an IVA and often work with those who seek them since they are more likely to recover their debts than with a bankruptcy. Since an IVA is less devastating to your credit, it makes it easier to obtain credit once again after you’re back on you feet financially. Also, while you cannot force any creditor to work with you, your Insolvency Practitioner who sets up your IVA will often be able to negotiate a freezing of interest to rein your debt in.
    Bankruptcy – Typically, this is a last resort means of dealing with store card or other debts. It generally comes with the loss of all the major assets owned by that debtor.
    If you are struggling under the weight of debt from store cards, the important thing is not to wallow in the guilt, but to seek out a solution. Those outlined above may be right for your situation so do not hestitate to find out because you deserve a chance to get your finances back under control.

    In the UK there are more than 11 million people who hold store cards and the total outstanding balances on those cards now exceeds £2 Billion

    Problem Areas in Regards to UK Store Card Debt

    There are quite high interest rates attached to store card debt that you will want to be aware of because it is extremely easy to allow debts on your store card to pile up. In the UK this is becoming an increasingly difficult problem due to the public embracing the convenience that store cards offer them.

    For British shoppers, the allure of saving up to 20% on purchases via store cards is nearly irresistible. However, the downfall of giving in to this temptation is that interest rates on store card debt can be as high as 30% so as you can see, the savings are then nullified and the store card companies end up profiting quite handsomely. Millions of consumers are facing debt trouble from this situation.

    What a store card is:

    A store card is a branded credit card that is usable only in a single shop or chain. Traditionally, they are the most expensive method by which you can borrow money because the APR (Annual Percentage Rate) is 30%, double the rate of a high street credit card.

    Understanding the benefits store cards offer:

    - Consumers can use store cards during a significant period of no interest being charged and take advantage of incentives or special offers that the retailers have in order to compound their savings

    - Certain customers want a relationship with a certain store or brand and since they are able to obtain discounts from these favored stores or brands they feel the card is beneficial to them. Often, they are told about new merchandise before customers who do not have that store card. These customers appreciate the ‘designer label’ feel of owning and using a store card.

    Understanding the disadvantages store cards can pose:

    While credit is an extremely useful tool for millions of people in the UK, it is still important to be aware of the risks posed by any unsecured credit. A lack of financial education can leave people vulnerable to poor decision making when it comes to balancing their finances. Those who are already struggling financially face danger when they give in to temptations of ‘interest free’ offers or ‘pay nothing for six months’ programs that sound more beneficial than they end up being in light of that individuals real monetary circumstances. Often, consumers who spend this way are simply hoping the future will be brighter than the present and so they willfully take on unwise debt knowing the consequences that can result and hoping they will avoid them.

    Many times, over eager sales people promote store cards to customers that are uneducated in how to use them properly. With these customers, offering incentives can really win them over because they do not understand the full ramifications of what will happen when they are unable to avoid the high interest rates by paying off their debt in time. It is extremely easy to talk a person into signing up for a store card because the benefits are real, but unless the customer can truly pay the debt back within the time frame then the store card is a liability, rather than an asset. While it is tempting to try to benefit from the discounts offered on your shopping expenditures, it is all too easy for that store card debt to rise out of reach.

    Since the incredibly high interest rates are the danger with store cards, it is commonly advised that consumers avoid them unless they intend to and are able to pay down their store card bill as soon as it arrives. Shoppers who have budgeted money to pay off the balance during the period without interest can benefit from these borrowing tools.

    Who provides the majority of store card debt?

    Over 20 million store cards are issued annually in the UK and in 2007 alone, store card debt totaled over 2 billion pounds. Approximately 70 UK retailers offer store cards, primarily those in the department store and retail clothing sectors.

    Research indicates that the following store cards are the most expensive in terms of debt:

    - Dorothy Perkins

    - Warehouse

    - Miss Selfridge

    - Laura Ashley

    - Burtons

    - Topshop

    - Oasis

    - Russel and Bromley

    - Toys R Us

    To give you an idea of exactly how severe the interest charges on store cards can be, the average store card charges close to 25% APR. At this rate, an £800 balance would end up costing £126.83 in interest per year. Yet due to the easy application process for store cards versus lower interest rate credit cards, UK consumers continue to be seemingly obsessed with this method of borrowing.

    Debt troubles from store cards have led many people to seek solutions and here are a few of those that have worked for others:

    Debt Management Plan – With this option, you can make one payment per month that is divided up between creditors for you by a professional Insolvency Practitioner. You can find out more about Debt Management Plans in the UK by using the web.

    Individual Voluntary Agreement (IVA) – This form of insolvency is growing in popularity each year because it is not as severe in consequences as a bankruptcy, but does free a person from debts over time. Creditors appreciate an IVA and often work with those who seek them since they are more likely to recover their debts than with a bankruptcy. Since an IVA is less devastating to your credit, it makes it easier to obtain credit once again after you’re back on you feet financially. Also, while you cannot force any creditor to work with you, your Insolvency Practitioner who sets up your IVA will often be able to negotiate a freezing of interest to rein your debt in.

    Bankruptcy – Typically, this is a last resort means of dealing with store card or other debts. It generally comes with the loss of all the major assets owned by that debtor.

    If you are struggling under the weight of debt from store cards, the important thing is not to wallow in the guilt, but to seek out a solution. Those outlined above may be right for your situation so do not hesitate to find out because you deserve a chance to get your finances back under control.

    Debt After a Death

    Debt and Bereavement
    This difficult topic has many facets that need to be considered if we are to have a fuller understanding of the role that death plays in debt accumulation. Below, you will find some facts and potentially helpful information to assist you in understand how death affects debt situations and vice versa.
    Debt can occur as the result of:
    Being incurred because of the bereavement of a loved one
    The death of a partner
    A death in the family
    Many people do not have the funds they need to pay for funeral expenses because they did not know that the average funeral costs more than £1,000. As a result, they turn to credit and end up in debt.
    It is important to understand that most funerals must be paid for before inheritance can be paid out from a will.
    After a death, you would be wise to ask yourself the following questions:
    - Is there a hidden stash of cash that can be used to cover funeral costs that your loved one arranged in advance?
    - Was a prepaid funeral plan arranged prior to their death in order to cover funeeal expenses?
    - Can you locate a cremation society certificate to help cover costs?
    - Did your loved one have cleared funds set aside to cover funeral costs?
    - Did your loved one pay money into a special savings plan to cover funeral expenses?
    Some people will opt to arrange a simple funeral in order to avoid going into debt after a death.
    You need to be aware that a simple or basic funeral is comprised of:
    Making all required disbursements
    Making all required funeral arrangements and providing expert advice
    Removing the deceased to a resting place that is suitable and allowing 10 running miles within typical working hours
    Providing a simple coffin, often veneered and transportation via hearse to a crematorium or cemetary
    Providing all needed staff as well as a funeral director
    Many people wonder about debt after death and are worried about the possibility of a deceased person passing on debts to surviving family members or other people related to the deceased. Children, especially, fear that they may inherit their parents’ debts after they have passed away. Older people and their family’s obligation in paying their debts after death is a delicate topic so insufficient communication among family members can increase the fear that the person’s debt could be the responsibility of surviving family members after the older person is deceased.
    There are certain situations in which surviving relatives or third parties can be held responsible for debt after a death and they are as follows:
    - When a third party is guarantor of debts to a person now deceased, the full liability will rest on the surviving guarantor
    - Debts must be paid from the estate of the a deceased person
    - If a debt is a joint debt, the surviving part must assume full liability to pay that debt off
    In any of these cases, debt can be unexpected and even frightening, beyond being simply distressing. If you find yourself needing to seek solutions to handle you debt, you may wish to investigate a Debt Management Plan if the debt is small or an Individual Voluntary Agreement (IVA) if the debt is thousands of pounds. You owe it to yourself to get your peace of mind back by finding a debt solution that will help you resume your former way of life.

    Debt and Bereavement

    This difficult topic has many facets that need to be considered if we are to have a fuller understanding of the role that death plays in debt accumulation. Below, you will find some facts and potentially helpful information to assist you in understand how death affects debt situations and vice versa.

    Debt can occur as the result of:

    Being incurred because of the bereavement of a loved one

    The death of a partner

    A death in the family

    Many people do not have the funds they need to pay for funeral expenses because they did not know that the average funeral costs more than £1,000. As a result, they turn to credit and end up in debt.

    It is important to understand that most funerals must be paid for before inheritance can be paid out from a will.

    After a death, you would be wise to ask yourself the following questions:

    - Is there a hidden stash of cash that can be used to cover funeral costs that your loved one arranged in advance?

    - Was a prepaid funeral plan arranged prior to their death in order to cover funeral expenses?

    - Can you locate a cremation society certificate to help cover costs?

    - Did your loved one have cleared funds set aside to cover funeral costs?

    - Did your loved one pay money into a special savings plan to cover funeral expenses?

    Some people will opt to arrange a simple funeral in order to avoid going into debt after a death.

    You need to be aware that a simple or basic funeral is comprised of:

    Making all required disbursements

    Making all required funeral arrangements and providing expert advice

    Removing the deceased to a resting place that is suitable and allowing 10 running miles within typical working hours

    Providing a simple coffin, often veneered and transportation via hearse to a crematorium or cemetery

    Providing all needed staff as well as a funeral director

    Many people wonder about debt after death and are worried about the possibility of a deceased person passing on debts to surviving family members or other people related to the deceased. Children, especially, fear that they may inherit their parents’ debts after they have passed away. Older people and their family’s obligation in paying their debts after death is a delicate topic so insufficient communication among family members can increase the fear that the person’s debt could be the responsibility of surviving family members after the older person is deceased.

    There are certain situations in which surviving relatives or third parties can be held responsible for debt after a death and they are as follows:

    - When a third party is guarantor of debts to a person now deceased, the full liability will rest on the surviving guarantor

    - Debts must be paid from the estate of the a deceased person

    - If a debt is a joint debt, the surviving part must assume full liability to pay that debt off

    In any of these cases, debt can be unexpected and even frightening, beyond being simply distressing. If you find yourself needing to seek solutions to handle you debt, you may wish to investigate a Debt Management Plan if the debt is small or an Individual Voluntary Agreement (IVA) if the debt is thousands of pounds. You owe it to yourself to get your peace of mind back by finding a debt solution that will help you resume your former way of life.

    Debt from Divorce or Separation Between a Married Couple

    Sadly, debt due to a divorce or separation is a part of the credit-led society we live in and not just in the UK. In this article we want to cover some of the ways that people choose to deal with the financial repurcussions of the break up of a marriage. There are strategies out there to help individuals cope and lessen the trauma of separation or divorce.
    Let’s take a look at what going through a divorce as it relates to debt acquired from the divorce process itself.
    The process of filing for and obtaining a divorce can leave both individuals in quite a bit of debt. While the emotional aspects of a divorce will certainly take their toll, the financial processes can be very taxing, as well, because the debts from dividing up debts from a marriage can leave a deep impression on your bank account. There as been a move towards a more peaceful process of sorting through separation terms due to the costly process dissolving a marriage has always been, both in terms of financial and emotional resources needed.
    Recent surveys have shown that Britain’s average 160,000 divorces per year and not only stressful, but according to nearly half of those who responded to the survey said that breaking up caused more financial hardships than redundancy or bereavement. Many times, those who go through a split up end up using their personal savings, as well, and 36% of those surveyed claimed they’d gone into heavy personal debt due to the breakup. The statistics are not pretty, with one third of divorcees seeking professional debt counseling or advice, 28% finding it hard to adjust to living off of a single income and a tenth of individuals having such difficulty managing their debts that they’d begun to consider bankruptcy. Oftentimes, after enduring the rigors of a divorce, the newly single would wind up spending on holidays or luxuries with their credit cards that they never would have if they’d still been married. During the divorce process this sort of behaviour can really lead to antagonism between those seeking the divorce.
    Although a quarter of the survey respondants wished they had come to an amicable agreement on finances and managed to control their own, a very small percentage said they had actually managed to do so. Out of the 78% of respondants who ended their marriages without hostilities, nearly all of them said they had major work to do to fix their finances. The average that divorcees who sought help owed in unsecured debt was around £20,000 with half of those people being an average of £4,000 in debt from the cost of setting up a new home. Many of those people chose a less severe alternative to bankrupty called an Individual Voluntary Agreement (IVA) and massively reduced their debt levels.
    If you or someone you know is facing debt from divorce, there are alternatives to bankruptcy available that can help. Information on seeking a Debt Management Plan is available, as is information on IVAs and even, in drastic cases, Bankruptcy. Whatever method you choose, don’t wait until the debts begin to add too much stress to your life. It’s hard enough enduring the circumstances of divorce without enduring financial headaches, as well.

    Sadly, debt due to a divorce or separation is a part of the credit-led society we live in and not just in the UK. In this article we want to cover some of the ways that people choose to deal with the financial repercussions of the break up of a marriage. There are strategies out there to help individuals cope and lessen the trauma of separation or divorce.

    Let’s take a look at what going through a divorce as it relates to debt acquired from the divorce process itself.

    The process of filing for and obtaining a divorce can leave both individuals in quite a bit of debt. While the emotional aspects of a divorce will certainly take their toll, the financial processes can be very taxing, as well, because the debts from dividing up debts from a marriage can leave a deep impression on your bank account. There as been a move towards a more peaceful process of sorting through separation terms due to the costly process dissolving a marriage has always been, both in terms of financial and emotional resources needed.

    Recent surveys have shown that Britain’s average 160,000 divorces per year and not only stressful, but according to nearly half of those who responded to the survey said that breaking up caused more financial hardships than redundancy or bereavement. Many times, those who go through a split up end up using their personal savings, as well, and 36% of those surveyed claimed they’d gone into heavy personal debt due to the breakup. The statistics are not pretty, with one third of divorcees seeking professional debt counseling or advice, 28% finding it hard to adjust to living off of a single income and a tenth of individuals having such difficulty managing their debts that they’d begun to consider bankruptcy. Oftentimes, after enduring the rigors of a divorce, the newly single would wind up spending on holidays or luxuries with their credit cards that they never would have if they’d still been married. During the divorce process this sort of behaviour can really lead to antagonism between those seeking the divorce.

    Although a quarter of the survey respondents wished they had come to an amicable agreement on finances and managed to control their own, a very small percentage said they had actually managed to do so. Out of the 78% of respondents who ended their marriages without hostilities, nearly all of them said they had major work to do to fix their finances. The average that divorcees who sought help owed in unsecured debt was around £20,000 with half of those people being an average of £4,000 in debt from the cost of setting up a new home. Many of those people chose a less severe alternative to bankruptcy called an Individual Voluntary Agreement (IVA) and massively reduced their debt levels.

    If you or someone you know is facing debt from divorce, there are alternatives to bankruptcy available that can help. Information on seeking a Debt Management Plan is available, as is information on IVAs and even, in drastic cases, Bankruptcy. Whatever method you choose, don’t wait until the debts begin to add too much stress to your life. It’s hard enough enduring the circumstances of divorce without enduring financial headaches, as well.

    Debt from Disability

    Specialist Debt Support Unit
    Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.
    It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.
    In the UK, disability includes a variety of unique circumstances leading to debt that can include:
    - People with physical impairments that require medical equipment for daily living
    - People with mental health conditions that affect their everyday life
    - A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances
    - There are many types of sensory impairment that people suffer that can restrict their daily activities
    Reasons for Debt from a Disability
    There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:
    - In times of personal crisis, financial concerns go understandably neglected
    - Cost of respite care can lead to or increase debt
    - Disability transport costs can lead to debt
    - Cost of hiring people to provide care if one’s family cannot
    - Because financial concerns are not focused on, benefits may not be claimed as they should
    - Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability
    - Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind
    - Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself
    - Debt repayments can wreak havoc on already limited and fragile income
    The Connections Between Disabilities and Debt
    A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.
    These situations mean that debt is created in one or more of the following ways:
    * Typically, a combination of circumstances and factors lead to debt form disability
    * Costly, recurring purchases of specific items that are required by a disabling health condition
    * Not enough assistance from the benefits system or none at all
    * Often dealing with a disability means high telephone bills and high fuel bills
    * At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle
    * Expenses associated with a disability can lead to debts
    * There can be a frequent need to replace cruical furniture
    * Alteration of accomodations may be required
    * A move may be needed to have a situation with better accomodations for the disabled
    * Bearing the cost of replacing items damaged by a child with behavioural problems
    * Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis
    * Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker
    Job Options and the Employment Market for Those with a Disability
    Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.
    A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.
    Deferring Payments on Debt from Disability
    If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.
    Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.
    If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.
    If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.
    The Impact from Disability-related Debt on Those Caring for Disabled People
    Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.
    In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.
    The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.
    Mental Health Issues and Their Role on Disability-related Debt
    Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassaing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.
    For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.
    How Creditors Respond to Those with Disabilities Who Are in Debt
    Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.
    The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.

    Specialist Debt Support Unit

    Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.

    It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.

    In the UK, disability includes a variety of unique circumstances leading to debt that can include:

    - People with physical impairments that require medical equipment for daily living

    - People with mental health conditions that affect their everyday life

    - A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances

    - There are many types of sensory impairment that people suffer that can restrict their daily activities

    Reasons for Debt from a Disability

    There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:

    - In times of personal crisis, financial concerns go understandably neglected

    - Cost of respite care can lead to or increase debt

    - Disability transport costs can lead to debt

    - Cost of hiring people to provide care if one’s family cannot

    - Because financial concerns are not focused on, benefits may not be claimed as they should

    - Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability

    - Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind

    - Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself

    - Debt repayments can wreak havoc on already limited and fragile income

    The Connections Between Disabilities and Debt

    A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.

    These situations mean that debt is created in one or more of the following ways:

    * Typically, a combination of circumstances and factors lead to debt form disability

    * Costly, recurring purchases of specific items that are required by a disabling health condition

    * Not enough assistance from the benefits system or none at all

    * Often dealing with a disability means high telephone bills and high fuel bills

    * At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle

    * Expenses associated with a disability can lead to debts

    * There can be a frequent need to replace crucial furniture

    * Alteration of accommodations may be required

    * A move may be needed to have a situation with better accommodations for the disabled

    * Bearing the cost of replacing items damaged by a child with behavioural problems

    * Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis

    * Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker

    Job Options and the Employment Market for Those with a Disability

    Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.

    A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.

    Deferring Payments on Debt from Disability

    If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.

    Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.

    If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.

    If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.

    The Impact from Disability-related Debt on Those Caring for Disabled People

    Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.

    In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.

    The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.

    Mental Health Issues and Their Role on Disability-related Debt

    Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.

    For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.

    How Creditors Respond to Those with Disabilities Who Are in Debt

    Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.

    The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.

    Debt from Mortgage Shortfalls

    If the lender from whom you have mortgaged your home repossesses it, they will sell it in order to get the money they have lost back. In the instance that the house sells for less than what you owe on it, the lenders will require you to pay back the remaining debt. This is called a ‘mortgage shortfall’ and is no longer considered a ‘priority debt’ because the lender can’t claim your possessions as assets. However, they will often attempt to cover the debt for up to 12 years. This article is intended to help clarify options available for those who are being asked to make a mortgage shortfall.

    When you are worried you may fall behind on your mortgage repayment schedule or even end up failing to meet the repayments altogether, you will want to get in touch with your lender as soon as you can. Most lenders will try to help you using procedures they have developed for handling payment troubles. The vast majority of mortgage lenders are exceptionally keen to assist their customer base work through payment issues without adding humiliation to the process.

    Depending upon your history in making payments and whether you face long or short term difficulties, your lender may agree to one or more of the following:

    - They may lower your payments for a certain length of time
    - They may limit the time they charge you interest during instead of billing for both capital and interest
    - They may offer a ‘payment holiday’
    - They may reduce your payments by extending the length of your mortgage
    -

    If you’re struggling to make the payments and depending on your payment history and whether your difficulties are likely to be long or short term, your lender might agree to:

    reduce your payments for a set period
    charge you interest only for a while, if you’ve got a repayment mortgage (usually you pay capital and interest)
    give you a ‘payment holiday’
    extend your mortgage term to reduce your payments

    For Those with a Mortgage That Began On or After 31 October, 2004

    Most mortgages taken out after this date are regulated by the Financial Service Authority (FSA) and under FSA rules, lenders must send you regular statements to inform you of your current position as far as arrears. Lenders must also treat you fairly in spite of your circumstances. The FSA also has rules on what must be done if your home is ever repossessed.

    The Financial Service Authority (FSA) regulates most mortgages taken out from this date. Under FSA rules lenders must treat you fairly and send you regular statements to keep you informed about your current arrears position. There are also rules covering what the lender must do if it intends to repossess your home.

    How to Deal With Mortgage Related Debt

    For those facing debt due to an inability to make their mortgage payments, an IVA (Individual Voluntary Agreement) can be an excellent solution. It will allow you to pay down what you owe over time instead of potentially losing your home. Learn more about IVAs and help ease the stress that a mortgage in jeopardy can bring.

    Debt from Car Financing

    Debt from Car Financing

    Car loans and car financing are two areas where it is very easy to get yourself in debt. Many companies now make it too easy to get a car loan or car financing for those who have bad credit. Some of these lenders will offer car financing to those who have been rejected by mainstream banks. Car finance is available for both new and used cars with the car finance industry itself being highly segmented to offer a wide array of options to the public so that they can apply for approved car financing.

    Debt from car financing usually occurs due to:

    Car financing for bad credit
    Bad credit car loans
    Debt with car loans

    Car finance companies frequently offer competitive interest rates and flexible payment options that are attractive to the public in the beginning. However, debt problems that come about from car financing are capable of leading to the need for debt solutions and even bankruptcy.

    The Types of Car Finance Available

    When you have a car in mind that you want and a figure you are willing to pay, you need to decide what type of loan you need and the plans that you have for that car. If you are considering buying a new or used car that you plan to keep for at least four years then a hire purchase or straight loan will end up costing you less in the long run. For those planning to keep a car for no more than three years before swapping it for another new car then a personal contract purchase plan (PCP) is an option that should be considered.

    Normal Unsecured Loans

    With this method, the borrower gets the money in advance to buy goods outright and then repays the debt in monthly instalments. Unsecured loans are available from building societies, banks and independent finance companies.

    - Advantages of an Unsecured Loan

    You become effectively a cash buyer
    You can buy anywhere and negotiate the best price for you
    You own the car from the start

    - Disadvantages of an Unsecured Loan

    More difficult to obtain than other types of finance
    Homeowners with sound finances are preferred by these lenders

    Car Hire Purchase

    With this method, you pay deposit and then a fixed amount for a specified number of months, after which you own the car. It is available for new and cars that are less than two years old. Older cars are excluded because their value would be too low by the end of the loan period. Car hire purchase is available from car dealers, loan companies and banks.

    - Advantages of a Car Hire Purchase

    They are straightforward and easy to obtain
    They are cheaper than many other types of loans

    - Disadvantages of a Car Hire Purchase

    You cannot sell the car without permission because the vehicle is property of the lender until the agreement ends.
    Those who fall behind by two or more repayments risk the finance company repossessing the car, auctioning it cheaply and then suing to recover anything still owed plus any costs incurred.

    Personal Contract Purchase

    Under this method, you pay a deposit of up to 20% of the total and then an agreed number of low monthly repayments over a period of up to 3 years. At the outset of a Personal Contract Purchase (PCP), a Guaranteed Minimum Future Value (GMFV) is decided and agreed upon. This GMFV is the final payment of the PCP and afterwards you can choose to part-exchange it for another new car, hand it back or keep it.

    This method is available only for new cars or those less than two years old. If you want to keep the car you have to pay the GMFV at the end of the period, however you owe nothing if you hand it back but you won’t get your deposit or payments back, either. When you part-exchange the vehicle, the dealer values it and if it’s worth more than the GMFV they put the amount towards the deposit for your next car. If it’s worth less you do not need to make up the difference. You can get a PCP through banks, car dealers and independent finance houses.

    - Advantages of a Personal Contract Purchase

    This is a convenient method of funding a new car every two to three years
    You can get a lower monthly payment than with other types of finance

    - Disadvantages of a Personal Contract Purchase

    Those who need to end their agreement early may need to pay a penalty
    You will extra if you exceed the agreed annual mileage limit
    You must correctly service the car and keep it in good condition
    You cannot easily sell the car since it belongs to the finance company until the PCP ends

    Trouble from Car Finance Debt

    If you are struggling with mounting debt and you need help, consider learning more about Debt Management Plans or if the debt is more severe, an IVA (Individual Voluntary Agreement). It’s worth your while to resolve debt issues while they are small, so don’t wait, seek help today.