Archive for the Debt Management Category
For Those Who are Struggling with Debt
Plenty of people in the UK are in debt due to personal loans. Thousands of people each week are seeking help from debt that stems from personal loans because these loans now cost more than they can afford to repay.
Many people have very high interest rates on their loans and the loans themselves are long term so the future does not look very bright. One of the primary causes of this type of situation is that people have had past credit problems that make them unable to get reasonable interest rates on their personal loans.
In other instances, people do not actually have poor credit histories, but the lenders are seeing either incorrect or misleading information on their credit reports which cause the lenders to raise higher rates of interest. These people are vulnerable because they are led into debt when they take out personal loans with interest rates that are extortiate.
Other people have taken out personal loans and acquired debt because they were in a rush and did not read the information thoroughly. Without doing proper cost comparisons, you can end up working with loan companies that charge 95% interest on the loan products they offer.
Even though the sales staff of loan companies are not forcing people to sign up for loans, many people wind up feeling rushed into agreeing to the loan. Some people will ring different loan companies in an effort to find refinancing for their loan and get a slightly lower rate, even though this rate is higher than an average credit card interest rate. Many times these people are told by sales staff that they can borrow more and make the same payment they are already making. The sales staff attempt to convince these borrowers that they will have extra money to do whatever they like with. While this works as a sales strategy, the borrowers who fall for this often do not think the additional debt they are taking on all the way through and as a result, end up paying more when they had intended to lower their debt.
It is important to think very carefully about your personal financial situation before you secure other debts against your home. It is possible that your home could be repossessed if you fall behind in your repayments on a mortgage or any debt that you have secured on it. Plenty of people in the UK ignore this and end up heavily in debt from personal loans.
Here are some of the most common loans people end up in debt from:
* Business loans
* Unsecured Personal Loans
* Unsecured Loans
* Secured Loans
* Home Loans
* Car Loans
* Payday Loans
* Education Loans
* Holiday Loans
* Debt Consolidation Loans
* Logbook Loans
* Home Improvement Loans
If any of these have lead you into debt, then you will want to consider what can be done to get you back into financial balance once again. Debt is so easy to take on, but it can lead to massive strain on you and your relationships, as well as stress for your family. You owe it to yourself to learn about Debt Management Programs or if you owe quite a lot, an IVA (Individual Voluntary Agreement). If Bankruptcy is a consideration then you can learn more about that and how it could help you. What you need is professional advice from a licenesed Insolvency Practitioner who will work with you and understand your unique personal situation.
Keep in mind that thousands of sales oriented businesses are out there profiting from arranging unsecured personal loans and many of these companies work to rush callers into borrowing anywhere from £1,000 up to £50,000 on an unsecured loan. The real issues is that plenty of these companies do not offer competitive interest rates. They are also quick to sell loans that are unwise for the individual borrower’s unique situation. Be careful!
For Those Who are Struggling with Debt
Plenty of people in the UK are in debt due to personal loans. Thousands of people each week are seeking help from debt that stems from personal loans because these loans now cost more than they can afford to repay.
Many people have very high interest rates on their loans and the loans themselves are long term so the future does not look very bright. One of the primary causes of this type of situation is that people have had past credit problems that make them unable to get reasonable interest rates on their personal loans.
In other instances, people do not actually have poor credit histories, but the lenders are seeing either incorrect or misleading information on their credit reports which cause the lenders to raise higher rates of interest. These people are vulnerable because they are led into debt when they take out personal loans with interest rates that are extortionate.
Other people have taken out personal loans and acquired debt because they were in a rush and did not read the information thoroughly. Without doing proper cost comparisons, you can end up working with loan companies that charge 95% interest on the loan products they offer.
Even though the sales staff of loan companies are not forcing people to sign up for loans, many people wind up feeling rushed into agreeing to the loan. Some people will ring different loan companies in an effort to find refinancing for their loan and get a slightly lower rate, even though this rate is higher than an average credit card interest rate. Many times these people are told by sales staff that they can borrow more and make the same payment they are already making. The sales staff attempt to convince these borrowers that they will have extra money to do whatever they like with. While this works as a sales strategy, the borrowers who fall for this often do not think the additional debt they are taking on all the way through and as a result, end up paying more when they had intended to lower their debt.
It is important to think very carefully about your personal financial situation before you secure other debts against your home. It is possible that your home could be repossessed if you fall behind in your repayments on a mortgage or any debt that you have secured on it. Plenty of people in the UK ignore this and end up heavily in debt from personal loans.
Here are some of the most common loans people end up in debt from:
* Business loans
* Unsecured Personal Loans
* Unsecured Loans
* Secured Loans
* Home Loans
* Car Loans
* Payday Loans
* Education Loans
* Holiday Loans
* Debt Consolidation Loans
* Logbook Loans
* Home Improvement Loans
If any of these have lead you into debt, then you will want to consider what can be done to get you back into financial balance once again. Debt is so easy to take on, but it can lead to massive strain on you and your relationships, as well as stress for your family. You owe it to yourself to learn about Debt Management Programs or if you owe quite a lot, an IVA (Individual Voluntary Agreement). If Bankruptcy is a consideration then you can learn more about that and how it could help you. What you need is professional advice from a licensed Insolvency Practitioner who will work with you and understand your unique personal situation.
Keep in mind that thousands of sales oriented businesses are out there profiting from arranging unsecured personal loans and many of these companies work to rush callers into borrowing anywhere from £1,000 up to £50,000 on an unsecured loan. The real issues is that plenty of these companies do not offer competitive interest rates. They are also quick to sell loans that are unwise for the individual borrower’s unique situation. Be careful!
Debt from Ill Health is More Common Than You Think
One of the more common problems that people end up finding themselves in debt due to is ill health. Unfortunately, the stress from debt also ends up being a contributing factor to health problems which creates something of a circle of negative effects.
Some of the common methods of UK debt management which may help solve ill health debt problems are:
1 – IVA (Individual Voluntary Arrangement)
1 – Debt Management Plan
3 – Protected Trust Deed (for residents of Scotland)
4 – Bankruptcy
There are so many reasons that people experience debt due to ill health. Here are a few reasons that you might not have thought of:
- In times of illness, finances are often understandably neglected
- A sudden drop in income is not unusual since it may lead to a loss of work
- The cost of tranport for treatment can increase debt
- The cost of respite care can also raise debts
- Situations of deteriorating health from illness due to the process of handling debt in the first place can make dealing with the debt even more difficult
- Food required for special diets or medicines needed to treat illness can lead to debt
- Ill health can force clients in physical labour jobs to lose work or stop working entirely
- Making payments on debts can drastically reduce the disposable incomes of those suffering illness
- Care service cost can sabotage the budgets of those with ill health
- Mental health related issues may mean those suffering are unable to work for significant periods of time
Job Options for Those Suffering Ill Health and the Employment Market They Face
Debt problems can pile up quickly as a person adjusts to the onset of ill health. Even those who can find employment, if they have a small income change or an extra demand placed on that income, they could find themselves in a debt problem. Merely being in ill health can also keep people from being able to get a job. Despite strict employment laws in the UK, people suffering from illness many times have difficulties because they are unable to work standard hours.
Debts from ill health can also occur when a there is a change in income due to the loss of a benefit or a partner’s earnings. Those suffering from illness who have a long term dependency on benefits it can be even more difficult to resolve this debt, especially fi they are receiving disability benefits and essentially at the mercy of the government for their income.
In the UK, the problem for some people who struggle with debt due to ill health is that they do not qualify for any Disability Living Allowance (DLA) due to technicalities in the law.
This can be a real struggle for those battling illness, but depending upon your payment history and whether your ill health is prone to be long or short term, you can sometimes get your lender to agree to:
- The lender may agree to reduce your payments over a period of time you both agree to
- The lender may charge interest for a shorter period of time if you have a repayment mortgage instead of having you pay both capital and interest
- The lender may extend your mortgage’s term in order to lower your payments
- The lender may offer you a ‘payment holiday’
Some reasons that people end up in debt can be:
- General financial over commitment
- Poverty
- Loss of work
- Illness
- Breakdown in their relationships
Debt and Illness – What if You Are In Debt Already?
Depending on your track record of making payments in a timely manner, if you have fallen behind then your lender can suggest ways to pay off the arrears gradually along with your usual payments. If you are unable to meet the extra payments you may be able to have them either delayed temporarily or added onto your loan.
You will want to pay as much as you can afford each month because keeping up with your usual payments (even if they are not in full) proves you are committed to repaying what you owe. If you can prove you are committed then your lender is likely going to be more sympathetic to your plight and possibly minimise the arrears charges, as well.
Some anonymous case studies (to protect personal identities in this sensitive aspect of life) regarding debt for those who suffer from ill health are featured below along with some examples of situations that cause this type of debt:
- Debt from ill health affects people’s emotional states by compounding severe stress
- Ill health renders many people unable to work
- Debt can be linked to uncontrollable physical conditions such as epilepsy
- Debt is often linked to suicide
Debt From Epilepsy
This is the case of a woman who bought a car with hire purchase whom we will refer to as Laura. Right after purchasing this car her doctor diagnosed her with epilepsy and Laura could no longer drive. Obviously, she decided she would need to sell this car. Upon informing her finance company of this decision, they told her she would not be able to sell the car privately and that, instead they would sell the car on her behalf then let her know what the remaining balance she owed would be. Later, the company informed Laura that she owed £8,000 plus £3,000 in insurance premiums for policies that could not be cancelled even though they covered risks related to not being able to pay on her loan even though this insurance was to be discharged. As you can see this situation would be incredibly difficult to cope with, not to mention highly unfair, but these are real life situations that people like Laura in the UK face when struggling with debt from ill health.
Ill Health Leaves Man Unable to Work
This case involves a man whom we will call Robert who lived on a very small income and therefore used credit cards in an effort to meet his basic essential needs. This results in £25,000 in unsecured debt on a total of six separate credit cards. Robert became unable to work due to his poor health, becoming more and more stressed by the debt accumulating due to this. He suffered a breakdown specifically tied to his inability to repay on his debt. Robert’s situation is also not unusual in the UK, sadly.
Debt Leads to Emotional Problems
A woman whom we will call Harriet had a hire purchase agreement for a car purchase. After two and a half years she defaulted after becoming temporarily unemployed. Harriet now lives with her parents and has a job once again. After becoming involved in a car accident that resulted in a fatality, Harriet was left with severe emotional trauma. On top of this, her mother suffers from ME. Harriet now must go to court due to defaulting on repayments, but three months after her default, she and her parents were receiving an average of twenty calls per day between 6am and 9pm. This greatly exacerbated Harriet’s emotional problems and her mother’s condition, as well. Once again, situations such as this are not entirely uncommon in the UK.
Debt Stress and Its Ties to Suicide
As extreme as it may seem on the surface, one man who we’ll call Phillip, lost his job because of ill health. He had several low debts that were not high priority. Despite this, Phillip was called frequently from highly aggressive debt collectors until he felt extreme distress and actually attempted suicide. Phillip’s situation represents the emotional state of many people who get in over their heads with debt they never expected to take on in the first place or believe they would be easily able to repay until a drastic, unexpected change in their finances took place..
A Brief List of How Debt Impacts People’s Lives
- Creditors are not always sympathetic about genuine tragedies debtors are faced with
- Some people are unable to cope, feeling as though they are in crisis and their health is subsequently affected
- Family arguments arise over debt and the strain it puts on families
- Some people seek treatment for stress, anxiety and depression related to the strain debt puts on their health
- The stress from debt and ill health leaves some unable to get and hold down jobs
- Debt stress can affect mental health and change people’s lifestyles towards unhealthy habits
If you are facing debt, whether from ill health or not, you owe it to yourself and your family to seek out a solution that can help you. You can learn more about Debt Management Plans or IVAs (Individual Voluntary Agreements) online or, if the situation you face is extremely dire, learn about Bankruptcy.
You need quality advice from an expert professional. Don’t hesitate to get the help you need because no one wants to see you enduring situations such as those described above.
Debt from Ill Health is More Common Than You Think
One of the more common problems that people end up finding themselves in debt due to is ill health. Unfortunately, the stress from debt also ends up being a contributing factor to health problems which creates something of a circle of negative effects.
Some of the common methods of UK debt management which may help solve ill health debt problems are:
1 –
IVA (Individual Voluntary Arrangement)
4 – Bankruptcy
There are so many reasons that people experience debt due to ill health. Here are a few reasons that you might not have thought of:
- In times of illness, finances are often understandably neglected
- A sudden drop in income is not unusual since it may lead to a loss of work
- The cost of transport for treatment can increase debt
- The cost of respite care can also raise debts
- Situations of deteriorating health from illness due to the process of handling debt in the first place can make dealing with the debt even more difficult
- Food required for special diets or medicines needed to treat illness can lead to debt
- Ill health can force clients in physical labour jobs to lose work or stop working entirely
- Making payments on debts can drastically reduce the disposable incomes of those suffering illness
- Care service cost can sabotage the budgets of those with ill health
- Mental health related issues may mean those suffering are unable to work for significant periods of time
Job Options for Those Suffering Ill Health and the Employment Market They Face
Debt problems can pile up quickly as a person adjusts to the onset of ill health. Even those who can find employment, if they have a small income change or an extra demand placed on that income, they could find themselves in a debt problem. Merely being in ill health can also keep people from being able to get a job. Despite strict employment laws in the UK, people suffering from illness many times have difficulties because they are unable to work standard hours.
Debts from ill health can also occur when a there is a change in income due to the loss of a benefit or a partner’s earnings. Those suffering from illness who have a long term dependency on benefits it can be even more difficult to resolve this debt, especially fi they are receiving disability benefits and essentially at the mercy of the government for their income.
In the UK, the problem for some people who struggle with debt due to ill health is that they do not qualify for any Disability Living Allowance (DLA) due to technicalities in the law.
This can be a real struggle for those battling illness, but depending upon your payment history and whether your ill health is prone to be long or short term, you can sometimes get your lender to agree to:
- The lender may agree to reduce your payments over a period of time you both agree to
- The lender may charge interest for a shorter period of time if you have a repayment mortgage instead of having you pay both capital and interest
- The lender may extend your mortgage’s term in order to lower your payments
- The lender may offer you a ‘payment holiday’
Some reasons that people end up in debt can be:
- General financial over commitment
- Poverty
- Loss of work
- Illness
- Breakdown in their relationships
Debt and Illness – What if You Are In Debt Already?
Depending on your track record of making payments in a timely manner, if you have fallen behind then your lender can suggest ways to pay off the arrears gradually along with your usual payments. If you are unable to meet the extra payments you may be able to have them either delayed temporarily or added onto your loan.
You will want to pay as much as you can afford each month because keeping up with your usual payments (even if they are not in full) proves you are committed to repaying what you owe. If you can prove you are committed then your lender is likely going to be more sympathetic to your plight and possibly minimise the arrears charges, as well.
Some anonymous case studies (to protect personal identities in this sensitive aspect of life) regarding debt for those who suffer from ill health are featured below along with some examples of situations that cause this type of debt:
- Debt from ill health affects people’s emotional states by compounding severe stress
- Ill health renders many people unable to work
- Debt can be linked to uncontrollable physical conditions such as epilepsy
- Debt is often linked to suicide
Debt From Epilepsy
This is the case of a woman who bought a car with hire purchase whom we will refer to as Laura. Right after purchasing this car her doctor diagnosed her with epilepsy and Laura could no longer drive. Obviously, she decided she would need to sell this car. Upon informing her finance company of this decision, they told her she would not be able to sell the car privately and that, instead they would sell the car on her behalf then let her know what the remaining balance she owed would be. Later, the company informed Laura that she owed £8,000 plus £3,000 in insurance premiums for policies that could not be cancelled even though they covered risks related to not being able to pay on her loan even though this insurance was to be discharged. As you can see this situation would be incredibly difficult to cope with, not to mention highly unfair, but these are real life situations that people like Laura in the UK face when struggling with debt from ill health.
Ill Health Leaves Man Unable to Work
This case involves a man whom we will call Robert who lived on a very small income and therefore used credit cards in an effort to meet his basic essential needs. This results in £25,000 in unsecured debt on a total of six separate credit cards. Robert became unable to work due to his poor health, becoming more and more stressed by the debt accumulating due to this. He suffered a breakdown specifically tied to his inability to repay on his debt. Robert’s situation is also not unusual in the UK, sadly.
Debt Leads to Emotional Problems
A woman whom we will call Harriet had a hire purchase agreement for a car purchase. After two and a half years she defaulted after becoming temporarily unemployed. Harriet now lives with her parents and has a job once again. After becoming involved in a car accident that resulted in a fatality, Harriet was left with severe emotional trauma. On top of this, her mother suffers from ME. Harriet now must go to court due to defaulting on repayments, but three months after her default, she and her parents were receiving an average of twenty calls per day between 6am and 9pm. This greatly exacerbated Harriet’s emotional problems and her mother’s condition, as well. Once again, situations such as this are not entirely uncommon in the UK.
Debt Stress and Its Ties to Suicide
As extreme as it may seem on the surface, one man who we’ll call Phillip, lost his job because of ill health. He had several low debts that were not high priority. Despite this, Phillip was called frequently from highly aggressive debt collectors until he felt extreme distress and actually attempted suicide. Phillip’s situation represents the emotional state of many people who get in over their heads with debt they never expected to take on in the first place or believe they would be easily able to repay until a drastic, unexpected change in their finances took place..
A Brief List of How Debt Impacts People’s Lives
- Creditors are not always sympathetic about genuine tragedies debtors are faced with
- Some people are unable to cope, feeling as though they are in crisis and their health is subsequently affected
- Family arguments arise over debt and the strain it puts on families
- Some people seek treatment for stress, anxiety and depression related to the strain debt puts on their health
- The stress from debt and ill health leaves some unable to get and hold down jobs
- Debt stress can affect mental health and change people’s lifestyles towards unhealthy habits
If you are facing debt, whether from ill health or not, you owe it to yourself and your family to seek out a solution that can help you. You can learn more about Debt Management Plans or IVAs (Individual Voluntary Agreements) online or, if the situation you face is extremely dire, learn about
Bankruptcy.
You need quality advice from an expert professional. Don’t hesitate to get the help you need because no one wants to see you enduring situations such as those described above.
In this article we will attempt to offer free information about dealing with mail order debt, as well as issues arising from the mail order sector.
In 2006 alone, debt that resulted from mail order purchases in the UK was over £5 billion. That proves exactly how easy it is to find one’s self in financial difficulty as a result of mail order.
It is important that people be aware the mail order industry is not only massive, but extremely efficient in the way it selects customers and the methods with which it advertises to them in order to promote purchases of the many products offered. The UK public is quite keen on convenient shopping so they end up being extremely vulnerable to mail order debt because of this.
When customers shop via mail order the purchases are usually arranged through the catalogue and interest free so the customer pays only in instalments. Because of this, the goods purchased are often significantly more expensive. When products are bought from a mail order catalogue agent, there is often an agreement which allows the customer to cancel within 14 days of signing the agreement without a cancellation notice.
Frequently, there is a 7 day cooling off period after you buy goods or services through a ‘distance sale’. Distance sales include sales conducted by the Internet, mail order or the telephone. However, it is not required that you pay with credit in order to have the 7 day cooling off period. Mail order purchases from catalogues easily lead to debt problems unless you keep current on your weekly payments. Of course, everyone believes they will when they make the purchases, but reality shows us that is not always the case.
Quite a few of the companies who offer mail order will let you make small weekly payments over a set period of time in order to spread the cost out to a more insignificant looking level. Unfortunately, this ends up being a very expensive way to purchase goods if you use credit because beyond the creditors charging you interest, the mail order company will often have their own interest rates added in to the product’s overall price and those rates are rarely low. This means that the debt problems can arise due to the high cost of borrowing on mail order, compounded by any struggle you end up having as a result of falling behind on instalments.
In this article we will attempt to offer free information about dealing with mail order debt, as well as issues arising from the mail order sector.
In 2006 alone, debt that resulted from mail order purchases in the UK was over £5 billion. That proves exactly how easy it is to find one’s self in financial difficulty as a result of mail order.
It is important that people be aware the mail order industry is not only massive, but extremely efficient in the way it selects customers and the methods with which it advertises to them in order to promote purchases of the many products offered. The UK public is quite keen on convenient shopping so they end up being extremely vulnerable to mail order debt because of this.
When customers shop via mail order the purchases are usually arranged through the catalogue and interest free so the customer pays only in instalments. Because of this, the goods purchased are often significantly more expensive. When products are bought from a mail order catalogue agent, there is often an agreement which allows the customer to cancel within 14 days of signing the agreement without a cancellation notice.
Frequently, there is a 7 day cooling off period after you buy goods or services through a ‘distance sale’. Distance sales include sales conducted by the Internet, mail order or the telephone. However, it is not required that you pay with credit in order to have the 7 day cooling off period. Mail order purchases from catalogues easily lead to debt problems unless you keep current on your weekly payments. Of course, everyone believes they will when they make the purchases, but reality shows us that is not always the case.
Quite a few of the companies who offer mail order will let you make small weekly payments over a set period of time in order to spread the cost out to a more insignificant looking level. Unfortunately, this ends up being a very expensive way to purchase goods if you use credit because beyond the creditors charging you interest, the mail order company will often have their own interest rates added in to the product’s overall price and those rates are rarely low. This means that the debt problems can arise due to the high cost of borrowing on mail order, compounded by any struggle you end up having as a result of falling behind on instalments.
If you find yourself struggling with debt from mail order you may want to consider an alternative such as a Debt Management Plan.
Insolvency: A Danger Small Businesses Face
Since so many small businesses operate from very tight budgets, cash flow is an issue they must stay aware of every single day. In this article we will attempt to explain a little bit about Small Business or Sole Trader Debt as it relates to those involved in a small business.
When the assets of your business are worth less than your debts or if you are unable to pay your business debts when they become due, then your business is considered insolvent. Bankrupty or winding up can be the result of failing to pay your small business or sole trader debts quickly enough. While Bankruptcy applies to individuals, sole traders or small businesses that have given personal guarantees for loans, winding up and liquidation applies to companies. Becoming bankrupt often involves restrictions but for individuals whose small businesses or sole traderships have failed through no fault of their own, the situation is somewhat less trying. Most of these individuals are discharged from bankruptcy within a year but their credit ratings can be effected for a longer period of time.
Due to this, the need for small business debt advice is in demand as never before. Plenty of people who are sole traders or run limited companies (LTDs) and small businesses are strongly attached to their businesses and, as a result, have become short sighted to the point that they often fail to recognize the growing debt problem that they have right before their eyes. Some businesses create so much loss that they survive only because their owners use personal credit cards and loans to prop the business up financially. Due to the freedom that running one’s own business offers, many of these folks would rather run up debt being their own boss instead of working for someone else.
In order to find the best solution for your business when facing insolvency, you will want to consider your options. Do you want to head back to employment? Are you looking for a fresh start in business? Do you want to retire or would you like to save your business?
You have plenty of options when you face insolvency.
You can learn about Individual Voluntary Agreements (IVA).
You can learn about Bankruptcy.
You can learn about Debt Management Plans.
Whichever option you choose, your best bet is to look online and find a place that will connect you with people who offer quality advice over the telephone.
Insolvency: A Danger Small Businesses Face
Since so many small businesses operate from very tight budgets, cash flow is an issue they must stay aware of every single day. In this article we will attempt to explain a little bit about Small Business or Sole Trader Debt as it relates to those involved in a small business.
When the assets of your business are worth less than your debts or if you are unable to pay your business debts when they become due, then your business is considered insolvent. Bankruptcy or winding up can be the result of failing to pay your small business or sole trader debts quickly enough. While Bankruptcy applies to individuals, sole traders or small businesses that have given personal guarantees for loans, winding up and liquidation applies to companies. Becoming bankrupt often involves restrictions but for individuals whose small businesses or sole traderships have failed through no fault of their own, the situation is somewhat less trying. Most of these individuals are discharged from bankruptcy within a year but their credit ratings can be effected for a longer period of time.
Due to this, the need for small business debt advice is in demand as never before. Plenty of people who are sole traders or run limited companies (LTDs) and small businesses are strongly attached to their businesses and, as a result, have become short sighted to the point that they often fail to recognize the growing debt problem that they have right before their eyes. Some businesses create so much loss that they survive only because their owners use personal credit cards and loans to prop the business up financially. Due to the freedom that running one’s own business offers, many of these folks would rather run up debt being their own boss instead of working for someone else.
In order to find the best solution for your business when facing insolvency, you will want to consider your options. Do you want to head back to employment? Are you looking for a fresh start in business? Do you want to retire or would you like to save your business?
You have plenty of options when you face insolvency.
You can learn about Individual Voluntary Agreements (IVA).
You can learn about Bankruptcy.
You can learn about Debt Management Plans.
Whichever option you choose, your best bet is to look online and find a place that will connect you with people who offer quality advice over the telephone.
Some tips and general advice on debt collection
If you are ever contacted by a debt collection help organisation, be sure to verify that they are licensed by the office of fair trading. With over 20,000 agencies and bailiffs specialised in UK debt collection, you are may end up having to deal with one of the more aggressive firms out there. These collection firms collect the debts of both private and public companies, so do your homework before dealing with them.
The principles that drove companies offering debt collection services, in a perfect world, would be fair, fast and professionally undertaken debt collection. However, more and more aggressive debt collection practices have led to the emergences of a greater number of complaints and general reports of bad practice in debt collection by consumers. Fortunately, there are decent firms out there who have signed up to “The Better Payment Practice Code” in order to provide genuine debt collection help that isn’t unethical.
To promote a better debt collection help practice within the UK, the Better Payment Practice Group was established. They work to urge all debt collection help firms to take on a responsible attitude when it comes to debtors paying in a timely matter. The Group allows debt collection help companies to sign up to the Better Payment Practice code and agree to maintain the four cornerstones of timely payment:
1. Agreeing to debt collection payment terms at the outset of a deal and sticking to them
2. Explaining debt collection payment procedures to suppliers in an effort to help them, as well
3. Paying bills in accordance with any contract agreed to by the supplier or required by the debt collection laws
4. Notifying suppliers immediately when an invoice is contested while helping to settle debt collection disputes quickly
Here are Some Options for Those in Need of Debt Collection Help
The IVA (Individual Voluntary Agreement)
An IVA is an effective and potent tool which enables to you not only clear your debt, but also to return to a clean financial balance on your accounts once again.
Bankruptcy
Considered an option that must be addressed once a person can no longer pay their debts as they fall due, bankruptcy genrerally allows a first time bankrupt to received their discharge a year after the bankruptcy order’s date.
Debt Management Plan
For those struggling to pay loans, store cards, catalogues or credit cards who want someone to help with sorting out payments and talking to credit cards, a Debt Management Plan may be the perfect solution. If a debtor can pay a single payment that they can afford towards all creditors then this can be an excellent way to cut that debt down over time.
Debt Consolidation Loans
You can consolidate your debt and reduce your payments each month by up to 50% with a proper debt consolidation loan.
Scotland Trust Deeds
For residents of Scotland who are in debt of £8,000 or more, a trust deed (also known as a protected trust deed) offers a legally binding debt repayment agreement. These trust deeds are only available to those residing in Scotland and last a maximum of 3 years. After this, the rest of the debt is written off and you are entirely debt free.
Tips for Dealing with Harassment from Creditors:
* Firstly, write to your creditor and in your communication, outline what you find offensive about the way the company is treating you. Let them know that you are familiar with the terms of the Administration of Justice Act’s Section 40. Ask them to take steps to avoid a repeat of the offensive behaviours that have exhibited towards you.
* Let you creditors know how you prefer to be contacted and ask them to confirm that they are in agreement with your request. If you send the letter during this early stage, you may avoid the trouble of having to take further action against the debt collection help company.
* Inform the creditor that you will consider making a complaint about their tactics under the guidance of the OFT Debt Collect Help Guidance. While it can be difficult to convince the police to prosecute in harassment cases until a more serious offence such such as fraud, blackmail or violence is involved, you should definitely make a complaint about any debt collection to your local council’s trading standards / consumer protection department.
* Your local council should invetigate whether an offence has been committed and wether prosecution is the correct next step. There is a fine of up to £5,000 in the Magistrates Court is a penalty is enforced. Also, a conviction can provide evidence that the creditor should not hold a consumer credit license to carry out debt collection help because they would be deemed no longer a ‘fit and proper person’ for that role. It may be worth considering contacting the Office of Fair Trading directly if the Trading Standards department doesn’t end up acting. While the OFT usually doesn’t take up individual complaints, their Debt Collection Help Enforcement Team does collect information which can be used to take the consumer credit license from abusive creditors. You may also wish to find out if the creditor is a member of a trade association that has a code of practice. If you find out they are a member of such an association you could write there with your complaint.
Additional Options for Debt Collection Help
Perhaps a final straw alternative is pursuing your own prosecution of an unruly creditor in the Magistrates Court. This could be expensive so you need proper legal advice before you decide to do this. A newer service from BT called “Choose to Refuse” may help if you are getting a high volume of calls from a particularly unpleasant creditor. You will need a pin number to key in after they’ve called you. Then, the caller will hear an automated message that states you do not wish to take their call once they ring. The service cost £8.00 per quarter. If your telephone service is through another provider, ask them if they have a similar feature available to you.
The Malicious Communications Act 1988 could be used in your favor, you can refer to it as it deals with letter or articles being sent for the purpose of causing “distress or anxiety.”
If you choose to try for a penalty to the creditor from the Magistrates Court, and it is successful with the creditor being found guilty, they will be fined. You must present a letter or article that was sent to you which contains one or more of these things:
- An indecent or grossly offensive message
- A threat
- Information which is either known or believed to be false by its sender
It is a criminal offence to cause “Harassment, alarm or distress” with intent by utilizing “threatening, abusive or insulting words or behaviour” under the Criminal Justice Act and Public Order Act 1994 Section 4a. However, this only counts as an offence if the action takes place in a public place outside your home. In order to prosecute for this offence, the police need to be contacted immediately after.
It is a criminal offence to harass people and put “people in fear of violence” under the Protection from Harassment Act 1997, also, but the harassment must happen on a minimum of 2 seperate occaisions and the police would need to agree to prosecute.
Some tips and general advice on debt collection
If you are ever contacted by a debt collection help organisation, be sure to verify that they are licensed by the office of fair trading. With over 20,000 agencies and bailiffs specialised in UK debt collection, you are may end up having to deal with one of the more aggressive firms out there. These collection firms collect the debts of both private and public companies, so do your homework before dealing with them.
The principles that drove companies offering debt collection services, in a perfect world, would be fair, fast and professionally undertaken debt collection. However, more and more aggressive debt collection practices have led to the emergences of a greater number of complaints and general reports of bad practice in debt collection by consumers. Fortunately, there are decent firms out there who have signed up to “The Better Payment Practice Code” in order to provide genuine debt collection help that isn’t unethical.
To promote a better debt collection help practice within the UK, the Better Payment Practice Group was established. They work to urge all debt collection help firms to take on a responsible attitude when it comes to debtors paying in a timely matter. The Group allows debt collection help companies to sign up to the Better Payment Practice code and agree to maintain the four cornerstones of timely payment:
1. Agreeing to debt collection payment terms at the outset of a deal and sticking to them
2. Explaining debt collection payment procedures to suppliers in an effort to help them, as well
3. Paying bills in accordance with any contract agreed to by the supplier or required by the debt collection laws
4. Notifying suppliers immediately when an invoice is contested while helping to settle debt collection disputes quickly
Here are Some Options for Those in Need of Debt Collection Help
The IVA (Individual Voluntary Agreement)
An IVA is an effective and potent tool which enables to you not only clear your debt, but also to return to a clean financial balance on your accounts once again.
Bankruptcy
Considered an option that must be addressed once a person can no longer pay their debts as they fall due, bankruptcy genrerally allows a first time bankrupt to received their discharge a year after the bankruptcy order’s date.
Debt Management Plan
For those struggling to pay loans, store cards, catalogues or credit cards who want someone to help with sorting out payments and talking to credit cards, a Debt Management Plan may be the perfect solution. If a debtor can pay a single payment that they can afford towards all creditors then this can be an excellent way to cut that debt down over time.
Debt Consolidation Loans
You can consolidate your debt and reduce your payments each month by up to 50% with a proper debt consolidation loan.
Scotland Trust Deeds
For residents of Scotland who are in debt of £8,000 or more, a trust deed (also known as a protected trust deed) offers a legally binding debt repayment agreement. These trust deeds are only available to those residing in Scotland and last a maximum of 3 years. After this, the rest of the debt is written off and you are entirely debt free.
Tips for Dealing with Harassment from Creditors:
* Firstly, write to your creditor and in your communication, outline what you find offensive about the way the company is treating you. Let them know that you are familiar with the terms of the Administration of Justice Act’s Section 40. Ask them to take steps to avoid a repeat of the offensive behaviours that have exhibited towards you.
* Let you creditors know how you prefer to be contacted and ask them to confirm that they are in agreement with your request. If you send the letter during this early stage, you may avoid the trouble of having to take further action against the debt collection help company.
* Inform the creditor that you will consider making a complaint about their tactics under the guidance of the OFT Debt Collect Help Guidance. While it can be difficult to convince the police to prosecute in harassment cases until a more serious offence such such as fraud, blackmail or violence is involved, you should definitely make a complaint about any debt collection to your local council’s trading standards / consumer protection department.
* Your local council should invetigate whether an offence has been committed and wether prosecution is the correct next step. There is a fine of up to £5,000 in the Magistrates Court is a penalty is enforced. Also, a conviction can provide evidence that the creditor should not hold a consumer credit license to carry out debt collection help because they would be deemed no longer a ‘fit and proper person’ for that role. It may be worth considering contacting the Office of Fair Trading directly if the Trading Standards department doesn’t end up acting. While the OFT usually doesn’t take up individual complaints, their Debt Collection Help Enforcement Team does collect information which can be used to take the consumer credit license from abusive creditors. You may also wish to find out if the creditor is a member of a trade association that has a code of practice. If you find out they are a member of such an association you could write there with your complaint.
Additional Options for Debt Collection Help
Perhaps a final straw alternative is pursuing your own prosecution of an unruly creditor in the Magistrates Court. This could be expensive so you need proper legal advice before you decide to do this. A newer service from BT called “Choose to Refuse” may help if you are getting a high volume of calls from a particularly unpleasant creditor. You will need a pin number to key in after they’ve called you. Then, the caller will hear an automated message that states you do not wish to take their call once they ring. The service cost £8.00 per quarter. If your telephone service is through another provider, ask them if they have a similar feature available to you.
The Malicious Communications Act 1988 could be used in your favor, you can refer to it as it deals with letter or articles being sent for the purpose of causing “distress or anxiety.”
If you choose to try for a penalty to the creditor from the Magistrates Court, and it is successful with the creditor being found guilty, they will be fined. You must present a letter or article that was sent to you which contains one or more of these things:
- An indecent or grossly offensive message
- A threat
- Information which is either known or believed to be false by its sender
It is a criminal offence to cause “Harassment, alarm or distress” with intent by utilizing “threatening, abusive or insulting words or behaviour” under the Criminal Justice Act and Public Order Act 1994 Section 4a. However, this only counts as an offence if the action takes place in a public place outside your home. In order to prosecute for this offence, the police need to be contacted immediately after.
It is a criminal offence to harass people and put “people in fear of violence” under the Protection from Harassment Act 1997, also, but the harassment must happen on a minimum of 2 seperate occaisions and the police would need to agree to prosecute.
Debt can be caused by many problems such as debt incurred as a result of a disability, ill health or injury, even debt from a loss of work or redundancy. During times as difficult as these, many people can find themselves in debt from mortgages, car financing or both personal and secured loans. Other people have mail order debt or find themselves overwhelmed by the payments on their credit cards and loans. As a result, they wind up being chased for late payments.
People also frequently have gambling debts or are feeling the results of a shopping addiction that’s gotten out of control. Many times it’s difficult to find solid information on how to avoid a bankruptct. Often, an Individual Voluntary Arragement (IVA) can be the alternative to a bankruptcy or in some instances, a Debt Management Programme. Regardless of the solution you choose to deal with the difficulties of unmanageable debt, understanding the causes can lead to better insight into debt accumulation and therefore, how to handle the debt that you have or want to incur to move yourself forward.
Here is a brief look into the basics of debt:
According to recent estimates, the average consumer’s debt is a staggering £15,000 while the total amount of credit taken out is a mindblowing £150 million and that figure doesn’t even include mortgages! That is more than three times more debt than was recorded only ten years ago.
Often times, people will assume that a person in debt got there through sheer carelessness or financial wrecklessness, but that’s not always the cause. There are plenty of causes that are not always preventable that can lead to debt being taken on and then spiralling out of control.
The majority of people’s failure to meet debt obligations that they’ve taken on come from changes in their circumstances. Loss of jobs, births, ill health, becoming bereaved; all of these situations can trigger the taking on of debt and wind up devastating individuals and families alike. This can mean that the debtor’s home, goods and services, not to mention liberties can be put at risk if not lost outright.
These triggers for taking on debt can leave people feeling angry and frustrated or even guilty which can have a detrimental effect on both their physical and mental health. Many times, this leads to wear and tear on personal relationships, in the end it often destroys them over time.
As for the common (and not so common) causes of debt, let’s examine these:
* Failure to work out a budget and ending up forgetting about non-standard purchases such as Christmas gifts or school expense.
* One of the primary causes is simply ignoring the debt problem for too long.
* An unrealistic view of basic necessities like food, clothing, utilities and fuel can harm budget planning and lead to debt.
* Failure to inform creditors early on once difficult financial circumstances have arisen. A reasonable view can be expected from the lender if they are truly reputable and know about your circumstances.
* Ignoring letters and reminders of default notices constitutes a failure to maintain you agreements with creditors and that failure can cost you significantly.
* Avoiding court hearings will work against you.
* Taking on even more debt to pay off existing debt increases your outgoings while delaying the actual solution to your problems.
* Failing to prioritize rent or mortgage payments means that you may risk losing your home.
Debt can be caused by many problems such as debt incurred as a result of a disability, ill health or injury, even debt from a loss of work or redundancy. During times as difficult as these, many people can find themselves in debt from mortgages, car financing or both personal and secured loans. Other people have mail order debt or find themselves overwhelmed by the payments on their credit cards and loans. As a result, they wind up being chased for late payments.
People also frequently have gambling debts or are feeling the results of a shopping addiction that’s gotten out of control. Many times it’s difficult to find solid information on how to avoid a bankruptcy. Often, an Individual Voluntary Arrangement (IVA) can be the alternative to a bankruptcy or in some instances, a Debt Management Programme. Regardless of the solution you choose to deal with the difficulties of unmanageable debt, understanding the causes can lead to better insight into debt accumulation and therefore, how to handle the debt that you have or want to incur to move yourself forward.
Here is a brief look into the basics of debt:
According to recent estimates, the average consumer’s debt is a staggering £15,000 while the total amount of credit taken out is a mindblowing £150 million and that figure doesn’t even include mortgages! That is more than three times more debt than was recorded only ten years ago.
Often times, people will assume that a person in debt got there through sheer carelessness or financial wrecklessness, but that’s not always the cause. There are plenty of causes that are not always preventable that can lead to debt being taken on and then spiralling out of control.
The majority of people’s failure to meet debt obligations that they’ve taken on come from changes in their circumstances. Loss of jobs, births, ill health, becoming bereaved; all of these situations can trigger the taking on of debt and wind up devastating individuals and families alike. This can mean that the debtor’s home, goods and services, not to mention liberties can be put at risk if not lost outright.
These triggers for taking on debt can leave people feeling angry and frustrated or even guilty which can have a detrimental effect on both their physical and mental health. Many times, this leads to wear and tear on personal relationships, in the end it often destroys them over time.
As for the common (and not so common) causes of debt, let’s examine these:
* Failure to work out a budget and ending up forgetting about non-standard purchases such as Christmas gifts or school expense.
* One of the primary causes is simply ignoring the debt problem for too long.
* An unrealistic view of basic necessities like food, clothing, utilities and fuel can harm budget planning and lead to debt.
* Failure to inform creditors early on once difficult financial circumstances have arisen. A reasonable view can be expected from the lender if they are truly reputable and know about your circumstances.
* Ignoring letters and reminders of default notices constitutes a failure to maintain you agreements with creditors and that failure can cost you significantly.
* Avoiding court hearings will work against you.
* Taking on even more debt to pay off existing debt increases your outgoings while delaying the actual solution to your problems.
* Failing to prioritize rent or mortgage payments means that you may risk losing your home.
Let’s use an example to show how an IVA reduces one’s debt. This is a real world example we will use as illustration for how an IVA can help an individual:
A 60 year old woman whom we’ll call Mrs. Grace is supporting her husband who is ill. She has been their only income earner for over 20 years. When she got her IVA in late May, she slashed her monthly payments on her debt by over 60%.
Initially she had taken out a personal loan in an effort to make ends meet. Since she found getting credit to be very easy, she soon had a £53,000 debt on a bank loan, nearly a dozen credit cards, three store cards and her council tax. Once her IVA was approved, her interest was frozen and her Insolvency Practitioner convinced her creditors to accept £350 a month for 60 months. The creditors wrote off £32,000 of her debt, reducing her monthly payment by over £600.
This is only one example of the kind of financial relief an IVA can provide.
Let’s use an example to show how an IVA reduces one’s debt. This is a real world example we will use as illustration for how an IVA can help an individual:
A 60 year old woman whom we’ll call Mrs. Grace is supporting her husband who is ill. She has been their only income earner for over 20 years. When she got her IVA in late May, she slashed her monthly payments on her debt by over 60%.
Initially she had taken out a personal loan in an effort to make ends meet. Since she found getting credit to be very easy, she soon had a £53,000 debt on a bank loan, nearly a dozen credit cards, three store cards and her council tax. Once her IVA was approved, her interest was frozen and her Insolvency Practitioner convinced her creditors to accept £350 a month for 60 months. The creditors wrote off £32,000 of her debt, reducing her monthly payment by over £600.
This is only one example of the kind of financial relief an IVA can provide.
There’s a good reason that many people are frightened to take on debt. We’re told daily through the media and even from friends or family how we need to avoid debt, that we need to worry over how we will pay it back. This is certainly sound advice to be aware of those things, but there ARE times when taking on debt can not only be beneficial, but actually crucial. In fact, there are situations that can arise in both your business and personal life where under funding could cause extensive problems.
Consider these situations:
Buying a House
In the UK, the the largest transaction most people will ever be involved in throughout the course of their life is the purchase of a house. It’s true that the significant debt of tens or hundreds of thousands of pounds can be intimidating, if you’re under funded for the purchase, that will cause even more difficulties.
Quite often people will try to chop into their budget so that they don’t need as large of a mortgage only to find out that they could have avoided trouble in the future by taking on a larger mortgage up front.
Running Your Own Business
This is a crucial area for concern when it comes to under funding because so many small business people are loathe to take on debt. Of course, it is not always the best solution to take on a substantial debt for your business, in many situations you will need to make certain you’re properly funded in order to support your business operating costs.
In the beginning stages of your business, it is common to have higher costs flowing out than money streaming in. That means that it’s vital to keep a sensible perspective regarding debt in order to make sure that you not only cover your overhead and daily expenses, but also the spending you will need to do for advertising and promoting the growth of your operation.
Balancing Your Personal Finances
Yet again, personal finances are another area of money management where people have a tendency to view debt in a way that’s helpful in the short term, but not as helpful in terms of long term financial health due to the limitations it poses. While most UK citizens will have debts such as credit cards, loans or store cards, there are times when a windfall occurs. Often, people will rush to pay off all debts at once in order to reduce their short term debt.
Even though this appears to be reasonable at the moment, it ends up with many people being stuck in a situation where they end up returning to their bank for a loan once they’re short on funds again. If you instead choose to put that windfall into an interest earning savings account and hold to the repayment of the debt you already have, then you can have that money later for an emergency or to use once you’ve cleared your debts in the normal way.
In Conclusion
In the UK, many people are afraid of debt and for good reason, however balancing this with the understanding that proper management of borrowing can help ease your life can lead to a more sensible approach to managing your money. Debt properly utilized can help business dealings as well as personal situations. It is never appropriate to take on debt without solid reasoning, but at the same time you can use it as a tool to leverage yourself further along in life.
Remember, those people who are scared of debt quite frequently find themselves in situations that have gotten out of control for lack of taking action to fix them when it was possible. This leads to a long term situation where IVAs or bankruptcy are the only way out. If you have proper respect
There’s a good reason that many people are frightened to take on debt. We’re told daily through the media and even from friends or family how we need to avoid debt, that we need to worry over how we will pay it back. This is certainly sound advice to be aware of those things, but there ARE times when taking on debt can not only be beneficial, but actually crucial. In fact, there are situations that can arise in both your business and personal life where under funding could cause extensive problems.
Consider these situations:
Buying a House
In the UK, the the largest transaction most people will ever be involved in throughout the course of their life is the purchase of a house. It’s true that the significant debt of tens or hundreds of thousands of pounds can be intimidating, if you’re under funded for the purchase, that will cause even more difficulties.
Quite often people will try to chop into their budget so that they don’t need as large of a mortgage only to find out that they could have avoided trouble in the future by taking on a larger mortgage up front.
Running Your Own Business
This is a crucial area for concern when it comes to under funding because so many small business people are loathe to take on debt. Of course, it is not always the best solution to take on a substantial debt for your business, in many situations you will need to make certain you’re properly funded in order to support your business operating costs.
In the beginning stages of your business, it is common to have higher costs flowing out than money streaming in. That means that it’s vital to keep a sensible perspective regarding debt in order to make sure that you not only cover your overhead and daily expenses, but also the spending you will need to do for advertising and promoting the growth of your operation.
Balancing Your Personal Finances
Yet again, personal finances are another area of money management where people have a tendency to view debt in a way that’s helpful in the short term, but not as helpful in terms of long term financial health due to the limitations it poses. While most UK citizens will have debts such as credit cards, loans or store cards, there are times when a windfall occurs. Often, people will rush to pay off all debts at once in order to reduce their short term debt.
Even though this appears to be reasonable at the moment, it ends up with many people being stuck in a situation where they end up returning to their bank for a loan once they’re short on funds again. If you instead choose to put that windfall into an interest earning savings account and hold to the repayment of the debt you already have, then you can have that money later for an emergency or to use once you’ve cleared your debts in the normal way.
In Conclusion
In the UK, many people are afraid of debt and for good reason, however balancing this with the understanding that proper management of borrowing can help ease your life can lead to a more sensible approach to managing your money. Debt properly utilized can help business dealings as well as personal situations. It is never appropriate to take on debt without solid reasoning, but at the same time you can use it as a tool to leverage yourself further along in life.
Remember, those people who are scared of debt quite frequently find themselves in situations that have gotten out of control for lack of taking action to fix them when it was possible. This leads to a long term situation where IVAs or bankruptcy are the only way out. If you have proper respect
