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Students in Scotland Borrowing to Frightening Levels

A shocking set of statistics have come out of Scotland recently, with numbers indicating that 70% of Scottish students are spending more than the 10 hours per week working to pay for their studies. This is beyond the amount recommended for students due to the time they need for their studying. More than half of these students have borrowed from banks or credit card companies according to a study that questioned over 6,000 students on behalf of the National Union of Students in Scotland (NUS).

While the group who conducted the study is suggesting that the government take steps to fix the problem, the Scottish Government is claiming that it has already taken such steps. For those who are in debt in Scotland, a Scottish Trust Deed may be their primary option to get themselves back on track and many students are finding that turning to this option could help, but still the debt levels are quite high.

According to the survey’s results, 52% of the debt students took on came from commercial lenders such as banks or credit card companies, 67% owed their friends or family members, students loans were given to 61% of those surveyed and over a third of these students owed money to all three of the lending sources above. What may have enabled this amount of lending is the fact that the Student Loans Company was offering some of the lowest interest rates in history but the interest rates of other lending sources remained high in comparison. This can lead to confusion over the the interest rates of various loans taken out over time.

The survey reported that nearly half of graduates of universities, over a third of postgraduate students and a third of college students were most concerned with commerical loans out of all their debt sources. The NUS is calling for to raise the amount possible for student loans while offering more to particularly impoverished students. They are also seeking a ‘Summer Holiday’ grant they believe will help students during the break period in their schooling.

Welcoming the input of the NUS, the Scottish government and will consider the additional information in their future examinations of funding student education.

In total, the survey itself polled students from 18 different institutions of higher learning and more than 20 further education colleges.

Lower Income Customers Face Hardship from Barclaycard Interest Hike

The largest credit card company in the UK is raising the interest rates it charges to customers already struggling to repay their debts. The move is clearly controversial since it stands to reason that it would cause genuine hardship for those consumers already stumbling beneath heavy debt loads and punishing interest in addition to their debts that they must pay. An increase in the number of consumers entering into highly effective debt solutions such as Individual Voluntary Arrangements and Debt Management Plans is expected as a result for those consumers who do not wish to undergo a Bankruptcy.

The irony is that the Barclaycard decision comes out in direct contrast to what the Government has asked lenders in regards to playing fair with those in debt, particularly credit card customers. The fear is that now those Barclaycard customers who are being further punished for debt will be increasinly more vulnerable to unscrupulous lenders that prey on the financially unfortunate.

The decision comes from Barclaycard as part of their new policy of “risk-based pricing” that is designed to charge the poor and customers who are in debt pay more than those with greater financial ability to repay any credit they take out. This policy is spreading throughout the entire credit industry and means that a person with a good income who borrows £1,000-£3,000 will pay 15.9% in interest whereas a person who is considered “high risk” would end up paying 20% for the exact same amount being borrowed.

Nearly all the UK’s primary banks have been raising interest rates on credit cards in 2009 even as the Bank of England reduced the base rate to only 0.5 percent. Along with these moves, the credit card lenders have added other lesser noticed fees such as fees for using one’s card overseas.

The extremely difficult financial circumstances that these interest rate hikes put customers into have led to an alarming number of ‘debt suicides’ where UK citizens have taken their own lives in response to the overwhelming stress of debt.

The sitation is society wide and means that many people will find it increasingly difficult to take out credit on reasonable terms when they are at a lower income level. Those who are caught in the “risk-based pricing” scheme will see much more difficult credit arrangements coming their way. The financial crisis ends up punishing those at the bottom who already struggle with debt by making debt even more expensive to these people who may need it more than those with better incomes who do not actually need the credit in order to make ends meet.

According to what’s been said by the banks recently, the main focus will be on those who have experienced financial changes such as job loss or poor health leading to loss of work. These people will be targeted for potential interest rate increases since they are viewed as the highest risk for entering default.

Barclaycard does claim that its ‘early assistance’ scheme has been designed to help those who are heading towards default after income changes and that since the program’s early days this March, it has helped 11,500 cardholders, but the overall results will take time to see.

Liability for Debts and the Limitation Act

What the Limitation Act is:

The Limitation Act 1980 established the rules on the length of time a creditor has to take action (such as a lawsuit) against an individual for a debt the creditor is owed. Depending upon the type of debt the individual has, the time limits are different. In this article we want to explain when you can use the Limitation Act for unsecured credit debts.

Unsecured credit debt are debts that include bank loans, building society personal loans, catalogues, finance company loans, store cards, credit cards and other debt along these lines. In some situations people have a debt with a typical unsecured creditor and they have not heard from the creditor in quite some time. Perhaps they have even moved address or even assumed the debt had been written off.

If a letter arrives completely unexpectedly from that creditor or a debt collection agency who is telling you to make a payment you can sometimes argue that the creditor has run out of time or is ’statute barred’ from taking you to court for the debt.

This can sometimes work of if:

- The creditor has not yet obtained a judgement against you in court

and

- You or another person who owes money, if it is a debt taken out in joint names, have failed to make payments on the debt during the last six years

and

- The creditor has no written statement from you in the last six years, such as a letter, which states you owe on that debt