British Debtors Facing £10 Per Month for 3 Years

Many in the United Kingdom have sharply conflicting ideas on just what is appropriate for those with debts today. For some, experiences such as working out at the gym or enjoying a meal out are absolutely not okay for those with debts. To these of more extreme perspectives, debtors should be allowed only enough money, after seeking a bankruptcy, to cover their bills for their household or expenditures which are an absolute necessity.

The situation in Britain is sharply divided into polar opposites of social values. There are those who believe that debtors’ prisons ought to be revived as an appropriate result for those who find themselves owing money. Others believe that those who have suffered debt deserve compassion in most cases. Obviously, opinions in the UK run the gamut. As this debate continues, as it most likely always will, there are new rules headed to the UK which say those who are considering bankruptcy will also need to take into account that their disposable income will be handed over to their creditors for 3 consecutive years – allowing them to keep back none of it. This differs sharply from the past when perhaps half of disposable income those with a bankruptcy earned would end up in the hands of creditors.

These new rules, some critics say, were rather craftily put into effect and offer what may call ‘three miserable years’ to those who suffer debts. Serious stress and real psychological turmoil are what critics say those who undergo this 3 year experience are at risk for. Pints at the pub, cigarettes, movies at the theater and other activities will be out the window for those allowed £10 per month in disposable income. While sources in the UK media have reported that Insolvency Service officials have told them that they do not find the approach to be ‘unreasonable’. Rather, those officials believe they are establishing a balance of penalty without being overly harsh.

The new rules for those in bankruptcy will mean that they make regular payments to their creditors under agreements know as IPA’s which stands for Income Payments Agreements. Yes, a bankruptcy will only last for a year, but the new IPA’s will last for 36 months. Those who try to dodge will be faces with IPO’s: court issued Income Payments Orders that force the money to be given over. Mortgages, utility bills and rent are considered to be the types of expenses deemed necessities, but the rest? That will go to creditors – not just half of that disposal income like before.

The result is, critics say, unfair to most involved. Those in vulnerable situations will be up against sizable portions of their spare cash being removed with nothing to fall back on. Yet those who earn more, pay higher amounts. Both ends of the spectrum get their own special form of suffering, say those opposed to the new guidelines.

Many feel it may be wiser to consider debt management if you struggle with debt now. Alternatively, an IVA could offer a workable solution. Either way you slice it, bankruptcy is looking to be an ever tougher path in the UK today.

Big Changes for Disabled and Elder Care Coming in Britain

The Government of the United Kingdom has recently announced that it will be making changes to the way that care is provided for the elderly and those with disabilities, shifting the perspective of social care from being something to be delivered by the state to a ‘responsibility’ for ‘everyone’, according to recent reports in the UK media. This perception shift will involve allowing those who receive such care to have larger personal budgets, more control over how these budgets are spent and also, increased support for those who give care, focusing on volunteers.

Growing demand from the burgeoning population of British citizens entering their later years, says the independent commission in charge of restructuring social care, has led councils to struggle to provide home help care services as well as placements for carers. The Government says it does not want to try to get ‘care on the cheap’ and is interested in making the new system function better and relieve problems within the current system.

The new policy would not go into effect until 2013 and currently, councils are trying to prepare to stretch out their funds as far as they can to try and make ends meet. According to the Association of Directors of Adult Social Services’ president Richard Jones, the funding challenge is quite severe so people are needed to help get involved to form a more nurturing network to provide care that involves the person, families and the state working together. He went on to say that many people believe social care is simply given free and this has hurt the state’s ability to offer enough on their own.

Over the upcoming 4 years, an additional £400 million would be given to allow carers to have breaks to help make life easier for those cared for and also £3 million is planned to fund the voluntary services sector. Currently, social care spending in the UK is £16.6 billion per year, half of the spending that councils have in their budgets. This applies especially to those who have less than £23,500 in assets who need help covering their care.

Since care can often lead those who need it from solid financial lives to massive debt, the extra £2 billion for councils is seen as a real boon to those in the UK needing assistance with daily life.

Single Parents in UK Should Get Job When Child is One Some Say

Parents who are raising a child alone in the United Kingdom have now been told that that they may well lose a portion of their state benefits once the baby reaches a year old if they do not begin to prepare to get a job. New sanctions that are set to spur those not currently looking for work to start working will target single parents without jobs who have a child between the ages of 1 and 5 years old. Word of this came from a recent White Paper that has drawn fire from charity groups that focus on children and those which look after single mothers.

The Work and Pensions Secretary, Iain Duncan Smith, outlined this set of plans to rock the benefits – one that critics say is the sharpest set of changes in more than 6 decades. He told the press that parents with children between ages 1 and 5 will need to keep in touch with Jobcentres and discuss a plan of action for what will happen once their child reaches school age. He went on to say that he views the impact on these parents, most of whom are single mothers, as very low and that 40% of the benefits would be the maximum taken, half of that for not attending an interview regarding working and another for missing further appointments on that issue. When the child is 5 years old, if they had not yet found work or were looking for it in an active way, then there would be more penalties applied against them.

Those unwilling to take a job offered to them who would also not apply to do community service work would loose their Jobseeker’s allowance for 3 years. Smith made the statement that those who cooperate would be happy and nothing would happen to them, but that it was not about ‘hammering people’.

What many have pointed out is that the Plan is actually aimed at targeting people who are involved in a ‘black economy’ where £140 billion in benefits each year go to those who are working on the side and not paying taxes. Fraud, also, is costing the system over £5 per year right now.

Critics have accused the new plan of creating a climate of fear and that it targets the poorest children in Britain, most of whom have parents that want work but find it difficult to get a job that still allows them to care for the children even after they are in school. Critics say that there is no protection for parents that says they will not be punished if they cannot find childcare and that this in and of itself, they find, is inexcusable lack of foresight. They cite long term damage to society followed by long term economic damage as being their chief reason for opposing the sanctions.

In what comes as perhaps the most shocking aspect of the benefits system changes, claimants who get emergency hardship payments may find these being turned into loans. When these claimants do not meet requirements set by authorities, they would then owe the Government for their benefits as a means of sanction.

Many Enraged by Plan to Force Work for Welfare

Recent plans have been unveiled that would be designed to force people who have been unemployed for a long period of time to do manual labour for which they would not be paid. The welfare campaigners of Scotland were quick to condemn the plan, citing outrage at its purpose with so many in Scotland already facing stiff debts and Trust Deeds being the primary way many are able to overcome such situations in a fair way. This plan, say campaigners, is flat out unfair to both those working to repay their debts and those unable to find work who would not be paid for their labour.

Those opposed to the pan have stated clearly that it would essentially harness the labour of the poor to fix an economic crisis that they did not help to create. Iain Duncan Smith, the Work and Pensions Secretary, intends this week to reveal the compulsory work programmes which last 4 weeks and involve tasks such as gardening and picking up debris. These tasks will be for those without jobs who have been judged to be lacking in work ethic.

Danny Alexander, Smith’s colleague in the Cabinet, also stated that the Work Activity placements would be used against those claimants who did not take full advantage of employment seeking support and wielded as a sanction. Opponents of the plan, some 40 organisations such as Children 1st, Oxfam, Scottish Council for Voluntary Organisations, Scottish Churches and others allied under the Scottish Campaign for Welfare Reform, have cited that these plans will make it even more difficult for those sanctioned to find actual jobs.

According to the Child Poverty Action Group’s John Dickie, the problem with the proposed plan is that it does not treat people with dignity and fails to help them find a way towards work that will actually pay them. As it involves punishing them it is distracting from the problem that Dickie says is actually at the heart of what the plan is a reaction to: a lack of jobs that can sustain an individual, much less a family. Without child care available and with widespread discrimination, the real jobs with real wages are just not so easy to find as those who support the plan are claiming, say critics.

Critics also cited the jobs as violation of minimum wage legislation and went on to say that making people work for 30 hours or more while not getting paid was essentially insult to injury and would perpetuate the problem. Smith’s approach is to have people experience the habits and routines of working life that he believes they have forgotten about. Thousands of claimants would be targeted for this 30 hour work week because they are believed to be fine with not working or are suspected of having a job they do not declare. Those who fail to comply would lose their £65 per week Jobseeker’s Allowance for 3 straight months.

Smith was quoted as saying that those in the programme would need to understand the message that they need to ‘play ball or it’s going to get difficult’. Critics argue that the plan fails to see that it is lack of jobs which pay enough to help people survive which are the issue as opposed to a lack of work ethic.

Desparate Britons Seek to Sell Kidneys to Pay Debts

In a sign that economic times are definitely getting far rougher that previously believed, undercover reporters have exposed a shocking trade that financially strapped UK citizens are turning to in an effort to pay down their debt.

The reports show that a variety of individuals from different walks of life have found themselves so far in debt that they they are unsure where to turn and so they have sought out potential buyers for their own internal organs. One taxi driver from Lancashire advertised his kidney on the internet, seeking to raise £25,000 to pay off his credit card bills and mortgage as well as buy himself a new kitchen. In addition, the man seeks £1,200 for lost wages that the operation would cost him plus £1,000 to cover his hotel expenses because the transplant surgery would have to take place in a foreign country where regulations are far less strict.

For his part, the taxi driver explained he was less motivated by financial gain as by the thought that he might be able to save another person’s life with his kidney. Having already been approached by a man from Pakistan whom he felt was not a person in need, but rather a organ broker, the man wanted to meet the person to whom the kidney would be going before submitting to the potentially dangerous operation.

Those who undergo such operations risk an assortment of potential health problems not from lack of a kidney, but from the operation itself. Infections and blood-related issues are the most common killers of those who undergo even a successful organ donation surgery.

Another man, a mental health professional in his mid 20’s, sought £25,000 for his kidney in the hopes that it would help him pay down a debt and make a better life for himself and his son. His debt stands at £20,000 and is held by people whom the man claims are not of the type that anyone would want to be in debt with. Since he sees no other option, this is the route he has chosen to go.

The reason no British surgeon would ever agree to perform such an operation is due to the fact that the mere offer to sell one’s organs is a violation of the Human Tissue Act with a fine and a penalty of up to three years in jail, even if the surgery itself is not set to be performed on British soil.

A global underground organ trade is certainly growing, but in the UK options such as an IVA or even Bankruptcy are far better alternatives in terms of their effectiveness and legality.

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 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 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 Ill Health