Bankruptcy Advice Guide
If you are considering bankruptcy then it makes sense that you would seek out as much bankruptcy advice as possible before you take the plunge. There are a number of long-term bankruptcy effects which cannot be avoided, so it is important that you are fully informed about the process of bankruptcy and what it means to your personal, professional and financial standing.
This is why One Advice have put together a Bankruptcy Advice Guide. This will be continually updated and contains a resource of bankruptcy advice.
Latest additions to the Bankruptcy Advice Guide include:
- Bankruptcy/IVA – There are a number of debt solutions on the market, and it can often be tricky to work out which one is best for you, as each one has their own set of benefits and considerations. This article aims to help you to understand the distinct differences between Bankruptcy and IVA, and what this means to you…
- Restrictions During Bankruptcy – One of the most important things to consider before you declare bankruptcy, are what type of bankruptcy restrictions will be in place… (more…)
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Debt Advice Campaign for Scotland
A national debt helpline is being put in place to help Scots who are having problems with their debt management issues. Cash machines will begin to show adverts which promote the telephone line.
This aim of this debt advice campaign is aims to offer confidential and free debt advice for those who are suffering with financial problems due to the credit crunch and an increased cost of living.
The Scotland debt advice campaign has been backed with £382,000 of Scottish Government funding. Nicola Sturgeon, Deputy First Minister, believes this debt advice scheme is important as those who can no longer afford their debt need to face up to their financial problems. “Families across Scotland are feeling the pressure financially, with increases in food prices, rising bills and mortgage and lending uncertainty all adding to the headache.”
Debt Advice: Scotland - If you are a Scottish resident and need advice about your debt, One Advice are here to help. You may find that you are eligible for a Trust Deed where you can write off your unaffordable debt in as little as 36 months. For free advice and further information about your debt worries, contact the One Advice team of debt advisors on 0800 019 5870.
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Christmas Debt 2007 Left Unpaid
The credit crunch means that more people are putting their Christmas plans on hold and reducing the amount that they spend over the festive season. But many should be thinking about their spending habits over last Christmas, as one in four people are still repaying this debt.
According to rice website Savebuckets.com, 40% of Brits used credit cards or unsecured borrowing in order to afford Christmas 2007, but only 29% of these have managed to repay this debt during January. Those who are most at risk of falling into debt are people in their 30s, as 47% of this age group borrowed money last year.
James Wenger, of Savebuckets.com, commented: “With a rising number of Britons still paying for last Christmas it raises alarm bells over how the pattern will continue into 2009 as the economic turmoil continues.”
If you are worried about your Christmas and having problems with your debt management issues, One Advice have put together a guide on how to keep within a realistic Christmas Budget.
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Debt Management for Priority Debt
If you have multiple debts which you are struggling to make payments to, it is important that you know which ones to tackle first, as the creditor which may shout the loudest should not always be the one which you pay. Debt Management for Prority Debt is one of the most important things.
Priority debts are debts which have serious consequences if they are not paid. For example, your mortgage payment classes as a mortgage payment as failure to pay means that you could risk losing your home to repossession. As you can see, it is important that priority debts are given this priority status over your other debts, as it is essential that you keep a roof over your head and electicity in your home.
If you are struggling to afford your priority debts because you are paying too much to your unsecured debt, including credit cards, store cards and overdrafts, One Advice can help assist you with debt management which will help you to meet your priority debt payment.
Priority Debt Guide
One Advice have put together a priority debt guide which goes through all the key aspects of ways to deal with your priority debt. Here you will find a wealth of information about a range of priority debts, including: (more…)
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Negative Equity Fears for Millions
Almost 1.2 million UK homeowners could be facing negative equity if house prices continue to fall at the rate they are currently doing.
UK mortgage borrowers are facing the risk of negative equity and higher mortgage payments. The Bank of England’s Financial Stability Report (FSR) reports one in 10 homeowners could be left with their mortgage debt being more than the value of the home, due to the decrease in house prices.
About 3% of homeowners are currently in negative equity. But if house prices drop by another 15% from their record high in October 2007, this figure could sharply increase. Those who are most at risk of negative equity are first-time buyers who have recently purchased their first home.
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IVA Information
IVA stands for Individual Voluntary Arrangement. It is a legally binding contract between the debtor and the creditor. They were introduced in 1986 as part of government legislation, which offers those who are struggling with large amount of debt with a bankruptcy alternative.
With an IVA, you are legally protected from any further action from your creditors. You commit to making set monthly payments for an average of 60 months, at the end of this period you will be free from any unpaid debt.
You only make monthly payments which are affordable to you after your living expenses have been deducted. This should relieve any pressure that you may have in paying your priority debts.
An IVA is best suited to those who have a stable income, multiple creditors and over £12,000 worth of debt. If you fit the IVA criteria, bar the debt level, then you may be suited to a debt management plan. Like an IVA it allows you to make reduced payments to your creditors and interest and charges on the debt may be frozen. Although it is an informal agreement and does not offer the benefit to have any amount of your debt written off. (more…)
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Bank Overdraft Charges Rise
The average interest charge on authorised bank account has rose by an average of 1.35% in the past four months, according to finance comparison website MoneyExpert.
This is putting a squeeze on borrowers meaning that many may have to seek debt help and advice in order to manage their finances. The authorised overdraft interest rate now stands at 13.06%, a rise from 11.71% in June. MoneyExpert predict that these figures are a sign of things to come, as banks may fight the court ruling regarding excessive penalty fees following the long-running Office of Fair Trading case against major banks.
Director Sean Gardener commented: “The banks are understandably concerned about the risk of bad debts and are tightening up lending rules. For customers with debts the message is clear. They need to work to reduce debts or ensure that they get the best possible rate for their borrowings and then work to reduce debt.
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Mortgage Payments Priority for Brits
Mortgage payments and fuel bills top the list of things which Brits are most concerned about, according to research published by Abbey.
In the time of the credit crunch, it is no surprise that 41% of those surveyed admit that paying their monthly bills is their most important priority. Keeping tabs on their debt management issues was viewed more important than having a good work/life balance or having a pleasant home.
Phil Cliff, director of Abbey Mortgages, commented that: “Concerns about the economy are definitely being reflected in the UKs spending habits as Brits would rather put money into their home and ensure they can pay their monthly energy and mortgage bills.”
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Student Budget Needed to Avoid Debt
Students are being urged to set up and maintain a budget whilst studying at university, in order for them to maintain control of their finances and avoid having to seek debt advice.
The need for a student budget has been strengthened after reports from GE Money found that 11% of UK students are unsure about their personal financial status. Half of students manage to accumulate unsecured debt of over £5,000, yet only 24% believe that they will manage to clear their debts within five year of graduating.
A spokesman for GE Money commented: “It is important to set budgets and stick to them. University should be a fun positive experience, however, all too often, it can turn out to be a financial minefield.”
Simple Student Budget Plan
With these student debt figures in mind, it makes sense for a student to take steps to avoid getting themselves in unmanageable levels of debt. (more…)
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Food Costs Rises by £740
The cost of our weekly shopping trolley is on the rise, which could be to the sum of £740 a year. The price of basic food prices has increased by almost three times the official rate of inflation during the last year.
This research comes from website mysupermarket.co.uk, which has monitored the prices for 24 basic food items, including milk, bread, eggs, fruit and vegetables. There has been an average increase of almost 15%, meaning than an additional £740 a year being added onto a family’s shopping bill, which could lead to many needing help to manage their debt levels.
Company director, Johnny Stern, said: “Shoppers are still having to bear the brunt of a large price increase in the overall staples basket compared to one year ago.”
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Minimum Credit Card Payment “fixation”
Unsecured debt levels are on the increase due to a “fixation” about minimum repayment levels, according to new research by the University of Warwick.
Many credit card customers are influenced by the minimum repayment amount which is stated on their credit card bills. This influences the amount which is paid, as many opt to make the minimum payment instead. This could be great news for credit card companies though, as they could receive almost double the amount of interest because of this trend.
Psychology researcher Dr Neil Stewart said: “Virtually all credit card statements include minimum payments. But this consumer safeguard has an unexpected negative consequence: minimum payments distort the behaviour of many customers in a way that increases interest charges and increases the duration of their debt.”
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How to Stop Repossession
If you are at risk of repossession, because you have mortgage arrears, you may feel as if there are no alternatives left. But if you know how to stop repossession then you can take back control of your financial circumstances.
It is important that, if you haven’t done so already, that you get in touch with your mortgage lender as soon as you start struggling with your finances. Explain to them how your financial circumstances have changed and how you plan to make your mortgage payments in the future.
If you think that you cannot make payments to your mortgage, then you might be tempted to hand back your keys to the lender. Always try and sell the home yourself, as mortgage lenders will charge you for the service, and they often get a lower asking price as the property will be left empty.
Free Advice on How to Stop Repossession
One Advice have put together a guide which contains more information about how to deal with your arrears, click the following link to access this information: Repossession and Arrears.
There you will find a wealth of information, including: (more…)
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Christmas Budget Slashed by £1 Billion
Christmas comes just once a year, but it seems as though it has come at the wrong time for many, as the majority of Britain seems to be heading deeper into the effects of the credit crunch.
MoneySupermarket.com reveal figures which show that Brits plan on spending £1 billion less on Christmas presents this year. The average person will now just spend £376 on gifts, a drop of £17 per person from 2007. Although the credit crunch doesn’t seem to changing everyone’s plans, as consumers in Scotland plan on spending an average of £460 on gifts.
Rob Barnes, head of shopping at moneysupermarket.com, said: “Consumers are feeling the pinch this year… People will be looking for bargains and shopping around for the best deals will be a key feature of this Christmas.”
Christmas Spending on a Budget
1: Stagger your Christmas Spending- The best way to deal with your Christmas budget could be to stagger your spending. You may still have a couple of pay-days before Christmas, so try and buy a few presents out of each wage. This should take the pressure off any last-minute Christmas spending, which could totally blow your budget.
2: Be frugal with your Christmas Budget - There are so many ways which you can stretch your Christmas money management skills, it just may mean you spending a little extra time doing your Christmas shopping. A great way to shop is online, as there are a number of different websites where you can compare the prices of many gifts.
3: Be a Secret Santa - A great way to keep your christmas spending low is to start a Secret Santa scheme, you can do this at work, with your friends or your family. It means that each of you only has to buy one gift for each Secret Santa member, this also gives you the added benefit of worrying what to buy for just one person, instead of many fussy individuals.
4: Sort of your Debts- If you are having problems with your debts then you might find it is almost impossible to handle Christmas Spending chores, no matter what your budget. If you find that you are struggling meeting repayments to your creditors, then One Advice could help you to reduce this amount. We offer a number of leading debt solutions, including:
- Debt Management Plans - A Debt Management Plan will allow you to make repayments to your creditors in one low monthly payment at a cost you can realistically afford. This is best suited to those who have debts under £12,000.
- IVA - If you have debts over £12,000 over three or more creditors, then you could be suitable for an IVA. An IVA allows you to make affordable monthly payments to your creditors for an average period of 60 months, at the end of this you will become debt free.
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Simple Ways to Save: Part 3
Did you enjoy reading Part 1 and Part 2 in our Simple Ways to Save series?
We hope that you are putting your new money management skills to good use and are already feeling the benefit of how simple changes to your spending habits can really add up and help you to control any debt management issues.
Read below for the final 3 simple ways to save tips, and remember to share your money saving tips with readers by commenting on this post.
Simple Ways to Save: Tips 7-9
7: Bring your lunch to work: Buying your lunch every single week day can be an expensive habit, and you could find that you are spending £5 a day. This could add up to a staggering £1,300 – just think about how you could dent your debt with this amount or think about your house deposit.
Buying in bulk from you local supermarket means that you can really save yourself some serious cash, and there is no reason why your home-made sandwich should not taste as good as the pre-packaged one from the shop. Whilst on that subject… (more…)
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High Recession Risk for Young People
Young people are apparently more likely to face the pitfalls of recession and the credit crunch, in comparison to older generations according to a study by the Chartered Insurance Institute (CII).
The CII report that the IPOD generation - Insecure, Pressured, Over-taxed and Debt-ridden - will suffer the effects of recession due to being both overprotected and isolated from financial services, as financial advice and products is not tailored to an IPOD’s needs.
This term covers young adults between the ages of 18 to 24. Over half have up to £10,000 of unsecured debts and a fith owe even more than this, meaning that many of them may need debt help in order to effectively manage their finances.
Trevor Matthews, CII president, said: “What is striking in this report is that Ipods possess the highest potential for appreciating the good value of advice and yet are not benefiting from it.”
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Credit Crunch Increases Lottery Sales
Penny-pinching Brits are turning to the lottery to make their fortune in the time of the credit crunch, as figures reveal a £181million increase in National Lottery ticket sales during the past 6 months alone.
In a bid to avoid debt, 70% of British adults now play the lottery on a regular basis, spending an average of £3 a week on scratch card and lottery tickets, even though there is statistically only a 1 in 14 million chance of becoming a winner.
Even though the chances of winning the lottery are slim, players can be pleased to know that over £350 million has been raised towards the Olympic Lottery Distribution Fund. Camelot Group chief executive Dianne Thompson commented that: “The National Lottery has now created more than 2,200 millionaires and has raised over £22bn for the good causes.”
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Recession Proof your Income
The economic downturn is at risk of catching many Brits by surprise, and we have been urged to recession proof our income. Fool.co.uk have released figures which show that 70% of the employed have less than 20% of their monthly income remaining after all living expenses have been paid for.
This could lead to many seeking debt help and advice, especially as unemployment has been predicted to rise by 200,000 by the end of 2008. Many of us need to take better control of our finances, especially as one in eight people are currently spending more than they earn.
David Kuo, head of personal finance at Fool.co.uk, said: “We are only in the early stages of a recession so we have yet to feel the full impact of the economic downturn. Consequently, it is important to tackle our finances head on now before it is too late to do anything about it.
Tips to Recession Proof Your Income
1: Save More- With the risk of unemployment on the increase, it is essential that those who are in employment begin to save more of their salary. Challenge yourself to save a certain amount each month and put this in a high-interest savings account.
2: Spend Less - To compliment the above tip to recession proof your income, it is essential that you are spending less on a monthly basis. This might mean cutting back on treats, such as glossy magazines or the morning shop-bought coffee.
3: Examine Your Debt - You might find that points one and two are almost impossible as you have a high percentage of your outcome going out on your unsecured debt. If you are struggling and have began missing payments then it is essential that you seek expert help ASAP. One Advice are a leading debt solutions provider and we can help you reduce your outgoings to your debt.
Take the 1 Minute Debt Test to see which debt solution is right for you.
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Global Credit Crunch: Online Searches
The global credit crunch has has a great impact in the way that we spend our money, and it has even changed what we are searching for. Which? have reported Google statistics showing that more Brits are searching for credit crunch terms such as vouchers, budget meals and sewing classes in order to help their debt management skills.
It seems that more of us are looking reduce holiday debt, as there has been a decrease in city break searches by 20% and homes in Spain by 28%.
Although perhaps one good thing about this economic downturn is that more of us are actively searching for ways to keep our savings secure. Which? report that an increasing number of us are wanting to keep better grip on our savings, as the search for safe savings is up by 900%, compared to 2007.
Elan Dekel, product manager at Google, said: “This is a fascinating snapshot into how Britons are reacting to the current economic situation.”
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Simple Ways to Save: Part 2
Did you check our all of our Part 1 in the One Advice Simple Ways to Save series? In part 2 you will learn another three simple ways to save your money, and there is also a part three to look forward to next week!
Can you think of simple ways that you are saving money?
Share your money saving tips with readers, just comment on this post.
Simple Ways to Save: Tips 4-6
4: Don’t Skip Breakfast: Not only are people who eat breakfast slimmer (according to a well know cereal brand), eating breakfast could also be saving pounds on your waistline as well as your pocket.
Eating breakfast means that you won’t be tempted by a naughty and expensive treat later on in the day, such as the costly shop bought coffee or ready-prepared sandwiches. If you really do not have time for breakfast, then prepare a fruit salad the night before to snack on when you arrive at work. (more…)
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Loan Interest Rates up to 36.9%
The credit crunch is hurting the pocket of many Brits as personal loan interest rates continue to rise.
This increase could add hundreds of pounds to monthly repayments, and this news comes at the same time that the cost of fixed-rate mortgages and credit cards continues to rise sharply.
According to uSwitch, the average cost of a Black Horse loan has risen to 36.9% in the past month. Before the increase a borrower could expect to pay £632 on a £2,000 loan over a two year repayment period. But as the interest rate figure has risen by nine points, the same loan today would have an interest figure of almost £860.
There is further bad news for those who are looking for a loan to deal with their debt management issues, as uSwitch also reveal that other lenders have increased their interest rates. Even though there has been a decrease in the Bank of England base rate, a total of eight providers have put up their rates by an average of 7.85%.
Personal Finance Manager, Louise Bond said: ‘Personal loan “best buys” are changing every day which demonstrates just how unpredictable and volatile the current climate really is.’
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Utility Bills Causes Concern for Renters
Eight out of ten renters worried about their utility bills, according to a new report by the Department of Communities and Local Government.
The average UK household will pay the equivalent of 20% of their rent on their utility bills. But many private renters feel as though their landlord doesn’t care about energy efficiency, which is leading the renter to forfeit the inflated bill.
The Government is set for change as this month sees the start of Energy Performance Certificates (EPC) required for all new tenancies after 1st October. The EPC means that landlords will have to provide their tenants with information about energy efficiency and carbon emissions, in a simple rating of A-G.
Communities minister Iain Wright commented that this new move should be “welcomed by tenants who are looking for better value and more energy efficient rental properties, as well as landlords who are, more than ever, keen to attract responsible and committed tenants.”
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Confusion about Credit Card Withdrawal
Confused British credit card holders seem to be unaware about the true costs of making a credit card withdrawal, meaning that we are paying £161 million on interest for these transactions alone.
uSwitch.com report that many may need some form of debt help, due to withdrawing cash to pay for costs such as mortgages, loans and household bills, while over 700,000 make cash withdrawals so they can afford to make their credit card payments.
69% of consumers are unaware of the high interest rate and charges being added when making these withdrawals. The average annual percentage rate now stands at 29.97%, up from 21.22% in 2005. This rise in interest rate should be cause for alarm, especially as 16% of the population are getting cash through credit card withdrawal.
Personal finance manager at uSwitch.com, Louise Bond, commented:”People who use a credit card to withdraw cash may already be struggling under the burden of debt and are forced to resort to this method of borrowing to make ends meet.”
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Car Running Costs up 19%
The credit crunch means that many people are reevaluating their outgoings, and many may be shocked to know that the annual running costs for an average family car have now soared to £2,435, this represents a 19% increase since 2007.
This may mean that more families will struggle to manage their debt as, according to the RAC Cost Index, average car running costs have seen a year-on-year increase of £277. Average weekly costs are now at the equivalent of £47 a week or 20.3p a mile.
Although many people rely on their vehicles, 36% of drivers are considering buying a car which will be cheaper to run than their present model.
Adrian Tink, the RAC motoring strategist commented: “With the credit crunch hitting motorists hard in their pocket, we encourage UK drivers now more than ever to take all potential financial implications of car running costs into account to better manage their budgets.”
3 Ways to Reduce Car Running Costs
If you are looking for simple ways to save money, then these following tips should help you reduce your car running costs: (more…)
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Negative Equity Fears for 2 Million
Falling house prices and an unstable housing market means that up to 2 million borrowers could be facing negative equity by 2010, according to predictions by analysts Standard & Poor.
There are currently 335,000 home owners who owe more on the secured debts against their home, such as a mortgage, over the value of the property. This figure is four times that of just four months ago.
These latest figures coincide with new reports that certain mortgage lenders are aggressively pushing forward with repossession orders, even for homeowners who are just a few hundred pounds behind on their mortgage payments.
The CML (Council of Mortgage Lenders) report that almost 19,000 homes were repossessed in the first half of 2008 alone. They predict that this figure will hit 26,000 in the second half of the year.
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16 Million Utility Consumers are Over-Charged
New reports suggest that one in three gas and electricity consumers are being over-charged due to their utility bills being based on an inaccurate estimate.
According to Consumer Focus, estimated bills are based on the latest charges, although they relate to energy which was used when the prices were at a lower rate. A third of all bills are based on this estimating scheme, meaning that 16 million people could be paying more than they should do.
You can check if your utility bills are based on estimated readings by checking your bill for the letter “E”, which means that the cost is estimated. Spokesperson for the group, Robert Hammond, said: “It’s in the interest of consumers to make sure bills are based on an actual meter reading.”
Representative for the power firms, The Energy Retail Association, deny any profiteering from this and urge customers to send regular meter readings.