One Advice | Bankruptcy, IVA & Debt News

Almost five million loan and credit card applications were rejected during the last six months of 2008, according to research published by MoneyExpert.com. 56% of Brits who have applied for either a loan or a credit card have been denied.

Those who are most likely to be refused either a loan or a credit card are younger adults aged 25 to 34, as almost a quarter (21%) failed to get accepted during this period.

MoneyExpert advise that you should not apply for multiple credit cards and that those who have a poor credit history may not be accepted for market leading offers, so should be careful before applying.

Almost half of those who acquired Christmas debt last year will not be able to afford to repay the full amount within one month, according to new research by Sainsbury’s Finance.

The report claims that 56% of Brits, the equivalent to 23.15 million people, will struggle to clear their Christmas debts by the end of January. 14% could still be hanging onto Christmas debt over the summer months, as they believe that it will take them four – six months to repay this debt.

Donald MacLeod, head of cards at Sainsbury’s, said: “A year is a particularly long time to still be paying for festive debt so if you think it’s going to take you a while its worth taking stock and coming up with a plan for managing it.”

Are you struggling with credit card debt after Christmas? You are not alone! Let One Advice help make your credit card debt more affordable to you. To find out more, fill in the Quick Enquiry form to the right hand side of this page.

A British person or business is declared bankrupt every five minutes, according to reports by Credit Action.

After over a decade of easy credit, the UK is paying the ultimate price; as well as someone being declared bankrupt every five minutes, every day 104 homes are repossessed.

The report also shows that the average household debt now stands at £9,500 (excluding mortgages). Credit Action report that we are in a debt denial and many of those who are seeking debt help do not realise the true extent of their debt levels.

If you are struggling with debt then don’t worry as there could be help out there, such as a debt management plan or repossession help. It is important that you seek debt advice as soon as possible before things continue to spiral out of control.

The credit crunch means that many Brits are getting savvy when it comes to finding areas where they can save money, and have saved over £2.7billion last year, according to research by uSwitch.

It seems that cutting out luxuries and selling possessions is the only way that many can make ends meet. Over half of UK adults have turned to websites such as eBay to make extra money, and a third have sold some of their belongings at car boot sales.

More than three-quarters of us have avoided debt during the credit crunch times by no longer eating out regularly, and almost 20 million of us have cut back on trips to the pub. These penny-pinching techniques means that the average UK adult is saving £50 a month, and a third are pleased to be saving up to £100.

Ann Robinson, from consumer website uSwitch, comments: “Consumers are rising to the challenge by tightening their purse strings as every penny really does count… This is a phenomenal amount of money, and highlights what can be done when consumers switch products to save money – be it financial or supermarket brands.”

The number of repossessions and the number of mortgage arrears are set to soar throughout 2009, according to a prediction by the Council of Mortgage Lenders (CML),

They believe that almost half a million households will end up with mortgage arrears of three months or more. This is a staggering figure as it almost doubles the last years predicted figures of 210,000 households who are struggling with mortgage arrears.

CML director general Michael Coogan said:”Repayment problems will worsen against the backdrop of rising unemployment but lenders and government are working to try to reduce the negative impact on borrowers.”

Do you have mortgage arrears? It is never too late to get help and One Advice can halt repossession proceedings without the need for you to sell your home. Contact our expert repossessions team on 0800 048 1752.

If your debts are spiralling out of control and you feel as though you cannot afford to make minimum payments to your creditors, it can sometimes seem that consolidating your debts makes sense. Debt Consolidation allows you to make a single lower payment to your creditors, as you effectively pay off your debts so you are left with just one creditor. But the question is, does debt consolidation work?

According to research published by Moneysupermarket, almost two-thirds of those who take out a loan to consolidate their debts continue to borrow more during the lifetime of the loan.

It seems that consolidating debt is not just a one-time occurance, as almost half (44%) of those questioned said that they would consider consolidating their debt again, showing that even those who have the best intentions of clearing their debt are finding that getting into debt is unavoidable. (more…)

One in seven Brits have been unable to save a single penny throughout the whole of 2008, according to the results of a poll carried our by Alliance & Leicester (A&L). Although half of those surveyed regret that they could not contribute towards any savings, the other half were unconcerned about their poor savings habit.

A third of those who responded said that they have had to dip into their savings at some point last year so that they could afford their cost of living.

Hetal Parmar, manager for savings at A&L, said: “What’s surprising is the number of people who still haven’t put any money aside and aren’t concerned about it.”

Apparently the era of cheap loans has come to an end, according to Tim Moss, head of loans at moneysupermarket.com.

Those who are looking for a loan can now expect to pay 8.46%, which is a considerable gap between Britain’s base interest rate, which was at 3% when this research was conducted. Only two months prior, the average loan and base rate were much closer with just a 2.92% difference.

In reference to the research, Moss commented: “Loans are not the cheap form of borrowing they once were.”

Can I Get a Cheap Loan?

Now that there has been a decline in the number of cheap loan available, and the number of 0% credit card deals are declining, what should you do if you are facing repayment problems with your current debt and cannot get a debt consolidation loan?

It is advisable to note that there are no-loan alternatives when it comes to dealing with your debts, such as a debt management plan. This will reduce your monthly payments into an amount which is much more affordable.

For further information and to find an alternative to a cheap loan, please contact the One Advice team directly on 0800 048 1752.

2008 saw the biggest drop in house prices for a calendar year on record, according to Halifax. They report that last year saw a fall of 16.2% in house prices.

The average house price is now £159,799, which brings these prices back to August 2004 levels. These figures are coupled with further statistics from Halifax which show that the number of mortgage approvals hit a record low last November, with just 27,000 loans agreed.

The bank’s chief economist, Martin Ellis, comments: “Continuing pressures on incomes and the negative impact of the dislocation of financial markets on the availability of mortgage finance are expected to exert further downward pressure on the market over the coming months.”

Bad budgeting and increased costs of living means that over half (64%) of all Brits suffer from what Abbey Banking term “payday mayday”, meaning they run out of money an average of five days before the arrival of their next pay cheque.

Those suffering from “payday mayday” are more likely to be found in the North of the UK, where 67% admit that they regularly run out of cash by the end of the month. This information should heed a warning, as those who find that they have no spare income at the end of the month are more likely to be getting into levels of unmanageable debt, as they turn to their credit cards or store cards in order to make ends meet.

Steve Shore, director of banking at Abbey, finds it worrying that “a staggeringly high number of people regularly fail to budget effectively each month and end up running out of cash before their next pay cheque”.

Have you been careless with your Christmas credit card spending? If so then you could be facing credit card debt for another seven years. According to research by moneysupermarket.com, if you have spent the usual festive spend of £376 with your credit card and you only make the minimum payment, then you will not become debt free until 2016!

Peter Harrison from the site recommends that your New Year Resolution should be tackling this debt as soon as possible: “They should try to transfer existing debt to a zero per cent balance transfer card and ensure they pay off this Christmas’s spending before they start on next year’s.”

Last year saw over 5,000 petitions made for bankruptcy for homeowners in England and Wales by town halls due to council tax debt, which led to more than 1,000 people being declared bankrupt and having their assets seized.

The figures, which have been obtained under Freedom of Information legislation by the Liberal Democrats, show that households which originally owed just a few hundred pounds in council tax debt are being hit with debts reaching tens of thousands of pounds due as a result of the bankruptcy action taken against them.

Regarding those who had been made bankrupt by council tax debt, Julia Goldsworthy, the Liberal Democrats local government spokesman, said: “Public bodies should do everything they can to ensure that bankruptcy is avoided where possible.”

That time of year has come around again where we can leave behind our bad habits of the past and look forward to the year ahead. Many of us have made New Year resolutions, and it seems the top one is to get our debt management issues under control, so we can beat the credit credit crunch and any looming recession problems.

According to research by Gocompare.com, almost half of us (43%) made our resolutions before seeing in the start of 2009. 60% of us plan to tackle our finances in the new year by paying off our debts and tightening our purse strings. Of this percentage, almost half are drawing up plans to get out of debt or reduce their credit card debts and outstanding loan amounts.

Hayley Parsons, chief executive at Gocompare.com, commented: “Nearly half of those surveyed plan to make New Year’s resolutions in 2009. And, in the current financial climate it’s not surprising that money matters top the list.”