One Advice | Bankruptcy, IVA & Debt News

More and more people are suffering from personal debt worries, as the amount of credit card debt continues to rise across the country. You may be finding it a struggle to pay off, as your payments as dwarfed by the interest and charges which are added. But there are simple tips that you can follow which should help reduce personal debt levels and you can look forward to a debt free future:

1: Stop Spending on Your Credit or Store Cards – Even if you are making more than the minimum payments to your debt, your debt level will never decrease if you continue to make purchases on the card. Try and leave your credit cards or store cards at home so you are not tempted to get into further levels of personal debt.

2: Pay Off More – One of the worst things you can do when trying to reduce personal debt levels is to just pay off the minimum payment. To reduce personal debt more quickly you need to pay off more on a monthly basis. Work out an affordable budget and throw any spare cash towards reducing personal debts.

Easy ways to save money include cutting down on takeaways, eating-out less and not being tempted by special offers at the supermarket. You could save yourself over hundreds of pounds a month if you cut out these unnecessary purchases, and you can put this money towards your goal of reducing personal debts.

3: Get Help to Reduce Personal Debt – if your personal debt is unaffordable to you then it could be advisable to seek professional debt advice from a debt solutions company, such as One Advice. We could help reduce personal debt costs by consolidating your repayments into one lower monthly payment. This will reduce the monthly amount that you have to pay towards your personal debts and the exact amount that you pay is dependant on your personal debts and circumstances.

Contact One Advice today and speak to one of our professional personal debts advisors who can advise you on a debt solution.

The credit crunch has resulted in a greater importance for the value of money, according to research by GfK NOP on the behalf of the Charities Aid Foundation (CAF). 80% of Brits now think more carefully about their spending due to these times.

Apparently 39% of us are spending less money when going out and a similar percentage have cut back on holidays to help avoid the need for debt advice. We are also looking to spending much more wisely with almost a quarter shopping in less expensive stores or charity retailers, and 14% buying goods from ethical companies.

John Low, CAF chief executive, said: “It is heartening to see that some good is coming out of these very difficult times.”

Money-off vouchers are helping us to avoid debt and save money at a time when many of us are looking to reduce debt and take control of our finances.

In a recent study by uSwitch.com, over half of us (53%) have recently used a discount coupon to pay for a restaurant meal, whilst 15% have cut restaurant bills down even further by not paying a service charge, saving a total of £18 million in the process.

It seems we have become so reliant on these vouchers that almost three-quarters of us loath to pay full price for any item.

Personal finance manager at uSwitch.com, Louise Bond, said: “The stigma attached to using discount vouchers or even picking up small change off the street is also a thing of the past. No one knows how long the recession will last and battening down the financial hatches in the short term will ensure that consumers are best positioned to weather the recession in the long run.”

Thousands of British workers are aiming to avoid getting into further debt by seeking additional employment. Due to the rising costs of living and to keep tabs a better tab on their own debt management, the number of full-time workers registering to due freelance work has increased by a third, according to PeoplePerHour.com.

The websites founder, Xenios Thrasyvouloum, believes that the current economic climate is leading people are seek additional employment so that they can help to avoid the ongoing effects of the credit crunch: “On regular salaries, skilled professionals are struggling to make ends meet. It’s little wonder increasing numbers of them are harnessing their experience and skills to offer freelance services outside office hours.”

Lloyds TSB have released research revealing the plight of 13.5 million recession novices, as the effects of the credit crunch continue to shine.

According to the study, this will be the first recession that one in four of British adults will have experienced in their adult life. These recession novices are far more optimistic and less prepared to change their lifestyles, in comparison to recession veterans.

Many recession veterans are taking tighter control over their debt management, with 66% believing that they will survive the credit crunch as they do not reply on credit. Yet recession novices are less prepared to take steps to secure their financial future with only a fifth admitting that they are now more frugal.

Corinne Sweet, psychologist and author commented: “Recession novices will be feeling the greatest shock, and worrying about how to maintain their lifestyles while paying off debts, while those that have lived through it before will probably cope better, reverting to old methods of survival.”

We all know how important it is to think save money, it todays economic climate it makes sense to avoid debt and save your money. But with the cost of living rising all the time; what are the easiest and most effectively simple ways to save?

This is part 1, which will offer you 3 tips about Simple Ways to Save.

Check back next week for part two, which will offer you a wealth of additional money saving ideas.

Simple Ways to Save: Tips 1-3

1: Save Your Change: Remember the saying “look after the pennies and the pounds will take care of themselves”? This is so true, and is the perfect mantra to have if you are looking at saving cash and improving your debt management skills.

Everytime you pay with cash, save your change. Dependant on your debt issues, you could use to either save the copper, silver or both! Keep this money in a separate jar at home and you will be surprised at how quickly these small sums of money add up! (more…)

700,000 people are excluded from official British insolvency figures, according to research by R3 who are the trade body for Insolvency Professionals. The reason is that these ‘hidden debtors’ are not officially classed as insolvent, as Debt Management Plans are an informal creditor agreement.

If Debt Management Plan consumers were added onto official insolvency figures (which includes IVA and Bankruptcy orders), the number of insolvent individuals reaches close to one million. By the end of 2008, there were 190,000 cases of bankruptcy and IVAs, but this is dwarfed by the 700,000 debt management plans.

R3 President, Peter Sargent, comments:  “The official figures are only the tip of the iceberg in counting the UK’s insolvent individuals. If the government wants to take an accurate picture of our debt problem, DMPs (Debt Management Plans) should be included in the official figures.”

Council Tax is classed as a priority debt, therefore it is very important that you keep make the required payment as it falls due.

It seems that more of us are getting into council tax debt, and the Liberal Democrats released reports which shows that, in 2008, over a million people were summoned to court for non-payment of council tax and local councils filed for bankruptcy against over 1,700 people who were suffering from council tax arrears.

How Debt Management Can Help with Council Tax Arrears

Now whilst these statistics are very scary, debt management could help you get your debts under control meaning that you will have additional income to repay your council tax arrears.

If you are getting into arrears with your council tax because you also have high and unaffordable levels of non-priority bills, such as store card or credit card debt, a Debt Management Plan could lower your payments to your non-priority debts which will make your council tax much more affordable.

A Debt Management Plan only requires you to pay what is affordable. We will deal with your non-priority creditors on your behalf and negotiate with them so that they will accept you making lower monthly payments to your debt, and some additionally freeze interest and charges.

We can offer you a wealth of information on a number of debt management techniques and, if a debt management plan is not suitable for you, you may benefit from another one of our debt solutions such as an IVA.

Future generations are more likely to live debt free lives as they understand more about debt management issues. According to new research, carried out by NatWest’s Moneysense Panel, over two thirds of 12-19 year-olds know more about financial issues than a year ago and 86% are keeping track of their money.

Although keeping track of finances is important from an early age to get potential debt levels under control, many are unrealistic in their future grasp of debt. 39% believe they expect to leave university with debts of less than £10,000, whereas the actual figure is about £12,700. 58% also believe that they will be able to own their own home by the age of 25.

Head of NatWest MoneySense for Schools Maxine Norris commented: “This will be the first time these young people live through an economic downturn, which may encourage greater realism when it comes to their future financial expectations.”

The credit crunch has turned us into a nation of bargain hunters and, according to research by Abbey, these bargains are allowing us to avoid debt and take control our their finances by saving us an average of £1,746 a year.

These savings are to be made in all areas of life, such as food, travel and entertainment, and more than a third of the UK save £139 on financial products over the course of the year through switching to better deals.

Callum Gibson, head of credit cards at Abbey, commented: “At a time when people’s finances are becoming ever more stretched, it’s not surprising that Britons are becoming more astute about how they shop and are prepared to shop around and economise to make their money go further.”

The average Brit would not be able to afford any more hikes in energy bills, following claims that energy bills could soar as much as 40% before 2009.

86% of those surveyed by moneysupermarket.com said that they would not be able to afford any increases, and 40% admit that the credit crunch has already left them feeling stretched.

Paul Schofield, head of utilities at the site, said: “At a time when people are tightening their belts the prospect of energy price hikes is a daunting one – especially as only one in seven of us could afford more expensive bills.”

Paying off debt and becoming debt free has soared ahead of saving, according to new research by unbiased.co.uk.

According to the research, we are aiming to become debt free by repaying £1.76 for every pound saved by the end of 2008. In total we repaid £38.6 billion of non-mortgage debt, which is the first time during the eight-year study that more debt has been paid off than saved.

Speaking about the findings, David Elms, Chief Executive of Unbiased.co.uk, comments: “The financial turmoil which hit Britain last summer prompted a dramatic retreat from savings in favour of starting to pay down personal debt.”

The recession has meant a tighter budget for many households, so it is increasingly important that we save money on our outgoings. Rising living costs and unemployment combined with a lack of available credit is likely to continue, so finding ways to save money this year is going to become more of a necessity.

Finding ways to cut back on spending and stretching out your income should help you tackle the credit crunch much more effectively and simple changes could see you being hundreds of pounds better off. Below offer just three simple ways to save money this year, but please feel free to comment and add yours to the list:

1: Switch your Shopping Habits – The amount that we spend on our weekly shopping always seems to be increasing and food is one necessity that we cannot live without. But, as a country, we also waste a lot of food which in turns means that we waste a lot of money!

One way to save money this year could be through planning your weekly shop in advance. Plan your family meals and hit the supermarket with a list of everything you need and don’t stray from it. The special offers are designed to be tempting, so it is very easy to spend more than you planned. Alternatively shop online where you may be less tempted by special offers.

2: Find a Cheaper Insurance Provider – We all should have insurance for our home and it is essential that we have car insurance. But you may find that these payments take up a large chunk of your income. One way to save money is to find a cheaper insurance provider.

When it is time to renew, make sure that you take the time to compare prices from a range of providers and you may be surprised at how simple it is to save money. Just make sure that the level of the cover is what you expect. Your current provider may also price match any genuine quote, so this really is a good thing to do and an easy way to save money which could go towards paying off your credit card debt.

3: Find a Debt Solution – If you have a number of unsecured debts which you are struggling to pay, you may find that this could be the best time to find a debt solution. There are a number of ways that you can deal with your debts. For example, you might find that consolidating your payments into one lower monthly payment through a Debt Management Plan will help your be able to control your other financial commitments, much as a mortgage, much more efficiently.

Remember that there are a number of debt solutions on the market, some which could stretch your monthly income further by reducing the amount that you have to pay per month. Although this means it will take you longer to repay your debts, you should find that your monthly payments are no longer a struggle.

Contact One Advice today for free debt advice about our range of debt solutions – Fill in the Quick Enquiry to the right of this page.