The IVA Guide

Worst company failure rate for 16 years, 57% higher than a year ago, plus gloom as personal bankruptcies soar

2009-06-05T03:28:00.000-07:00

Company failures reached a 16-year high in the first three months of 2009, official figures showed yesterday.

There were 5,011 company liquidations in England and Wales between January and March – the highest since the second quarter of 1993 on a non-seasonally adjusted basis.

The gloomy figures were 57% higher than a year ago and a 13% jump on the last three months of 2008.

It is the fifth successive quarter of rising corporate insolvency.

Further, a record 19,062 people were declared bankrupt on a seasonally adjusted basis during the first three months of the year, 23.4% more than in the same period of 2008, the Insolvency Service said.

The number of people who went insolvent, which includes both bankruptcies and those taking out an Individual Voluntary Arrangement (IVA), rose to a new high of 29,774.

Number of people declaring themselves bankrupt rises

2009-05-28T03:54:00.000-07:00

THE number of people declaring themselves bankrupt is continuing to rise, new figures show.

The statistics, released by the Ministry of Justice yesterday, show a 38% increase in people in Wales petitioning for their own bankruptcy, as opposed to being forced into bankruptcy by a creditor, to 893 cases in the first quarter of 2009.

Some of the biggest increases in cases in Wales were seen in:

Bridgend, where the number of cases rose by 117% to 63;

Blackwood, where cases rose by 84% to 46;

Newport, an increase of 34% to 94 cases; and

Pontypridd, an increase of 23% to 53 cases.

In the three months ended March 31 there was an increase of 33% in the number of people making themselves bankrupt in England and Wales compared to the same quarter of last year.

At the same time there was also an increase in the use of individual voluntary arrangements (IVAs) which rose 11% compared to last year.

The figures reveal that 17,606 people successfully petitioned to bankrupt themselves and 9,807 agreed an IVA in the quarter January to March 2009.

John Bangham, director of personal insolvency for KPMG’s Cardiff office, said: “This means that a total of 27,413 people took the potentially life-changing step of placing themselves into personal insolvency: this proportion of people choosing to ‘jump before they were pushed’ represents an incredible 91% of all personal insolvencies.

“Bankruptcies where the debtor makes a positive decision to go bankrupt have increased by 33% since the same period last year to 17,606. At the same time, the number of IVAs, where the debtor seeks to come to a deal with the creditors, has risen by 11% to 9,807, although they fell by 6% when compared to the last quarter of 2008.

For more, please visit: Number of people declaring themselves bankrupt rises

IVA For People With Bankruptcy - Help to Perk Up Your Financial Status

2009-05-24T02:24:00.000-07:00

Introduction:

Are you under financial troubles with unaffordable debts and a really hard situation come up in front of you? Is bankruptcy acted as a big spot in your financial standing and you are finding difficult to live with that spot? This scheme is basically stands individual voluntary agreement which avoids the trauma of bankruptcy. It is a confidential advice which will be provided to the borrower by the lender to settle down their debt traps without any rigid or tedious formalities.

Advantages:

Looking for suitable debt solution? You are at the right place as IVA for people with bankruptcy will help you to provide apt advice. IVA bankruptcy is a legal agreement between the borrower and the lenders which give you suitable advice and give you variety of schemes to opt for so that you will be able to pay off your debt as per your affordability and easiness. It is an easy help which provide a sign of relief to the applicant and revive his expenses. You can revitalize your financial situation with the help of this scheme.

To get applied with this service, you can avail it with online mode with the comfort of your home or office having a desktop integrated with internet. You don't need to face any hassle of standing in the long queues outside the lender's place. However, IVA is the best solution to prevent your property from liquidation. No hassle being faced with having spots in your credit reports. No collateral is being demanded to place as it is an agreement which comprised of a particular scheme or plan to pay off your debts with reasonable installments moving away from the debt tapping situation with ease.

Who can qualify?

Are you a UK resident?
Are you having a legal age of eighteen years or more?
Have a valid and active checking account?
A regular employed earning steady income in your hand?

Hurray! As you are aptly eligible to avail this prominent service without any restrictions and obligations at all!

For more about this author please visit: http://EzineArticles.com/?expert=Jennifer_Morva

Homeowners Now Taking Out Over Half Of All IVAs

2009-05-21T02:25:00.000-07:00

Commenting in response to Q1 2009 figures announced by the Insolvency Service, Stuart Bungay, Director of Financial Services, TDX Group said: "According to our data the numbers of homeowners resorting to IVA continues to rise, representing around 51% of all IVAs compared to 34% at the beginning of 2008.

“This is largely due to a combination of house price depression and fewer options for refinancing, leaving more homeowners with no choice but to enter formal insolvency arrangements. These people, should they fail to maintain their IVA, could end up increasing repossession figures.

“TDX Group analysis indicates that of all IVAs activated around 40% are never completed and that 15% stop paying in the first year.

"We also believe a growing number of people are finding themselves without any means to pay their debts, and are consequently unable to meet the criteria required by either an IVA or a Debt Management Plan.

"Unfortunately there is very little data on this population and as a result, we may all be underestimating the amount of people who will take out a Debt Relief Order. Introduced last month, DROs are designed to provide a cheap, accessible insolvency option for individuals with relatively low levels of debt but little or no prospect of repaying.

“Estimates for take up of DROs in the first year currently range from 14,000 to 150,000. If the top estimate is correct, this could equate to around £1.8 billion of debt. It’s going to be critical that creditors maintain good data about DROs over the next year if the industry is to get any understanding of the true extent of debtor distress.”

Source: http://www.creditman.biz/uk/members/news-view.asp?newsviewID=9939&id=1&mylocation=News&chksrc=NNow4251

Middle England is caught in debt trap as house prices fall and job hopes dim

2009-02-18T02:14:00.000-08:00

Increasing numbers of middle-class families are being caught in the debt trap as house prices continue to fall and job prospects diminish, a new report suggests.

Plunging property prices have cut off access to additional funds for many homeowners who relied on remortgaging their property to pay off credit-card debts and personal loans, forcing many into financial difficulties as they struggle to meet their repayments.

The proportion of homeowners being forced to declare insolvency has doubled since 2007 and is set to rise further, figures from Grant Thornton, the accounting firm, show. Homeowners accounted for nearly 70 per cent of applications for individual voluntary arrangements (IVAs) received by Grant Thornton in 2008's second half, up from 58 per cent in its first half and about 35 per cent in 2007's first half.

Debt management or IVA?

2009-02-18T02:02:00.000-08:00

If you’re in debt, you may have heard of debt management plans and of IVAs (Individual Voluntary Arrangements). You may wonder how they differ and you may wonder – most importantly – which one could be right for you.

Let’s start with four important points:

First: they’re both arrangements that could help you if you can’t keep up with your monthly payments to your unsecured debts.

Second: they can both involve asking professionals to help you pay off your unsecured debts at a rate you can afford (professional help is a fundamental part of an IVA, but anyone thinking of debt management can either talk to their lenders themselves or ask a debt management organisation to do it on their behalf).

Third: one (debt management) is an informal plan, while the other (IVA) is a legally binding agreement between you and your lenders.

Fourth: they aren’t the only debt solutions – you’ll need to talk to a debt adviser who understands the various debt solutions available and can provide advice on which one is most appropriate for someone in your situation.

Debt management plans

For anyone who goes to a debt management organisation, a debt management plan starts when you ask them to help you clear your debts. When you tell them what you owe, what you earn and what you need to live on, they can help you figure out how much you can realistically afford to pay towards your unsecured debts every month – after taking your essential living expenses into account.

Once you’ve agreed on that figure, they’ll contact your unsecured lenders and ask if they’ll consider making a few changes to your repayment terms. They may agree to freeze interest, for instance, or waive charges. Perhaps most important, they may agree to accept lower payments.

If your lenders agree to the plan, you’ll start making the agreed monthly payments. The debt management organisation will usually handle all correspondence between you and your lenders, and re-negotiate if any change in your circumstances leads to an increase or decrease in the amount you can pay to your lenders – if your income drops, for example, or your mortgage payments drop.

IVAs

As a form of insolvency, an IVA can actually write off some of your debt. It’s a legally binding agreement designed to help people who are unable to repay their debts within a reasonable time period.

Like debt management, an IVA involves making regular monthly payments, based on the maximum you can afford once all your essential expenses have been taken into account.

However, it will have a much bigger impact on your credit rating than a debt management plan. This may make it more difficult and / or expensive to be approved for credit for a year after it’s finished. For the duration of the IVA (normally, five years) the amount of credit you’ll be allowed to apply for will be severely limited.

To enter into an IVA, you’ll need to talk to an Insolvency Practitioner (IP). Together, you’ll draw up an IVA Proposal – a document that tells your lenders how much they can expect to receive if they approve the IVA. If the Proposal is approved by lenders who collectively ‘own’ 75% of your debt, the IVA can go ahead.

If it’s approved, you’ll spend (in most cases) 60 months making your monthly contributions and – if you’re a homeowner – you may be required to release some of the equity in your home in the 54^th month. If all goes well, any outstanding debt will be written off at the end of the IVA.

Debt consolidation or IVA, which is the best?

2009-01-15T02:32:00.000-08:00

Why do people consolidate their debts or enter into IVAs (Individual Voluntary Arrangements)? People in debt may be looking for a debt solution that can reduce their monthly debt repayments and help them get out of debt at a rate they can afford.

Debt consolidation loans and IVAs can both do this, but they’re very different debt solutions, suitable for people in very different situations. Neither is better or worse than the other – it’s a question of which is more suitable for the individual in debt.

So, first of all, there’s the issue of eligibility. As a formal debt solution and a form of insolvency, IVAs are only available to people who genuinely can’t keep up with their repayments to their unsecured debts.

Debt consolidation loans are, in theory, available to anyone – everyone has the right to take out a new loan that’s large enough to pay off their other unsecured debts.

Second, there’s the total debt to consider. IVAs are normally only suitable for people who owe at least £15,000, although this figure isn’t set in stone.

There’s no minimum amount that makes someone eligible for a debt consolidation loan – if they think it’ll improve their financial situation, they’re free to consolidate their debts if they want to, as long as they can find a loan.

Third, there’s the impact on the individual’s credit rating. By simplifying their finances and reducing their monthly debt repayments, a debt consolidation can help them avoid late / non-payments, which should help them keep their credit rating from suffering.

An IVA, on the other hand, is a form of insolvency – it’s not regarded as being as serious as bankruptcy, but it will have a serious impact on someone’s credit rating, and probably make credit harder to obtain and more expensive. It’ll stay on their credit report for six years, although this won’t really be an issue for the first five of those years (the normal length of an IVA), as people aren’t normally allowed to borrow money while their IVA is in progress.

Fourth, there’s the potential impact on the borrower’s home (if they’re a homeowner). Many people choose to consolidate their debts with a secured loan, securing their new loan against their house. This should get them a better rate of interest than they’d get with an unsecured debt consolidation loan, but they’re potentially putting their home at risk – if they don’t keep up their monthly payments, the lender could repossess their home (although lenders do see this as a last resort and will try to find another solution to the problem).

IVAs can protect a borrower’s home. Unlike bankruptcy, an IVA is very unlikely to require the homeowner to sell their home, although they are likely to have to free up some of the equity in their home towards the end of the IVA, so they can pay off more of their debt.

Fifth, there’s the question of writing off debt. With an IVA, the individual basically agrees to pay off as much of the debt as they realistically can over the next five years. They commit to making regular, fixed payments – the maximum they can afford once they’ve taken their essential monthly expenses into account. In return, the creditors agree to write off any outstanding debt at the end of that period – as long as the borrower has kept up with their payments.

With a debt consolidation loan, there’s no question of writing off any debt. The individual is simply borrowing enough from a new lender to pay off their ‘old’ lenders, so there’s no reason anyone should agree to write off anything!

If you’re wondering whether a debt consolidation loan or IVA could be the debt solution for you, contact a professional debt adviser.

BoE Figures - their impact on debt consolidation loans

2008-10-21T08:59:00.001-07:00

For anyone thinking of consolidating their debts, the recent figures from the Bank of England might not make pleasant reading. Their 'Lending to Individuals: August 2008' Statistical Release reveals that the increase in total net lending to individuals was much lower in August (£1.4 billion) than in July (£4 billion).

The problem is, many people need credit more than ever - levels of personal debt are at an all-time high in the UK, and many borrowers are urgently looking for the debt consolidation loans that could help them bring their debts under control once more.

Basically, a debt consolidation loan is a larger loan which lets the borrower pay off their existing unsecured debts all in one go. Rather than, for example, paying something towards an overdraft, two credit card debts, one store card debt and a personal loan, the borrower simply makes one monthly repayment to the lender who gave them the debt consolidation loan. So consolidating debts can make things simpler, helping borrowers stay on top of their debt and avoid the charges (and damage to their credit rating) that many lenders impose for late payments.

Simplicity, however, isn't the only advantage. Debt consolidation loans often come with lower interest rates than other forms of debt (in particular credit & store card debt), especially if the individual consolidates their debts by securing them against property (i.e. through a secured debt consolidation loan or debt consolidation mortgage). In other words, the debt accrues less interest every month, so the borrower can put more money towards the debt itself, rather than towards the interest.

Finally, the third major advantage of a debt consolidation loan is its potential to reduce monthly debt repayments. Anyone's circumstances can change, and the repayment terms that someone agreed to a year ago might no longer be realistic. If they simply can't afford to keep making repayments at that level, a debt consolidation loan can give them a valuable opportunity to think through their finances and arrange to repay the debt more slowly, bringing their monthly debt repayments down to an affordable level.

As with any debt solution, it's important to seek professional advice before committing themselves. A debt adviser can help them do the calculations and figure out how quickly they can realistically repay their consolidation loan - leaving some leeway in their monthly budget for any unexpected expenses that arise. They can also help them assess the impact of any foreseeable changes to their financial situation in the near future, and decide if a debt consolidation loan is actually the best debt solution for them.

Repaying a debt more slowly will, of course, mean that they're in debt for longer and could end up paying more as the debt will accrue interest for longer, although this may be offset by the fact that the debt consolidation loan's interest rate is lower. Whether or not this is a price worth paying is up to the individual - depending on their finances, it could well make more sense to make lower payments reliably (and for longer) than to struggle to keep up with higher payments and end up damaging their credit rating with defaults, late payments, even County Court Judgments (CCJs).

The best way to start tackling a debt problem is to talk to a professional debt adviser who knows how all the different debt solutions work - someone who can look at the individual's situation and help them decide whether they'd be better off with a debt consolidation loan or with an alternative debt solution, such as a debt management plan or IVA (Individual Voluntary Arrangement).

Read more about debt consolidation & IVAs at http://www.debtadvisersdirect.co.uk

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

Offset mortgages explained

2008-10-21T08:54:00.001-07:00

An offset mortgage allows a homeowner to reduce the interest on their mortgage by offsetting credit that is held in savings or current accounts against the total mortgage debt.

For example, if the homeowner has a mortgage of £150,000 and savings of £50,000, then they would pay interest on only £100,000.

Advantages of an Offset Mortgage

• Offset mortgages are a good idea for those who can save large amounts of money as it reduces their mortgage repayments.

• Savings normally attract some kind of tax penalty, but if your savings are being used to offset a mortgage then you will not pay any tax on your savings.

• The interest rate payable on a mortgage is normally far higher than what your savings will earn in a current account. For example, the rate of interest your savings will earn in a current account may only be 1%, compared to the interest on your mortgage, which may be 6%. It's a far more efficient to use the money in your savings to pay off the mortgage than it is to leave it in a low interest paying account.

Disadvantages of an Offset Mortgage

• Because this is a relatively new type of mortgage you may find that not as many lenders currently provide this service. The limited amount of lenders currently offering offset mortgages means that there isn't a great deal of choice in the market place.

• Coping with an offset mortgage requires a certain amount of discipline, as the temptation is always there to dip into the savings pot. If you give in to this temptation and splash out on extravagant items then you will no longer have any credit left to offset your mortgage against. This will leave you with an uncompetitive mortgage rate.

Compare mortgages at moneysupermarket.
Our mortgage calculator compares over 8,500 mortgages, offset mortgages and remortgage products.

Article Source: http://EzineArticles.com/?expert=Nick_Cox

Fully Comprehensive Car Insurance

2008-10-21T08:53:00.001-07:00

Fully comprehensive car insurance may not cover you for every eventuality a new report is claiming.

Features that used to be standard in virtually all comprehensive insurance, such as third-party liability cover for driving any vehicle, or an extension of cover for short trips overseas, are disappearing. Exclusive analysis for Financial Mail conducted by the British Insurance Brokers' Association found examples where comprehensive cover has been eroded.

Hayley Parsons, chief executive of comparison site gocompare.com, says: 'The importance of comparison sites has meant it is key for insurers to get near the top of the rankings on price and they can do that by slimming down the cover.'

Graeme Trudgill, technical services manager at Biba, says: 'All the advertising is about price. It's no longer focused on providing the right financial protection for the motorist.

'Even if an element of cover remains, the sum insured may be reduced. Many insurers have lowered the limits for loss of items from the car, for accidental damage to the windscreen or for personal accident cover.

'And in some cases, such as an accident involving a younger driver, the compulsory excess charged has increased.'

Trudgill says: 'Think about what features matter to you. Also, how much could you afford to pay in the event of a claim. You may find that paying slightly more than the cheapest premium actually gives you a better value option.'

Despite this cutback insurance premiums are still on the rise. Business information group Datmonitor have confirmed that insurance companies are losing money and as a result will raise their premiums to return to profit.

Figures showing there has been a 20% increase in the past 12 months.

Analysis by management consultant Deloitte has echoed these findings by revealing that premiums have risen by 8.2 per cent in the past 12 months to £488 a year on average.

Catherine Barton (left), insurance partner at Deloitte, says: 'This is the biggest annual rise in premiums we have seen in a long time. Insurers have been releasing money from reserves over the past few years to keep competitive, but this is drying up and premiums are having to rise.'

The Deloitte figures suggest that premium inflation is accelerating. In April, AA Insurance reported a 5.8% annual rise in motor premiums.

Ashton Berkhauer, head of insurance with comparison site uSwitch.com, says: 'The number of people shopping around and not accepting their insurers' renewal has increased.

'Typically, 80% of customers renew with an existing insurer, but we've seen that slip to 65% for some companies.

'Drivers are under increasing financial pressure and so they are becoming more price sensitive than ever before.'

Darren is the author of several articles pertaining to Car Insurance

Article Source: http://EzineArticles.com/?expert=Darren_Darr

Gregory Pennington comments on bank troubles

2008-10-10T07:08:00.001-07:00

Responding to recent troubles in the banking world, debt management company Gregory Pennington reminds consumers that a bank's issues do not actually put most people's savings at risk.

"Some may be tempted to keep a close eye on their bank's finances, waiting to withdraw all their money at the first sign of trouble," said a spokesperson for the debt management company. "Of course it's vital to protect your investments, but it's also important to understand the extent of the protection offered to normal savers."

"First of all, troubled banks don't necessarily 'go bust', as some headlines may infer. In the case of Bradford and Bingley, for example, their website informs visitors that 'Bradford & Bingley's branches and savings customers are now part of Abbey and Santander. One of the largest banking groups in the world with more branches in the world than any other international bank.' For their customers, it's 'business as usual'.

"Second," the spokesperson for the debt management company continued, "there's the Financial Services Compensation Scheme (FSCS), the UK's statutory fund of last resort for customers of authorised financial services firms. The FSCS means that the first £35,000 of each customer's savings with a firm are guaranteed – even if the company can no longer repay that money, it would be refunded in full by the FSCS."

Savers with deposits over £35,000 may still receive some of their remaining money, but that would not be guaranteed, and would depend on how the insolvency process plays out.

Naturally, many people with savings of over £35,000 may wish to keep their money with various different banks. Someone with £70,000, for example, could split it equally between two different banks and have the entire sum guaranteed.

"Note, however, that the FSCS compensates people 'per authorised institution' – many banks are in fact subsidiaries of other financial institutions, so someone who split £70,000 between two banks that share the same parent company would be guaranteed only £35,000 of their money if that parent company was declared insolvent."

As a debt management organisation, Gregory Pennington focuses on helping people manage and clear their debts: "In the vast majority of cases, it makes financial sense for borrowers to get out of debt before they start saving, as debts tend to gather much more interest than savings."

The company does, however, also provide advice aimed at helping people stay out of debt in future. "While some people face debt problems because they've financially over-committed themselves over a period of time, others find themselves pushed into debt by a sudden change in circumstances (sickness, for example, or unemployment). Without some 'rainy day' money set aside, it's all too easy to accumulate small debts which grow into large debts as they struggle to fund debt repayments at the same time as keeping up with their normal financial commitments.

"Whether it's a few hundred pounds or many thousands, saving for the future is one of the single most important things an individual can do in order to safeguard their financial stability in the future. Since we advise people to start saving as soon as they've settled their debts, it's worrying to think that the last year's events in the banking industry may have put some people off the idea of saving. Aside from compensating people whose banks run into trouble, the FSCS serves another vital function: giving would-be savers the confidence that comes with knowing their investment is protected."

Further information:
http://www.gregorypennington.com
http://ukpress.google.com/article/ALeqM5i8V8nlh2EGSTle7NIknI7gH1J98A
http://www.sourcewire.com/releases/rel_display.php?relid=LQiLA

Personal debt & car loans

2008-10-07T06:51:00.001-07:00

or most people, choosing a car is a slow, well-thought-out process - and choosing a car loan should be much the same. However, many people simply go with whatever finance deal they are offered at the showroom, even though there may be much better car loans on the market. By planning well and choosing the right loan, you can save yourself a lot of money in the long run.

Here are some tips for choosing the right car loan.

Make a plan
Plan how much you want to borrow, and for how long. Don't be tempted to get a bigger car loan for a more expensive vehicle unless you're sure you can afford it.

Plan your car loan in terms of monthly payments. You need to be sure that your payments are affordable and that you will still be able to afford them if your other costs of living rise. If your car loan payments are going to leave you with very little disposable income, you should probably play it safe and find a cheaper alternative.

Shop around for the best car loan
Taking your time and looking at what's available in the market could well find you a deal with a lower interest rate, which can save you a lot of money. The interest rate you are offered will vary depending on your credit rating, but anyone can save money by taking their time and finding the best deal.

Check the total repayment figure
The interest rate of your car loan and the length of the repayment term will both affect how much you pay in the long run. If you can't find a lower interest rate, is there any way you could repay the car loan more quickly? It might be worth making a few short-term sacrifices if it saves you hundreds of pounds in interest.

Once you've done the calculations, take a good look at that overall figure. If that £2,000 car is going to cost you £3,000, do you really need it that much? Would it make more sense to save £2,000 - and then buy a similar car for £2,000?

Protect yourself
It's impossible to predict what could happen in the next few years - even if you're sure your car loan payments are affordable, redundancy or a personal injury could seriously damage your ability to keep up with repayments.

So it often makes sense to consider Payment Protection Insurance (PPI) on your car loan. If at any point you find yourself unable to make payments due to circumstances outside your control, your car loan payments could be made by the insurance company for a pre-agreed period of time.

You could also look into gap insurance, which could - should you have an accident - cover the shortfall between the market value you receive from your (standard) motor insurance claim and the greater amount due under your loan agreement.

Read more about car finance & car loans at http://www.thinkmoney.com

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

Struggling to meet financial commitments?

2008-10-07T06:36:00.001-07:00

National Debtline are claiming that more UK consumers are struggling to meet their financial commitments, as each month more are applying for payday loans.

It warned that the increased number of payday loan applications - which was highlighted by a recent moneysupermarket study - was symptomatic of an underlying problem where people are finding that their outgoings regularly exceed their incomes. Advice offered by the national telephone helpline service informs consumers they should set out a budget to help them manage their financial situation and minimize the effect that items of expenditure such as shopping and household bills, mortgages and personal loan repayments are placing on households every month.

According to the moneysupermarket study, the number of people opting to take out payday loans has increased by 55 per cent since September. The group attributed much of the growth in popularity to inflated demands on personal finances arising from recent energy price hikes and the increases in the average costs of food. Tim Moss, head of loans at the firm, said that the loans were proving a more attractive option than going into an unauthorized overdraft.

Commenting on the findings, Beccy Boden Wilks, spokesperson for National Debtline, said: "If your salary is not lasting until next payday, and therefore need to use this service, then there is obviously a problem. You are spending more than you earn. So if somebody feels the need to use a payday loan on a regular basis, it's probably symptomatic of a serious underlying debt problem. Therefore, you need to set a budget, or [ask] are your current financial commitments too high, or have you overstretched yourself with your mortgage."

She added that for those whose outgoings are exceeding their incomes, seeking independent financial advice may be a prudent option. In doing so, people might be able to identify areas where they can cut back on monthly spending and lessen their reliance on lending. She also advised that people may want to negotiate with their creditors to agree upon an extended payment period with a lower monthly contribution, while extending the length of a mortgage was also identified as a way to reduce the strain on finances. According to Ms Boden Wilks consumers who are struggling with their finances should ask themselves whether or not they can realistically meet their mortgage and credit responsibilities, or whether they should consider talking to their providers to renegotiate terms.

Moneysupermarket's Tim Moss also noted that while payday loans were an effective short-term solution, people who were regularly struggling with monthly payments should sit down and evaluate their finances and identify areas where they can cut back on spending.

Elsewhere, residential property industry commentator the Council of Mortgage Lenders last month identified a growing trend among those looking to get on to the property ladder, with first-time buyers approaching their parents for a loan to cover the costs of a deposit as many mortgage providers withdraw 100 per cent lending packages.

Should I consolidate my debt?

2008-10-06T04:07:00.001-07:00

Should I consolidate my debt?

If you have multiple debts that you are struggling to deal with, you may have considered debt consolidation as one option. Debt consolidation is a good way of potentially reducing your monthly payments and simplifying your finances. But as with any debt solution, it comes with its downsides - and it's always worth speaking to a debt adviser to discuss whether another debt solution may be more suited to your situation.

Debt consolidation: how it works

Debt consolidation is a way of combining all your debts into one, and then paying them off in monthly payments to only one creditor, rather than individual payments to all of your creditors. It is essentially another loan that pays off your existing debts -your lender will pay off your debts for you, and you will repay that lender accordingly.

An advantage of debt consolidation loans is that they can be scheduled over a longer period of time than your original debts, making your monthly payments lower. If your original debts included high-APR credit such as credit cards, there's a good chance your overall interest rate will be lower too.

However, be aware that repaying a debt over a longer period of time may result in you paying more money back in the long run, as interest will be added for every month taken to repay the debt.

When should I consider a debt consolidation loan?

* If you have multiple debts that you think will be affordable if you spread them out over a longer period.

* If your debts are currently manageable, but you would like to simplify your monthly finances.

* If you have a number of high-APR loans or credit cards - a debt consolidation loan can reduce your interest rates significantly.

When is a debt consolidation not suitable?

* If your monthly payments will still be a struggle after you have rescheduled them. Particularly if you have debts of over £15,000, you may want to consider an IVA (Individual Voluntary Arrangement) or another debt solution - contact an expert debt adviser for further information.

* If you are considering 'topping up' your debt consolidation loan with money you do not need, i.e. to enable another expensive purchase. Many people are tempted, but doing so will increase your risk of being unable to repay the loan, which carries serious consequences.

Before considering any debt solution, it's essential that you seek expert advice from a professional debt adviser. They will talk you through your financial situation in confidence and help decide which debt solution is best suited to you. Debt consolidation loans are suitable for some people, but it's also worth considering a debt management plan, and for those with over £15,000 of debt, an IVA may be the best option.

Debt Advisers Direct (http://www.debtadvisersdirect.com) are a debt management company based in Salford Quays, Manchester. The company specialises in a range of financial services, including mortgages, loans, debt help and advice (including debt management plans, IVAs, and debt consolidation).

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

IVA

2008-10-03T04:21:00.001-07:00

IVA

If you have debts of around £15,000 (or higher) that you are unable to repay, an IVA (Individual Voluntary Arrangement) is a Government-backed debt solution that could help you get back in the clear by writing off a substantial amount of your debt. As part of the Insolvency Act (1986), it's a legally binding means of getting out of debt that helped over 40,000 people per year in both 2006 and 2007.

An IVA proposal can only be put forward by a licensed Insolvency Practitioner. If the IVA is approved, you will pay a set monthly amount towards your IVA, usually for 5 years - after which your debt will be considered settled.

Before entering an IVA, your circumstances will be thoroughly reviewed to determine how much you are able to pay each month once living expenses have been taken into account. Creditors are likely to accept an IVA if they can see that a) you are not able to repay the full amount, and b) they will get more from your IVA then they would by petitioning for your bankruptcy.

How does an IVA work?

1) Firstly, you will speak to a debt adviser about your situation. If they think an IVA is your best option, they will work with you to draw up a proposal, telling your creditors how much they would receive if the IVA goes ahead.

2) The proposal is then submitted to your creditors for approval. A Creditors' Meeting will be planned to give your creditors a chance to discuss the terms.

3) The Creditors' Meeting invites your creditors to get together and vote on whether to approve your IVA proposal. For the IVA to go ahead, those who vote in favour of the proposal must collectively own more than 75% of your total debts.

If any of your creditors do not respond to the proposal, it is automatically considered a vote in favour of the IVA.

4) If approved, the IVA begins and you will pay a fixed amount each month, which will be divided between your creditors. This will usually take place over 5 years. Your creditors are legally required to stop charging interest and may no longer pursue any kind of legal action, unless the terms of the IVA are broken.

5) If you are a homeowner, you will probably have to free up the majority of the equity in your home in the 4th year of your IVA, and this will also be divided between your creditors.

6) If you successfully keep up payments for 5 years, the IVA is complete and you are legally debt-free. However, it may take up to a year afterwards for the IVA to disappear from your credit history.

Useful IVA resources:
http://www.debtadvisersdirect.co.uk/iva-solutions/iva-solutions.asp
http://www.gregorypennington.com/individual-voluntary-arrangements.asp
http://www.thinkmoney.com/debt/IVA.asp

Mortgage & Secured Loan Chaos

2008-10-01T02:43:00.001-07:00

Mortgage & Secured Loan Chaos

It's been well publicized lately that the housing market is on the brink of a crisis - in fact, the crisis has hit the US already. As mortgages become harder to come by and homeowners begin to struggle with rising interest rates and lower demand from buyers, the market is faced with a vicious circle in which prices keep falling, but there are not enough mortgages being offered to increase demand.

What happened? - a timeline

The problems can be traced back to the housing market in the US, in which people with poor credit history (known as 'sub-prime' borrowers) were allowed to take out mortgages - many of whom subsequently could not keep up with payments.

Many of these mortgage debts had been 'bought' by UK banks, meaning they were now responsible for receiving the repayments. However, due to the amount of times these debts had been bought and resold, it was often difficult for banks to predict how much of the debts would be repaid.

When many of these sub-prime borrowers began to fall behind on repayments, it hit whoever 'owned' the mortgage debts - meaning both the US and the UK were affected. This is what became known as the 'sub-prime mortgage crisis'.

What is happening now?

UK banks' losses have in fact been small so far - but there is a risk that they could get a lot bigger. For this reason, they are very cautious about new lending, and so they are tightening the criteria needed to qualify for mortgages.

The knock-on effect of this is that houses are harder to sell, meaning prices are getting lower. However, lower mortgage availability means that demand isn't getting any higher - so house prices are likely to fall further - and so the cycle continues.

The Bank of England has acted on two fronts. Most significantly, they have swapped £50bn of secure Government Bonds in return for banks' mortgage debts - effectively a show of confidence that sub-prime losses will not be as big as the banks feared. This move is designed to calm the insecurity that is causing the tighter lending policies and prevent any particularly dangerous drops in house prices.

Additionally, they have lowered the basic interest rate in order to convince banks to lower mortgage interest rates - but this is currently not working, and so the problems continue.

What happens next?

There are mixed opinions amongst the experts:

RICS (Royal Institute of Chartered Surveyors)

* Predict that house prices at the end of 2008 will be down by 5% from the end of 2007

* Sales will be down by 40%

CML (Council of Mortgage Lenders)

* House prices at the end of 2008 will be down by 7% from the end of 2007

* Sales will be down by 35% to 770,000 sales

Although the extent of the predictions vary, nearly all experts agree that the housing market is increasingly on the downturn. House prices have only fallen slightly so far - but if the trend continues, the housing market will decrease in value significantly in the coming months.

The US have already been through what the UK is going through now - a tightening in lending criteria combined with fewer mortgages - and they have seen some sharp falls in house prices. Many economists believe the UK will follow this pattern.

Banks need to continue borrowing and lending, if a little more carefully than before, if the market is to recover. If they don't, house prices will continue to fall, and it could be years before they begin to rise again.

If you're being affected by current economic problems, you may find the following resources useful:

For help managing existing outgoings, or if your struggling to repay debts:
http://www.gregorypennington.com
http://www.debtadvisersdirect.co.uk
http://www.thinkmoney.com/debt/

If you want to consolidate your existing debts into one more manageable payment:
http://www.gregorypennington.com/debt-consolidation-loan.asp
http://www.debtadvisersdirect.co.uk/debt-consolidation/debt-consolidation.asp
http://www.thinkmoney.com/debt/debt-consolidation.asp

If you're looking for help and advice on mortgages, remortgages or secured loans

http://www.thinkmoney.com/mortgage/
http://www.thinkmoney.com/loans/

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

Debt Consolidation & Debt Consolidation Loans

2008-10-01T02:20:00.001-07:00

Debt Consolidation & Debt Consolidation Loans

Why do we borrow? Cars, holidays, TVs, home improvements... the reasons might vary, but all loans mean we end up owing more. Or do they?

Debt consolidation loans stand out from the crowd. Unlike other loans, they're designed to help people deal with the debt they already have. So they're fundamentally different to other kinds of loan.

The principle is simple: borrowers consolidate their debts by taking out a new loan large enough to pay them all off. This can deliver three benefits in particular.

Benefits of debt consolidation

First of all, repaying one loan is simply easier than repaying many. Rather than juggling multiple debts - paying different creditors different amounts at different times - the borrower can just make one monthly payment. Since it's easier to manage, the borrower is far less likely to make payments late (or not at all!), which can lead to anything from penalty charges to higher interest rates, and which always looks bad on a credit rating.

Second, there's a good chance the new consolidation loan will come with a lower interest rate, especially if it's used to pay off high-interest debts like credit / store cards and overdrafts.

Third, a consolidation loan gives the borrower a chance to think carefully about repayment terms. If they couldn't keep up with repayments to their 'old' debts, it might make sense to pay back the consolidation loan over a longer period of time. It'll mean they stay in debt for longer (and perhaps cost them more in the long run), but it'll reduce their monthly payments, and sometimes that's the most important thing.

Drawbacks of debt consolidation

However, there can be drawbacks to debt consolidation.

First, as mentioned above, paying a debt back more slowly means it'll take longer gathering interest, so the total amount repaid can be higher.

Second, consolidation loans - unless handled carefully - come with a very real danger. When someone uses the loan to pay off their debts, they have to be very careful not to run up fresh debts (particularly tempting on credit / store cards and overdrafts, since they make it all too easy to borrow a few pounds here and a few there). So in general, debt consolidation is a solution that's suitable for people who are confident in their ability to say 'no' to fresh credit. Anyone who isn't confident could well be better off with a different debt solution.

Alternatives to debt consolidation

Either way, it's always important to talk to a debt adviser who understands the full range of available solutions, such as debt management plans, IVAs (Individual Voluntary Arrangements), Trust Deeds (for residents of Scotland) or even bankruptcy. Each solution is unique, and its benefits and drawbacks can affect different people in very different ways - which is why it's so important to talk to an expert first.

Debt consolidation resources:
You can get more information on debt consolidation at the following websites:

http://www.debtadvisersdirect.co.uk
http://www.debtadvisersdirect.co.uk/debt-consolidation/debt-consolidation.asp
http://www.thinkmoney.com/debt/debt-consolidation.asp
http://www.gregorypennington.com/debt-consolidation-loan.asp

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

Debt Management - Consider the Pros & Cons

2008-10-01T01:52:00.001-07:00

Debt Management - Consider the Pros & Cons

Anyone who knows something about debt probably knows something about debt management companies - professional firms who will manage an individual's debts on their behalf.

This article takes a look at the pros and cons of debt management in terms of three topics close to any borrower's heart: saving money, reducing stress levels and protecting credit rating.

Topic #1: Saving money

Pros: Monthly payments lowered. Interest frozen. Charges waived. The better their relationship with creditors, the better a debt management company's chances of successfully negotiating for one or more of these concessions. This can save the client a considerable amount of money - not just every month, but potentially over the course of the debt management plan as well.

Cons: Lowering monthly payments means debts take longer to pay back. If interest hasn't been frozen, they'll also accumulate interest for longer, adding to the long-term cost. Plus, there's no guarantee creditors will agree to any concessions, or that they'll save the client more in the long run than the debt management company charges in fees. And since a debt management plan is an informal agreement, they're free to change their minds.

Topic #2: Reducing stress levels

Pros: Some people don't have the time to deal with complicated finances, or don't feel confident about doing so. For them, it's a huge relief to hand their debts over to someone else, who might handle everything from letters and phone calls to negotiations and payment distribution. And some people admit they're no good at juggling numbers and negotiating deals, so it makes sense to let a professional talk to creditors and propose a repayment plan that leaves them enough money for essential bills and other expenses.

Cons: Not everyone feels like this. Many people would rather keep their finger on the pulse personally, so the thought of adding an intermediary just adds more complexity to an already-complicated matter. In short, they feel less stressed when they know they're handling it themselves.

Topic #3: Protecting credit rating

Pros: By making new arrangements with creditors, a debt management company can minimize the impact of debt on someone's credit rating, keeping debt problems from escalating into CCJs (County Court Judgments) or even bankruptcy. Plus, even though debt management addresses unsecured debts, it frees up money for secured debts such as mortgage payments, so people can avoid getting into arrears - or even being evicted.

Cons: When they agree to reduced payment terms, creditors may register a default (if they haven't done so already) and this will appear on the borrower's credit report, potentially making it harder and more expensive to get credit.

In conclusion... Debt management isn't for everyone. Some people don't like the idea of delegating their financial affairs like this. Others may not be eligible: creditors will negotiate like this when borrowers can't afford their 'normal' payments, not when they're simply looking for a way to reduce their monthly payments.

But for some people, the right debt management plan can be exactly what they've been looking for - a planned, systematic path out of debt and back to financial stability.

You can find out more about debt management at the following web pages >
http://www.gregorypennington.com
http://www.gregorypennington.com/debt-management.asp
http://www.thinkmoney.com/debt/debt-management.asp

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

Reposession & IVAs

2008-08-27T07:29:00.000-07:00

When a homeowner faces the threat of repossession, finding a way to make those monthly mortgage payments jumps to the top of their priorities list. Their first port of call should really be their mortgage lender, who may let them reduce or reschedule their payments until they can get their finances under control again.

There are, however, other places they can turn to. Often, people can't pay their priority bills (such as their mortgage) because their non-priority bills (credit cards, personal loans, overdrafts, etc.) simply take up too much of their monthly income. In cases like this, they may have a wide range of debt solutions available to them, from debt consolidation to IVAs (Individual Voluntary Arrangements).

Helping them reorganise their non-priority payments, these debt solutions can free up the money they need for their mortgage payments. Different debt solutions are right for different people, so they should start by seeking debt advice from a professional debt specialist, who can help them decide which debt solution (if any) is right for them.

Debt consolidation
A debt consolidation loan may be a simple idea, but it can really help people with multiple debts. If they take out one new loan that's big enough to pay off all their unsecured high-interest debts, they'll have just one repayment to make per month, rather than many. This can greatly simplify their finances as well as reducing the interest they're paying on their debt.

A debt consolidation loan can be an effective way for someone to reduce the amount they have to pay every month, as they can arrange to repay the consolidation loan more slowly than the original debts, although this could well mean they end up paying more in total.

Depending on their situation, they might consider consolidating their debts by remortgaging - taking out a larger mortgage and using the cash to pay off their unsecured debts. Even if this increases their mortgage payments, it can still reduce their overall monthly expenditure, as they won't have to make any payments to other debts. Of course, it's always important to think carefully before securing any debt against property.

But debt consolidation isn't always the best way forward, and some people may be better off with an alternative debt solution, such as a debt management plan - or an IVA.

IVA (Individual Voluntary Arrangement)
For homeowners with significant debts (over £15,000, in most cases), an IVA could be a good way of reducing their monthly payments, freeing up cash for mortgage payments and writing off a portion of their debt. Normally lasting five years, an IVA is a legally binding agreement between an individual and their unsecured creditors:

· The individual agrees to make regular fixed payments throughout the IVA - basically, the maximum they can afford once they've taken their living expenses into account. They may also have to free up some equity in their home towards the end of the IVA, so they can pay their creditors more of what they're owed.

· If enough of the creditors accept the terms, they'll agree to write off any outstanding debt once the IVA has been successfully concluded. They also agree not to take any (further) legal action, as long as the individual keeps making the payments.

An IVA is only an option if the individual genuinely can't make their normal payments to their unsecured creditors - but can commit to making those reduced payments for the duration of the IVA.

Read more about debt consolidation loans & IVAs at http://www.debtadvisersdirect.co.uk

Article Source: http://EzineArticles.com/?expert=Melanie_Taylor

Debt consolidation remortgage: some things to consider

2008-08-22T06:59:00.000-07:00

If you have several debts you are looking to repay, a debt consolidation remortgage could be the answer. It allows you to consolidate your debts as part of your mortgage terms – effectively adding your debts to your mortgage. It also enables you to repay the debts over a much longer period than an unsecured debt consolidation loan, or other debt solution, making repayments cheaper (although repaying what you owe over longer could mean you pay more in total.)

Will I be able to get a debt consolidation remortgage?
It’s been well publicised over the past year that mortgages are harder to get than they used to be – a 10% deposit is all but a necessity, and lenders are being stricter about their lending criteria than in recent years.

Because they involve paying back both your mortgages and your debts, debt consolidation remortgages can be a little harder to obtain than regular mortgages. But with a sufficient credit rating, adequate deposit and a proven ability to repay it (i.e. good earnings), it’s still quite possible to get a competitive deal.

As debt consolidation remortgages rely on equity withdrawal, the amount of equity you have tied up in your home will also affect your ability to obtain a debt consolidation remortgage, and how much more you can borrow to pay off the debt.

Your equity includes any deposit paid on the house, any repayments you have made and any increase in your home’s value – essentially, it is the proportion of your home that you actually own. The more equity you have, the more equity you have the potential to withdraw – plus your lender will be more confident in your ability to repay.

Will it be affordable?
This really depends how big your debts are – i.e. how much extra you need to borrow. For example, if you have a mortgage for £100,000 and want to consolidate £50,000 of debts, you can expect your payments to go up by 50%. Consolidating £8,000 of debts on a £150,000 mortgage, on the other hand, would be much more affordable. If you are unsure whether your debts are too big for a debt consolidation mortgage, or want to know about other possible debt solutions, talk to an expert debt adviser.

Interest rates
Debt consolidation remortgages are offered at the same rate of interest as a regular mortgage – the only added expense will be the extra you borrow to pay off the debts you have consolidated into the mortgage.

This will vary depending on your circumstances: if the homeowner has a poor credit history, the interest rate is likely to be a little higher. Since the interest rate applies to the whole mortgage, not just the other debts, this could add up – so it is important to make sure you can afford the monthly repayments if you are going to take this route.

Resources:
For more information on debt consolidation, debt management, IVAs & Trust Deeds visit www.debtadvisersdirect.co.uk

The credit crunch: a year on

2008-08-13T06:50:00.001-07:00

The credit crunch: a year on

As the credit crunch reaches the end of its first year, debt management company Gregory Pennington (gregorypennington.co.uk) have advised people to keep on top of their finances, and warned that there may still be tough times ahead.

A spokesperson for Gregory Pennington said: “While studies suggest some of the country feel they have not yet been affected too badly by the credit crunch, these people may begin to feel the effects as future events unfold.”

A recent survey in The Times revealed that 66% of those asked felt their family would fare badly over the next year, while 77% felt the country as a whole will suffer. The spokesperson said that while these views are probably justified, there is still a lot people can do to lessen the effects of the credit crunch.

“The most important thing is staying on top of your finances,” says the debt solutions company. “Make sure you are meeting all your priority financial commitments before anything else, and try to build a budget around that. If you find you can’t meet those commitments, seek expert advice as soon as possible.

“We would also advise people to save as much as possible, because that little bit extra could come in very useful if things get tight.”

The fact that the remaining 34% of people questioned in the survey did not feel (or weren’t sure) that their family would suffer over the next year suggests that the credit crunch has not necessarily affected everyone. But the Gregory Pennington spokesperson warned that other problems linked to the credit crunch may start to kick in over the next few months.

“It’s important to distinguish between the different elements of the economic downturn we’re currently experiencing,” he said. “The credit crunch primarily affects people looking for credit – particularly homeowners, who may be faced with large arrangement fees or higher payments when they remortgage, and also those looking to obtain loans and new mortgages.

“People who aren’t reliant on credit, or homeowners who have a long-term fixed rate on their mortgage, may well have been largely unaffected – so far.

“But it’s now very possible that we will see the knock-on effects of the weak housing market combined with rising costs of living – higher unemployment, increasing amounts of people struggling to meet their comments, and more people facing problems with debt.

“Even if it does get to that stage, there are still things you can do. Seeking professional debt advice from an expert debt adviser is essential if you find yourself in financial difficulty.

“There are a range of debt solutions available to meet different situations, including debt management plans, IVAs (Individual Voluntary Arrangements), debt consolidation loans and remortgages, etc. One of these could be a lifeline if you find yourself with unmanageable debt, which is a growing threat in the current economic climate.”

IVA adviser warns of rising utility costs

2008-08-13T06:24:00.000-07:00

IVA adviser warns of rising utility costs

Following recent increases in utility prices, IVA experts DebtAdvisersDirect.co.uk (www.debtadvisersdirect.co.uk) warned of the probable impact on those already struggling to cope with higher living costs and record levels of personal debt.

Shortly after EDF Energy’s announcement of its decision to raise gas prices by 22%, British Gas owner Centrica announced an increase which would see the average gas bill rise by 35%, taking a ‘standard’ annual £650 bill up to almost £900.

“In itself,” said a spokesperson for DebtAdvisersDirect.co.uk, “this increase could be enough to push certain households into debt – or further into debt – but this is by no means an isolated instance. Today’s consumers are facing substantial increases across the board, from food and petrol to gas and electricity. The cumulative effects can be devastating: for many, there may simply be no way of finding another £227 per year, which works out to almost £5 per week.”

Zoe Mcleod of independent charity National Energy Action summed it up as follows: “Centrica is the second energy supplier to put its prices up. We expect this sequence to continue across all suppliers forcing more than 1 million households in England into fuel poverty. Across the UK fuel poverty could affect 6 million households by the end of the year.”

Despite British Gas’ reassurance that the increase would be postponed until April for the 340,000 customers who qualify for its ‘Essentials’ tariff, the effect on millions of other customers will be immediate. “With so many demands on their budget, consumers are facing some tough decisions,” the DebtAdvisersDirect.co.uk spokesperson continued. “They may feel forced to ‘juggle’ their debts using credit cards, or even to neglect some bills so they can pay others.

“As debt advisers with 15 years’ experience, we strongly advise against either course of action. However serious someone’s debts are, there are far better ways of handling them. The important thing is to seek expert debt advice – and to do it sooner, rather than later.”

In many cases, the right debt advice can help people cope with the extra strain on their finances: “Some people may be able to free up the necessary extra funds by learning to budget more effectively, or by renegotiating payments to their creditors. For others, however, no amount of debt advice will be enough – if their budgets are already stretched to the limit, they may need to look into professional debt solutions, such as a debt management plan or debt consolidation loan.

“In today’s economic climate, of course, the kinds of debt help available may be limited, as problems in today’s credit market are keeping some people from accessing the debt consolidation loans that could help them regain control of their finances. In cases like this, an alternative debt solution may be more appropriate.

“Debt management, for example, relies not on access to further credit but on negotiations between an individual’s creditors and the debt management professionals who ask them to accept lower monthly payments and grant other concessions. As always, we would recommend that anyone in financial difficulty seek professional debt advice as soon as possible.”

Use your money wisely

2008-07-29T08:09:00.000-07:00

In the current economic climate, it’s more important than ever to use your money wisely and secure your financial future. A recent study by Bankrate suggested that only 28% of Americans will retire comfortably, while 33% will only just get by financially.

Experts tend to agree that it’s advisable to have the equivalent of at least three months salary in savings – which should be enough to cover any gaps in employment or other unexpected events. However, it’s an advantage to save more than this if you can. The more you save, the better prepared you are for the future.

Savings tips
If you want to put your money into a savings account, it’s important to make sure your account is the right one for you. You can do this by following these tips:

1) Shop around. Like any business, banks and other providers are competitive, and they aim to give you a higher savings rate than you’d get elsewhere. The higher the interest rate, the more your savings will grow.

2) Pay attention to the terms. Banks and other providers may advertise high interest rates, but often these rates are only available to the highest savers, or they may be time limited. Many people prefer the peace of mind of a fixed-rate account, but you may end up losing out if other interest rates go up – so consider your options.

3) Save as much as you can. It sounds like a no-brainer, but a lot of people compromise on what they save to make room for non-essentials. Life would be boring if we only ever bought what we needed, but consider whether you could afford to save just that little bit more – later on, you will be glad you did.

4) Keep an eye on the market. So long as your savings account doesn’t tie you down to the same provider, it pays to shift your savings to another account with a better rate from time to time. Even if you do have a fixed deal, you should always look at what else is available when you come to the end of your terms.

Save or invest?
If you have a large amount of money and you’re wondering what to do with it, it’s worth considering investment as an alternative to savings. But both saving and investment have their advantages and disadvantages.

Saving is the safe option. You put the money into account, you earn interest, and your money grows. It’s that simple. However, the interest is limited to a certain amount, and it can often be years before you see real rewards.

Investment is risky, but potentially lucrative. Buying shares, for example, can yield massive returns if the company is successful. However, if the company struggles and share prices fall, you could lose some or even all of your investment – so do your research beforehand.

For more debt advice, visit DebtAdvisersDirect.co.uk

There's nothing wrong with debt

2008-07-17T07:56:00.000-07:00

There's nothing wrong with debt in itself. Without debts such as mortgages and car loans, we wouldn't be able to live our lives the way we want. But once we can't afford our debt repayments, it's time to ask for help, seeking expert debt advice or looking into professional debt solutions such as a debt management plan, debt consolidation loan / mortgage, IVA (Individual Voluntary Arrangement) or Trust Deed. The alternative could be doing something we'd normally never consider - like paying the mortgage (or other large debt) with a credit card.

According to housing and homelessness charity Shelter, about 85% of the UK's £1.4 trillion personal debt is secured against property. The good thing with secured debts, of course, is that they normally come with a lower APR (Annual Percentage Rate) than unsecured debts. Nonetheless, a mortgage is by far the biggest debt most people will ever have. It's a commitment to spend a long time paying a lot of money every month. If the mortgagor runs into any kind of financial trouble, it can be a huge burden.

Here's the scary part. In October last year, Shelter revealed that over a million people had been forced to pay their mortgage or rent with a credit card in the previous 12 months. Just eight months later, that number had quadrupled - published in June 2008, Shelter's 'Breaking point' report revealed that '4.1 million households (16%) used credit cards to help meet their housing costs in the last 12 months'.

Credit cards may seem like a good way to deal with a cash shortfall in the short term, but they're no long-term debt solution. "When someone pays a month's mortgage or rent with their credit card, they're not solving their debt problems - they're just putting them off," says a spokesperson for financial solutions company Think Money. "They'll have to repay that debt sooner or later, and the longer they leave it sitting on their credit card, the more they'll end up paying in interest."

What's more, any inability to pay essential bills like rent or mortgage could mean there's something seriously wrong with their financial situation in general. "Anyone in this situation should immediately review their financial situation and figure out where the problem lies. It could be that they can't really afford the mortgage / rent payments, or it could be that their other debts and expenses are simply taking up too much of their income. Unless they're certain that it's a short-term problem (caused by a one-off expense, perhaps) it's essential they take action to regain control of their finances."

The important thing is to act swiftly, but not panic and grab the first debt 'solution' that comes to mind, like using a credit card for this kind of debt payment. "Financial solutions companies like Think Money can help people find a much better answer to their debt problems. A debt management plan, IVA or Trust Deed could be a good way to reduce their monthly payments and regain control of their finances, but everyone's situation is different, so it's vital to seek debt advice from a company that offers a wide range of debt solutions."

Article Source: ezinearticles - written by Mel Taylor of Thinkmoney.com. For more information on debt - click here

IVA's for the Self Employed

2008-04-04T03:11:00.000-07:00

NancollasGreer, IVA specialists, are often asked if self-employed people do an Individual Voluntary Arrangement? The short answer is yes.

When IVA legislation was written in the mid 1980s it was intended that an IVA would be used as a rescue tool to preserve businesses, both sole traders and partnerships, who up until then only had bankruptcy as a method for dealing with debt. Back then no one anticipated that it would be used for dealing with consumer debt to the extent that it is today.

An IVA can be a suitable for the self-employed however it does often require a greater amount of preparatory work than a straightforward consumer IVA and many of the larger IVA "factories" will not be geared up to deal with anything other than a straightforward IVA. This is where a boutique firm like nancollasgreer (http://www.nancollasgreer.com/) come into their own. The legislation demands that an IVA must be administered by a licenced Insolvency Practitioner (there are about 1,300 who take insolvency appointments in the UK today). NancollasGreer Insolvency Practitioner, Sarah Nancollas, has over 22 years insolvency experience and has been undertaking IVAs since the legislation was first introduced and has a vast knowledge of IVA solutions for the self employed. Sarah Nancollas said "IVAs can be a really useful rescue tool for the self employed who, for whatever reason find themselves with debt problems, whilst running a viable business that has a future."

As HM Revenue and Customs are likely to be a creditors one of the first steps is to ensure that any late accounts or tax returns are brought up to date and filed with HM Revenue and Customs as soon as possible. As a creditor they will almost certainly vote on the acceptance or otherwise of an IVA proposal. H M Revenue and Customs have issued guidance notes which state that they will vote in favour of IVA proposals where:

An optimised and achievable offer is made to the creditors. Provision is made for payment of all future debts on time. All creditors within the same class are treated equally. There are no exceptional reasons for rejection. You make full and honest financial disclosure

The above are no different to the requirements of many lending institutes and most of the above are required by the legislation to form part of an IVA. Being self-employed you will need to demonstrate to your creditors, your ability to earn a living, with the use of up to date accounts. H M Revenue and Customs will take a dim view, probably opting to reject an IVA in the event of any of the following:

You have deliberately defaulted or had a past association with a continuing insolvency. You have operated a policy of withholding payment of Crown money. You have failed to meet obligations under a prior IVA. You have sought to exclude creditors. Any purchaser of the business who assumes responsibility for payment of some of your debts rather than paying that money to the general body of creditors. You have not brought all your tax and VAT returns up to date.

NancollasGreer feel that is it so important that people with debt problems get high quality professional advice before choosing a method to resolve their debts that they offer a free initial consultation. As part of the consultation NancollasGreer will review your financial position and discuss all options that are suitable for you. Their debt advice is tailored to the individual.

NancollasGreer are not just an IVA (http://www.nancollasgreer.com/)company. They advise on ALL options for dealing with unsecured debt and urge anyone with debt problems to seek urgent professional advice from a Licenced Insolvency Practitioner before entering into any form of debt solutions. "It is vital that you understand all of the debt solutions open to you and the implications of each one. There are just too many unqualified debt advisers out there today who will only advise you on the option that suits them" says Sarah Nancollas

Self-employed people that NancollasGreer has dealt with by means of Individual Voluntary Arrangement include; Builders. Couriers. Accountants. Surveyors. Solicitors. Financial Advisors. Florists. Physiotherapist Interior Designer Beauty Therapist Caterer Hairdresser Taxi Drivers. Engineer.

For and on behalf of NancollasGreer