Whilst ex-workers at car makers MG Rover were toiling over their debt management issues, bosses handed themselves a multi-million pound remuneration package, a new report has revealed.
The Phoenix Four along with Chief Executive Kevin Howe, are believed to have rewarded themselves with around £42 million in pay and pensions, after buying the troubled car brand from BMW.
Within five years of their takeover MG Rover had collapsed, leaving 6,000 people without a job and many in need of debt help.
Despite threatening the livelihoods of so many people, the directors apparently rewarded themselves with salaries and pensions topping £9 million pounds each.
Debt help organisations suggest seeking impartial debt advice to combat any debt problems that may have been triggered by the loss of a job.
Ivan Cooper, Chairman at leading debt management company Chiltern, said: “When faced with rising bills and a shrinking income, many people bury their heads in the sand and hope their debt problems will go away.
“There are more effective ways though to regain control financially and repay debts but at a more affordable level.
“By seeking advice from an impartial debt help provider, most debt problems can be controlled and eventually cleared.”
Reputable debt advice organisations, such as The Debt People, Chiltern and Hamilton Locke, can provide immediate debt help and support to people who are struggling with their unsecured balances (personal loans, overdrafts, store cards and credit card debts etc).
Some of the professional debt help programmes that can be offered include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds.
A Debt Management Plan (DMP) is a professional debt help solution that simplifies your finances, by enabling multiple unsecured balances to be repaid with a just one affordable payment each month.
All payments to personal loans, overdrafts, store cards and credit cards etc can be gathered into one monthly payment, which is then distributed accordingly to creditors on a pro rata basis by the debt advice company.
Payments towards these balances are then rescheduled over a longer period of time to make them more affordable. The monthly payment remains manageable for you throughout the term of the Debt Management Plan, as it is based on how much you can afford after living costs have been accounted for.
This means that if your wages are lower than before, the monthly payment can be lowered too. Similarly if your wages increase your payment can be raised to help you pay off balances quicker.
An IVA is a professional debt help solution for people with debt problems over £13,000, that requires a legally binding arrangement between you and the people you owe money to. Because of this it requires a qualified Insolvency Practitioner to provide IVA advice and support, along with drafting your IVA proposal.
This agreement protects you from creditors changing their payment demands or breaking the terms of the agreement.
An Individual Voluntary Arrangement (IVA) works in a similar way to a Debt Management Plan but is repaid over a fixed term – normally within five years. After this time, all remaining unsecured balances are effectively written off and you walk away debt free.
Business Secretary, Lord mandelson, said that legal action was already underway to try and prevent the directors from holding company office again.