Delta Debt Management & IVA Advice » Blog – Expert Opinion

£2,400 each to solve nation's debt management problems

Nathan Cameron — Fri, 11 Dec 2009 15:40:08 +0000

Each and every family in Britain will have to pay £2,400 to help cut the debt problems caused by the nation’s huge deficit.

This figure highlights the true extent of the financial pain that families across the land will have to face, according to the Institute of Fiscal Studies (IFS).

The think-tank predicts that even families from poorer backgrounds, who may be struggling with their own debt management issues, look set to see their living standards suffer as a result of the proposed measures to be introduced by Chancellor Alistair Darling.

To protect the “ringfenced” areas of schools, hospitals and the police force, there needs to be drastic cuts in other budgets – such as housing, transport, defence and higher education budgets.

Cuts of around 7 per cent a year, 20 per cent over three years, indicate the harshest squeeze since the Second World War, tougher than anything in the austerity years of the 1970s or early 1980s.

After three years some government departments will see their real-terms budgets cut by a fifth, with subsequent job and pay cuts inevitable.

This may mean that many people working within public sector bodies, or those providing services into the public sector, see their household finances squeezed as cut-backs and other budget cuts trim available cash.

Even in the NHS – where total overall hospital spending is protected – Health Secretary Andy Burnham conceded that there will be real cuts in some hospital and GP budgets, along with a pay freeze for doctors and a slash-and-burn approach to management.

Ivan Cooper, Chairman at debt help experts Chiltern, said: “Budgets across Britain look set to be streamlined, meaning many people will need to consider their own financial position more carefully – to prevent any serious debt problems from developing.

“For people already affected by the recession, independent debt advice from a reputable DEMSA affiliated provider – like Hamilton Locke or Chiltern – is usually beneficial.”

£2,400 each to solve nation's debt management problems is a post from: Delta Debt Management & IVA Advice

Highest fuel prices causing debt management problems

Nathan Cameron — Fri, 20 Nov 2009 15:58:23 +0000

Fuel prices are the most expensive they have been for a year, causing debt management worries for many people.

Following supermarkets raising their prices, the cost of petrol and diesel is now as high (if not higher) than oil giants such as Shell and Esso.

For the first time in over a year the average cost of diesel has shot through the £5 a gallon barrier, with petrol only marginally behind, according to motorist group the AA.

Over th elast month, supermarket chains like Tesco, Sainsbury and Asda – who are normally applauded for keeping fuel costs down – have raised the average price of a litre by by more than 4p.

This has meant that the monthly fuel cost of a car is now £3.98 higher for petrol cars and £3.26 for diesel, causing further strain on already overstretched household finances.

Ivan Cooper, Chairman at debt advice experts Chiltern, said: “Households have been under increasing pressure financially, as the recession and growing unemployment take hold.

“This impacts how much money is available each month, which can often mean that some loans and credit card debt payments aren’t met.

“Seeking debt advice from a reputable provider – like Hamilton Locke, The Debt People or Chiltern – can usually prevent this from happening, as an adequate budget is calculated and debts are prioritised accordingly.”

For immediate debt advice, or to learn more about a full range of professional debt management programmes, please call the number at the top of this page.

Highest fuel prices causing debt management problems is a post from: Delta Debt Management & IVA Advice

Avoiding debt problems this Christmas

Nathan Cameron — Wed, 18 Nov 2009 16:54:48 +0000

With Christmas approaching faster than a speeding train, almost five million people are still trying to get out of debts that they ran up last year.

More worrying is the news that around three quarters of Brits are short of money to pay for this year’s festivities, so could be walking into a further £8billion hangover.

The survey by Money.co.uk also shows that a third of us are worried about the overdrafts and credit card debts that this Christmas will bring, and only 15% of those questioned had made an effort to save up for the season’s spending.

As a result, 85% of people could end up developing serious debt problems if they overstretch themselves on their store cards and other credit streams.

Chris Morling from Money.co.uk said: “You have to worry about the effect all this last-minute spending will have in January.

“Many people are likely to be very short of cash going into the New Year – not a great start.”

Ivan Cooper, Chairman at debt management experts Chiltern, said: “In the current climate, taking on any more credit than you can realistically afford is a dangerous game.

“Yes, it’s nice to give presents and be part of the festivities, but more important is ensuring that once the dust has settled you can still afford to live happily.”

The best way to avoid debt problems around christmas is to take a serious look at your current debt management and see if you are spending more than you have coming in.

For people who are struggling with their debt management problems, a professional solution may help relieve debt stress immediately.

Reputable debt help companies, like The Debt People, Hamilton Locke and Chiltern, offer a number of professional debt solutions.

These include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs), Trust Deeds amongst others. Debt Management Plans, IVAs and Trust Deeds enable repayments towards multiple unsecured balances to be gathered into one manageable payment.

For immediate debt advice, or to learn more about debt management solutions, please call the number at the top of this page.

Avoiding debt problems this Christmas is a post from: Delta Debt Management & IVA Advice

Baywatch star reveals debt management problems

Nathan Cameron — Tue, 17 Nov 2009 15:34:58 +0000

Baywatch babe Pamela Anderson has revealed on TV that she has recently experienced debt management issues.

The American star confessed that she had failed to keep abreast of her financial affairs and had suffered in the recession as a result of a string of investments turning sour.

Anderson, who is infamous for blowing thousands (on her plastic), also revealed that the financial boob now means she is now living in a trailer with her two sons.

The former Baywatch star said she had invested millions of her fortune into her dream home but the project stalled halfway through when she ran out of money.

Despite taking great lengths to avoid it, “Pammie” will have to sell the property, due to cashflow problems.

She said to Jeremy Kyle: “I’m going to sell it. I hate it. People commit suicide over constructions. Relationships break down over constructions and I can see why. It rips your heart out.”

Ivan Cooper, Chairman at debt advice experts Chiltern, said: “Despite falling into debt management troubles, Pamela Anderson is still quite lucky that she can command a sizeable wage.

“Unfortunately many ‘normal’ people who experience such financial heartache aren’t so lucky, and they need impartial advice to get out of debt.”

Fortunately Ms. Anderson’s debt problems should be solved once her Mailbu home has been sold, as it is valued at around £3m. It was bought for approx £850,000.

Baywatch star reveals debt management problems is a post from: Delta Debt Management & IVA Advice

Loan sharks causing debt management problems for housing association tenants

Ivan Cooper — Wed, 04 Nov 2009 16:40:18 +0000

Housing associations have reported that loan sharks are causing debt management problems for some of their poorest and most vulnerable tenants.

Community Housing Cymru (CHC), which represents housing associations in Wales, is launching a specific campaign to raise awareness with their tenants and warn them about borrowing money from potentially violent and intimidating lenders.

Loan sharks target the association’s tenants as they are moving into their properties, and offer them assistance to be able to buy new washing machines, fridges and freezers. However the lenders then make it virtually impossible to repay the loan by charging interest rates of over a thousand per cent, threatening the debt management of many borrowers.

Nick Bennett, chief executive of CHC, said: “Tenants have been threatened, intimidated, some have even considered suicide because of the impact that these loan sharks have had in charging exorbitant rates and then demanding the money back.”

“There’s certainly evidence that loan sharks do target our tenants.”

He estimates that approximately 15,000 people each year use loan sharks to borrow money, while another 150,000 borrowed money from doorstep lenders, who charged interest of up to 200%.

People who are struggling to keep up with their debt repayments will often pay the ones who “shout the loudest”, ignoring debts of a higher priority, such as mortgages or secured loans.

The threats and intimidation used by loan sharks can often be extremely stressful and embarassing, as many use these as a way to extort money – which only causes debt problems in other areas as mortgages etc go unpaid.

By using a reputable debt management company, like Chiltern, debts are prioritised and budgeted for accordingly – making finances simpler as only one payment is needed each month to cover all unsecured debts.

What’s more, contact with all unsecured creditors – including doorstep lenders – are dealt with on the client’s behalf, with interest and charges negotiated to try and have them reduced or stopped.

Loan sharks causing debt management problems for housing association tenants is a post from: Delta Debt Management & IVA Advice

Formula 1 Loses Toyota due to Financial Problems

Ivan Cooper — Wed, 04 Nov 2009 09:57:41 +0000

It has been confirmed by Toyota that despite signing the concorde agreement to race earlier this year that they will not be racing in 2010. Toyota had delayed officially announcing one way or the other until last weeks board meeting at head office in Japan. The decision is due to the parent company posting its worst financial loss since it began trading.

Akio Toyoda, Toyota president announced that there was no option but to withdraw due to “current severe economic realities“. The decision has come only a year after the other Japanese team Honda announced that they were leaving the sport due to financial difficulties. In the 2009 season Honda were replaced by Brawn GP, who clinched both the constructors and drivers titles in the seasons penultimate race in Brazil. We will have to wait and see whether the replacement team for Toyota, which is expected to be a return by Sauber following them being given a provisional 14th spot by Bernie Ecclestone earlier in the year, can emulate this impressive debut performance.

Toyota have struggled to perform since they entered the sport in 2002, despite having some of the most renowned drivers in the paddock over the years including Ralf Schumacher and Olivier Panis. In 139 races, they have never collected a race win, however, things had been looking up for them this season with two 2nd places and finishing 5th behind Ferrari.

Difficult Times for Japanese Motorsport

Japan has been heavily involved in motorsport over the last decade which has created many opportunities for us to enjoy their talent for engineering and driving. This appears to be at an end now with Honda and Toyota pulling out of F1, Toyota pulling out of hosting F1, Subaru and Suzuki withdrawing from World Rally Championship and Kawasaki out of MotoGP.

To make it worse, Williams has announced that it will be getting their engines from Cosworth in 2010 and Japanese tyre company Bridgestone will not renew their contract to supply Formula 1 after the 2010 season ends.

As a huge fan of motorsport, I feel it is a great shame to see such talent as Glock, Trulli and even Kobayashi stranded with no guarantee of a drive next year. I hope that they will be able to get their finances in order

Formula 1 Loses Toyota due to Financial Problems is a post from: Delta Debt Management & IVA Advice

Should Debt Management be Taught in Schools?

Ivan Cooper — Tue, 27 Oct 2009 16:42:48 +0000

Debt management has become a household concept in recent times, but some people are more concerned about when it stopped being something we think about. Wirral Citizens Advice Bureau hosted a debate on debt under the leadership of Esther McVey who is a prospective Conservative MP for Wirral West this week. The strongest point made was that coping with debt and managing money should be taught in schools.

Ms McVey answered questions alongside the CAB on the best ways to get out of high levels of debt. The CAB got involved due to the severe strain they have been under as the call for them to help with debt issues rose 12% year on year. They have been running group training sessions during the evening to help with the demand.

The panel included Teresa Perchard the CABs Policy Director, her key theme throughout the meeting was a call for financial education in schools.

Ms McVey said: “Organisations like the CAB are under extra strain during the recession each man, woman and child already has £22,500 of government debt, and with personal debt at an all time high there needs to be strict measures in place to tackle this crisis.”

During the year the CAB saw a 114% increase in enquiries related to redundancy and another 50% rise in enquiries about secured finance. Recent CAB profiling showed average debts of £16,971 yet the estimated average timescale for paying this off would be 93 years at an affordable rate. The study showed the most significant reasons for debt levels were over-commitment, low income, job loss or disability/ illness. Those debt problems were shown to have been compounded by poor financial skills, irresponsible lending and of course, the increase in cost of living.

Should Debt Management be Taught in Schools? is a post from: Delta Debt Management & IVA Advice

Half-term debt management worries scupper spending

Ivan Cooper — Mon, 26 Oct 2009 15:51:17 +0000

Spending on keeping children entertained during the half-term holidays looks set to drop this week, after a poll revealed that many families plan to spend less than last year amid wider debt management worries.

The current economic recession has forced parents to tighten their purse strings and spend less on entertaining children during the half-term holidays, as they worry about the debt problems they may be left with.

Findings from the OnePoll study revealed that parents budgeted to spend on average £92 for trips out and other treats this week, less than half of the £185 from the same time last year.

Many parents have expressed that they intend to make other cut backs in order to fund the entertainment of their children this week with 27 per cent giving up eating out, 25 per cent not buying new clothes and 23 per cent cutting back on the weekly food shop.

The research, on behalf of Moneysupermarket, also found that 61 per cent of families planned to use discount vouchers to reduce their spending.

Sian Harrison, from moneysupermarket.com, said: “Despite the tightened purse strings, parents are not letting kids go without this half term.

“By using (discount) vouchers, parents can save up to 50 per cent on restaurants and popular attractions like Alton Towers and Chessington and still have a fun day out with all the family.”

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “The added strain of household budgets caused by having to entertain children for a week can sometimes unbalance finances, so parents need to budget carefully to ensure they do not overstretch themselves.

“By seeking special offers and discounts that are available, debt problems can be avoided, however don’t be tempted to splash out and build up a large credit card debt.

“Spending in this way can create a higher risk of developing future debt management issues, as the debt still needs to be repaid and interest and charges can make it an expensive way to borrow.”

Half-term debt management worries scupper spending is a post from: Delta Debt Management & IVA Advice

Postal strike causes debt management mayhem

Ivan Cooper — Thu, 22 Oct 2009 15:48:39 +0000

The postal strikes look set to cause chaos for the debt management of millions of people, as payments towards store cards and credit card debts arrive late.

Industrial action taken by workers at the post office means that for many people, repayments towards their consumer debts will arrive late and they will receive fines and punitive action as a result.

Two-day strikes planned by members of the Communications Workers Union (CWU) look set to cause even further chaos than planned, as only a few hundred of the 30,000 temporary workers employed to plug the gap will be able to start work.

Barely a quarter of those hired will be allowed to start work next week, as most of the temporary workers have not been fully vetted – so cannot handle mail – which means that more debt problems may arise than first thought.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “Many innocent people will be affected by the industrial action of the postworkers, especially those who are trying to get out of debt.

“Late payments usually carry a punishment from lenders, and these strikes could mean that many people who are struggling with debt problems get even further into financial trouble.”

The strikes are over postal worker’s pay, working conditions and the modernisation of the business.

Steven Reid, Birmingham district branch of the CWU, said the way workers had been treated by Royal Mail was “appalling”, adding: “People are saying we are against modernisation but we are not. More than 60,000 jobs have gone from this business in the last five years in agreement with the union.

“That’s not a union against modernisation. What we want to do is get Royal Mail fit for the 21st century, but it’s got to be through agreement, not dictatorship or imposition.”

For people who are worried that their debt problems may be affected by the postal strike, you should seek impartial debt advice from a reputable organisation.

Reputable debt help organisations include Hamilton Locke, Chiltern and The Debt People.

For immediate advice on debt management and a range of professional debt solutions, please call the telephone number at the top of this page.

Postal strike causes debt management mayhem is a post from: Delta Debt Management & IVA Advice

Debt management prevents mental health problems

Ivan Cooper — Tue, 13 Oct 2009 14:36:25 +0000

According to latest research, people who are struggling with their debts should consider debt advice to avoid mental health problems from developing.

The study by the Royal College of Psychiatrists and Rethink, revealed that half of British adults struggling with debt problems are also potentially dealing with a mental health issue.

Their findings suggest that by seeking debt management sooner rather than later, the impact of debt management problems can be minimised and safeguard a person’s mental health as well as their finances.

Professor Dinesh Bhugra, President of the Royal College of Psychiatrists, said: “Research and clinical experience tells us that the more debts people have, the more likely they are to have a mental health problem.”

So by controlling an individuals credit commitments through implementing debt advice techniques, it could help to stave off any mental health problems.

Director of public affairs at Rethink, Paul Corry, said: “People with mental health problems sometimes have particular issues with money as a result of their illness.
Actor, comedian and writer Stephen Fry has welcomed the study, saying that it will lead to more appropriate mental health and debt advice.

“Those who are working may lose their jobs suddenly if they become unwell, while others who live on state benefits may not have the funds available to cover one off costs. A quarter of people who have a mental illness will be in debt.”

Mr Fry, a well-known sufferer from a mild form of bipolar disorder, said that his condition has often caused him to “go on many giddy spending sprees”.

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “People are often in a vulnerable state when they have developed debt problems, which is why consumer codes – like the DEMSA code – ensure that these issues are recognised and adhered to.

“This ensures that the debt management advice that someone receives is suitable for them – not the company that is providing the advice – which is why the Office of Fair Trading have accredited DEMSA’s members.”

Debt management prevents mental health problems is a post from: Delta Debt Management & IVA Advice

Low interest rate helps 100,000 people's debt management a month

Ivan Cooper — Fri, 09 Oct 2009 09:21:41 +0000

Around an extra 100,000 homeowners are benefitting from the lowest interest rates in history, as their mortgage debt management is eased following the end of a fixed-rate term.

According to the Council of Mortgage Lenders (CML), 42% of existing mortgage-holders are still enjoying a fixed rate deal.

For those whose introductory rate has come to an end, usually after a two- or three-year fixed rate arrangement, they will have switched onto the lender’s standard variable rate (SVR).

Whilst normally, this would strain the debt management of many households fortunately 100,000 people a month are now enjoying some of the lowest ever SVRs.

CML figures revealed that for those people able to secure a mortgage, home loans have been at their most affordable since March 2004.

Mortgage borrowers in July were only spending an average 12.7% of their income on interest payments, compared with 18.1% for loans secured a year earlier, making the debt management of their mortgage far easier.

However, as interest rates rise and with news that household energy bills may increase to around £2,000 a year the finances in many homes may be stretched to the limit causing serious debt problems for the ill-prepared.

Ivan Cooper, Chairman at debt advice organisation Chiltern, said: “We are enjoying historically low interest rates at the minute but these won’t last forever.

“As they inevitably rise, and living costs get higher with inflation, more people will need to seek debt advice to be able to cope with their growing debt problems.

“As soon as anyone feels they may not be able to maintain any credit payments they should seek impartial debt advice from a reputable debt help provider – as there are always more options to get out of debt the earlier action is taken.”

Reputable debt help providers include The Debt People, Hamilton Locke and Chiltern – who all offer free debt advice.

In many circumstances they will be able to relieve debt problems by providing simple budgeting and debt advice, however in some cases a professional debt solution may be necessary.

Professional solutions include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds.

If a professional debt help solution is recommended, following initial debt advice, the amount that you have available to repay towards your unsecured balances will be calculated. This involves working out your household income and then taking away your monthly living costs – i.e. rent/mortgage, food, travel to work, council tax etc.

The remaining amount is classed as your “disposable income”, and is a realistic reflection of how much you can afford to repay towards the people you owe money to.

With professional solutions, like a debt management plan or IVA, this disposable income is paid to the debt help provider who then distributes it amongst your creditors on a pro rata basis.

This makes managing your outstanding unsecured balances easier, as you only need to make one payment each month which covers all of your accounts.

On a debt management plan, payments towards your debts are rescheduled over a longer period of time to make them more affordable. Debt management plans are flexible and informal – which means that if your income drops your monthly payment can be changed to reflect that. Likewise, if your situation improves you can increase your monthly payment and repay balances in a shorter period of time. Debt management plans can be used as and when required, as there is no legally binding contract involved. So when you no longer need your debt management plan it can be cancelled. Your debt help provider will also try to negotiate reduced or frozen interest and charges on your accounts, to reduce the overall amount owed.

An Individual Voluntary Arrangement (IVA) works in much the same way, as all outstanding unsecured balances (personal loans, overdrafts, store cards, catalogues, credit card debts etc) are gathered into a single monthly payment – which is paid and distributed by your debt help provider.

However with an IVA, a legally binding contract is drafted by a qualified insolvency practitioner – who will provide debt and IVA advice throughout the IVA term. This contract ensures that you are protected from your creditors changing their payment demands or terms to the agreement. As long as payments towards the IVA are maintained, you cannot have any further legal action taken against you – so you can’t be made bankrupt or face court proceedings.

With IVAs, debts are repaid over a fixed period of time (typically within five years), after which time all remaining unsecured balances are written off. Plus, once the IVA has been agreed all further interest and charges will stop being added to your accounts.

Trust Deeds are effectively the same as an IVA, but for people living in Scotland. These are also repaid over a fixed period of time, but this is usually within three years.

With debt management plans, trust deeds and IVAs, contact with creditors is done via your debt help provider – so demand letters and calls from creditors should stop.

For immediate debt advice, or for further information on debt management plans and IVAs, please call the number at the top of this page.

Low interest rate helps 100,000 people's debt management a month is a post from: Delta Debt Management & IVA Advice

Death bed debt problems

Ivan Cooper — Wed, 09 Sep 2009 09:26:10 +0000

There may be a few more people who leave behind a death bed full of debt problems, as the average cost of dying soars to over £7000.

According to a recent survey, the cost of an average death has risen to £7,098 this year and is anticipated to rise again over the next five years by 33 per cent.

Along with getting over the loss, many families may find that shouldering the financial burden of a close one’s death may be too much to bear, and the repercussions on their debt management could be severe.

Research suggests that whilst the cost of a “standard” UK funeral has increased by 7.2% to £2,733, additional “hidden” extra costs like the hiring of a venue, catering and flowers etc. can push the total amount much higher.

Debt advice organisations have already spoken out about the impact this could have on people’s debt problems.

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “Not only does it take time to get over the loss of a loved one, but now it could take years to get over the cost – especially if you rack up credit card debts or other such balances to pay for it.

“For many people, planning ahead and putting a little away could help cushion the blow, but for those already with debt problems the issue is virtually impossible.

“When your debt management issues start causing you grief, it’s best to seek impartial debt help from a reputable debt advice organisation.”

Reputable debt advice organisations include The Debt People, Hamilton Locke and Chiltern. All offer free and impartial debt advice.

In certain circumstances they could even recommend a professional debt management solution – like a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA) etc – to help you get out of debt.

For further information on debt management solutions, or for immediate debt help, please call the number at the top of this page.

Death bed debt problems is a post from: Delta Debt Management & IVA Advice

Debt advice specialists swamped

Ivan Cooper — Mon, 07 Sep 2009 09:27:32 +0000

According to figures released by the Bank of England, UK citizens owe around £233 billion on overdrafts, personal loans and credit card debt. Debt advice agencies are struggling to cope with the demand, for their services, from hard up consumers.

Since the start of the credit crunch, and the recession that followed, many people have been faced with the prospect of losing their job, or their home, and so it is hardly surprising that now they may be starting to take their debt problems more seriously. According to Chris Pond, head of financial capability at the FSA (Financial Services Authority), debt advice specialists have been “swamped with a tidal wave of cases”.

Waiting lists for advice have increased over recent months, and some consumers are forced to wait several weeks before they can get an appointment to see an adviser. None of the organisations that provide debt advice on a face-to-face basis have the capacity to deal with the numbers of enquiries that are coming through the door.

The government has invested more money in debt advice services, and the Citizens Advice Bureau has extended its hours of operation in an effort to deal with the numbers involved. They have also provided leaflets that are designed to work on a self-help basis, and so relieve the pressure on the advisers.

Many of the people seeking advice have never had debt problems before and are looking for help for the first time. This is usually because their difficulties have been caused by a major change in circumstances, such as redundancy, as appose to simply spending too much money.

Debt advice specialists swamped is a post from: Delta Debt Management & IVA Advice

More debt advice may be needed as Brits can't understand bills

Ivan Cooper — Thu, 03 Sep 2009 09:28:51 +0000

The number of people in Britain who may need to seek debt advice could increase, following research that reveals their inability to understand household bills.

According to a report by comparison website uSwitch.com, only one in seven people (14%) could successfully add up a bill from an energy company, despite being allowed the use of a calculator.

This inability to calculate household finances could have widespread effects, such as being overcharged for services or not knowing that debt problems are developing, which has caused many debt advice organisations to express concern.

A spokesperson for uSwitch.com, said: “You shouldn’t need to be an ‘A’ grade student to be able to understand your energy bills. It’s deeply worrying that only 14 per cent of people have passed what should be a straightforward test.”

With many household expenses increasing in cost recently, it’s even more important than ever to ensure that household finances are budgeted accordingly, with enough put aside for debt management issues.

As the recession has deepened, more people are experiencing debt problems as a result of their poor debt management. This has been enphasised by the increased number of redundancies and shortage of jobs – with many companies shedding jobs.

As people’s finances are stretched even futher, many are resorting to pay for their household gas and electricity bills with their plastic – amassing quite large credit card debts in the process.

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “The risk of overstretching yourself, and developing debt problems, is increased if you develop large overdrafts and credit card debts each month by paying for everyday living costs in this way.

“If you are gradually going further and further into the red each month, the best way to get out of debt is to seek impartial debt advice from a reputable organisation. These will be able to alleviate your debt problems by recommending the best solution for your particular situation.”

Reputable debt help organisations, who specialise in providing free debt advice, include The Debt People, Hamilton Locke and Chiltern.

These will be able to assess your circumstances quickly and offer a range of ways to get out of debt – i.e. by offering simple budgeting and debt advice, or by recommending a professional debt help solution.

Professional solutions include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds amongst others.

A Debt Management Plan (DMP) is an informal agreement between you and your creditors. It involves working out how much you can realistically afford to repay towards creditors, once your living costs have been accounted for.

Debt management plans simplify finances, as one monthly payment covers all repayments towards your unsecured balances (personal loans, overdrafts, store cards and credit card debts etc). Reputable debt advice organisations should also be able to negotiate on your behalf to reduce or freeze the interest and charges to your accounts. Debt management makes the payment of balances more affordable, as repayments are scheduled over a longer period of time. However, if your situation improves you can increase your monthly payment amount to repay debts quicker.

An Individual Voluntary Arrangement is a solution for people in financial difficulty and offers an alternative to bankruptcy or informal arrangements (i.e. Debt Management Plans). An IVA requires a legally-binding agreement between a you and all of your unsecured creditors. As long as you maintain your payments towards the IVA, you are protected from any further action by creditors.

This means that you cannot be taken to court or made bankrupt, and creditors cannot recover any more money than agreed under the terms of the contract. IVAs are repaid over a fixed period of time (usually within five years) after which time all remaining unsecured balances are written off.

For immediate debt advice, or for further information on debt management plans and IVAs, please call the number at the top of this page.

More debt advice may be needed as Brits can't understand bills is a post from: Delta Debt Management & IVA Advice

Pensioners coping with debt management for kids

Ivan Cooper — Thu, 27 Aug 2009 09:29:45 +0000

Handouts to children have meant that around 1.3 million pensioners are having to cope with debt management issues, as they are still paying off their mortgages and credit card debts.

As increasing numbers of pensioners are forced to give handouts to their adult children, one in six pensioners still finds themselves trying to get out of debt.

A survey by Scottish Widows, found that some 1.3 million retired people still have a home loan, and the amount they have outstanding rose by a fifth in the last year, meaning for many that debt problems continue.

The study also found that the budgets of about 630,000 of these pensioners were being stretched even further, by grown-up children who were still reliant on the bank of mum and dad for cash.

This financial assistance comes in the form of help towards education costs, deposits for property, or allowing the children to live at home rent-free.

Parents are resorting to eating in to their savings which they had set aside to pay off home loans, with some even increasing their mortgages to release cash for their children.

Also as a result, a third of pensioners now find themselves with outstanding personal loans and credit card debts – owing on average £7,344 each.

This is higher by nine per cent than the same time last year, and is up by almost 25 per cent from 2007.

Pensions expert, Tom McPhail, said: “People simply are not making adequate provision for their retirements.

“These figures demonstrate the difficult decisions that parents have to make. They may have scrimped and saved for most of their life, but then they have to choose between sending their child to university or helping them buy a house, at the expense of having a comfortable retirement yourself.

“Frequently it will mean that these savings are stripped away leaving them with nothing to pay off their own mortgage before they retire.”

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “Pensioners are feeling the strain because their children, who may have grown up, are still relying on them for money.

“But the trouble for the retired, is that they have no means of rebuilding their savings once they have gone, and any unsecured balances they may build up are potential debt problems waiting to happen.

“Increasingly we have seen that in an effort to help out their children, pensioner parents have developed their own debt problems and have needed to seek impartial debt help.”

Debt help organisations offer a number of ways for people who are struggling to maintain their unsecured balances, which are alternatives to bankruptcy.

Often, many debt problems can be sorted out with some simple budgeting and debt advice, whereas in other cases a professional debt help solution may be necessary.

Professional debt help solutions include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds amongst others.

The remaining amount is classed as your “disposable income”, and is a realistic reflection of how much you can afford to repay towards the people you owe money to.

With professional solutions, like a debt management plan or IVA, this disposable income is paid to the debt help provider who then distributes it amongst your creditors on a pro rata basis.

This makes managing your outstanding unsecured balances easier, as you only need to make one payment each month which covers all of your accounts.

However with an IVA, a legally binding contract is drafted by a qualified insolvency practitioner. This ensures that you are protected from your creditors changing their payment demands or terms to the agreement. As long as payments towards the IVA are maintained, you cannot have any further legal action taken against you – so you can’t be made bankrupt or face court proceedings.

Trust Deeds are effectively the same as an IVA, but for people living in Scotland. These are also repaid over a fixed period of time, but this is usually within three years.

With debt management plans, trust deeds and IVAs, contact with creditors is done via your debt help provider – so demand letters and calls from creditors should stop.

For immediate debt advice, or for further information on debt management plans and IVAs, please call the number at the top of this page.

Pensioners coping with debt management for kids is a post from: Delta Debt Management & IVA Advice