UK Debt Helper

Wonga branded ‘morally offensive’

2012-01-25T07:00:00.000-08:00

This Article Was Removed from Wonga Site On 19/01/2012
Wonga a payday loan firm has caused outrage by encouraging student to help fund their studies by taking out one of their very expensive loans.

This is a trick from Wonga and anyone who falls for it could find themselves in mountains of debt. It is far wiser to keep to more traditional borrowing.

The firms (APR) annual percentage rate is 4,214% typically, and a £300 loan paid back within 20 days would cost £65 in fees, if repayments are late the fees can be huge.

In comparison a student loan has an (APR) of 1.5% though this may not be a fair comparison as a payday loan is meant to only be short term not annually.
Wonga said on its website: "A student loan is fine to help you pay for your university and living costs, but what about those times when you're waiting on money to come in and you need to buy or pay for something unexpected now?
"There's a totally new way of borrowing money to see you through until your next cheque and it's called Wonga.

"A Wonga loan is essentially a short-term loan that can help you manage your cash flow, without having to extend an overdraft or credit card even further, or get a large student loan."

Are they not aware that many students do not have a pay cheque coming? And surely this must be encouraging students to get even deeper in debt..

Surely This Is Wrong

Wonga were asked to remove this from their page. They said they had put it there for SEO purposes rather than to target students.

They would do this so they would appear high in search engines when people on the web were looking for student loans.

With student loans you only need to repay them when you earn over £15, 000, 00 and you repay in proportion to your income. There are no debt collectors and it does not go on your credit file.

The interest rate on a student loan will never be higher than the rate of inflation". Compare that to the 4,214% Wonga charges.

Nobody should sell high priced credit to Students.
There is no financial education in schools and as a nation we are in enough financial difficulty without encouraging even more .
Wonga took this off their site 0n 18/01/2012 let’s hope no students were taken in by it.

Staff at British gas suffering abuse from public over energy costs

2012-01-25T06:58:00.000-08:00

British Gas Managing director Phil Bentley has admitted his staff are facing the brunt of public anger from people struggling to pay their gas and electricity bills.

The company boss admitted his staffs was being deluged with increasingly aggressive complaints about rising energy bills. Workers on the road have also been the target for abuse in recent times.

The groundswell of anger has increased substantially as British Gas continues to refuse to pass on the reduction in the wholesale gas price to its 9.2 million customers.
Since the wholesale price of gas has dropped 9.4% it has come as a surprise to many that British Gas has not reduced bills to their customers for gas although they have reduced their electricity bills by 5%.

Phil Bentley admitted in a staff email:”We have seen a groundswell of anti-British Gas comments, with increasingly aggressive tones. All our call centres are under extreme pressure from more angry customers struggling to pay bills”
Rather surprisingly the Managing director points the finger at the media for customer anger by claiming they have exaggerated the price increases customers are experiencing.

His email continued: “There is no doubt in my mind that the energy industry is facing a crisis-a crisis of affordability, a crisis of investor confidence, a crisis of relentless media criticism, in short a crisis of trust”.
It is to be hoped that British Gas bow to public pressure and gives their customers a much needed reduction in their gas bills sooner than later.

True Story: Being In Debt

2012-01-13T03:28:00.000-08:00

I don’t like telling my story, embarrassment, shame or worse still that look of pity that glares back at me. That’s why I found making a telephone call a lot easier there would be no looks just a voice.

How have I got here, a few years ago my life was so different I was married, 2 lovely children a beautiful home. The holidays were great any less than two a year and I would grumble, the restaurants I would frequent were varied and often and I never left without giving a generous tip. I kept myself trim at the gym and enjoyed the friendships I made within this world. My car was my hobby new one every two years I kept it immaculate, the children drove me mad when I saw them entering any of my vehicles with sweets!

So why am I here? When asked the reason I am in this situation what is the correct answer? When my business collapsed I wasn’t scared, it wasn’t my fault the economy has affected a lot of people, spending cuts meant my company which was selling handmade designer furniture was no longer a priority. It was a LTD company so this meant I was not personally liable for the debt I would walk away, I could start again, I had started a business before there was nothing to say I couldn’t do it again. I had my savings they would keep all the bills paid till I began my new venture.

I never thought of my mortgage as a debt more of an investment, I never thought that technically I didn’t own my house the bank did! For me credit cards were wonderful you got what you wanted when you wanted it then pay it when your wages came in no problem. I had been brought up in a generation when credit was how we all lived we were taught buy now pay later. The occasional personnel loan had helped, my wife had been desperate for that conservatory and the kitchen was unique.

The savings didn’t last long and the pressure was immense the arguments at home grew more intense. I don’t remember who said what but I do remember that feeling of utter despair as I walked out the door with my worldly belongings in a case. It wasn’t amicable our divorce, the house was sold with negative equity. We fought over everything the biggest losers as is in most cases were my wonderful children.

Today I am one of millions claiming jobseekers allowance, living in rented accommodation and trying to survive never mind repaying the debt.

If I could help anyone it is to say always think twice when getting credit you do have to pay it back.

If you have a debt problem UK Debt Helper is not an advice agency. We advise you speak to a free debt advice charity such as Debt Support Trust or the Citizens Advice Bureau.

Time for a financial health check

2012-01-12T07:22:00.000-08:00

With finances being stretched as never before many of us will be putting household, leisure and entertainment expenditure under the microscope in 2012.

The family of parenting institute has warned that the average income of households with children will fall by 4.2% between 2012-2016.This equates to a drop in household income of £1250 per year.

For many households this will mean cut backs have to be made in order to square the household budget. For some households this will mean luxuries like gym membership, full Sky package or private healthcare will have to be trimmed or cut out completely.

One useful way to give your finances a health check is to break down your bank statement and credit card bill to help identify where your money goes on a monthly basis.

Priority debts are exactly that and must be paid before other expenses are taken into account .Priority debts would include expenditure like mortgage, rent, council tax and utility bills.

Having deducted priority debts from salaries etc you are left with disposable income to cover food, loans, credit cards etc.This will then give a clear picture to your household financial health.

If there is insufficient money to repay personal loans or credit cards etc then it is probably time to seek advice from a debt advice organisation in order to help identify all appropriate solutions available.

Even if your income and expenditure balance it is worthwhile looking carefully at your expenditure to ensure you are getting the best value for money possible. Utility company tariffs vary considerably for instance and using a comparison website like USwitch could make substantial savings to your energy bills with very little effort on your part.

In summary, as peoples financial belt has to tighten make sure you are getting best value for every pound you spend and where you can get debts down as fast as possible or ideally become debt free.

Bankruptcy in Scotland

2012-01-12T07:18:00.000-08:00

When you here the term "Sequestration" what it means is bankruptcy if you reside in Scotland. To avoid sequestration, a wise option for you could be a protected trust deed.
While in a trust deed, you voluntarily transfer all your assets, to a person named your trustee who will use all your assets to pay off your creditors. Put simply it enables you to pay back your debts in an agreed period of time. You make one monthly payment to your trustee this is an affordable amount to you, and after the agreed time any remaining debt is written off.

The amount you pay depends on your circumstances and will last for approximately 36months.

All trustees must be a qualified practitioner. They are regulated by law and must be members of an approved governing body.

You need to know:

What you are going into, you are going into a contract to pay back your debts, normally at a reduced rate. Because of this you agree to the below:
1 You must do what the Trustee asks.
2 You must pay the agreed monthly contributions.
3 You cannot take any further credit
4 If you receive any money more than £200 you must inform the trustee.
All interest and charges will be frozen on the day off signing the Trust Deed.

The Good News About A Trustdeed.

1 The trustee will handle all queries from your creditors, so no more phone calls or fear of answering your door.

2 It is made to help so will be affordable and can be more flexible compared to sequestration.

3 It also does not take away all right to hold certain public offices, which is the case in sequestration.

4 It can be possible for some companies to continue trading and some individuals can retain their directorship.

5 The fact you enter a trust deed is not published (unlike sequestration).

Always make sure you know all the facts before you sign.

Entering a trust deed is not to be taken lightly – know all the facts before you sign.
Before you sign anything, seek advice preferably from a charity get them to explain what happens and talk you through the process, make sure you know all your options and choose the best option for you.

Trust Deed Scotland or Sequestration?

2011-12-19T08:33:00.000-08:00

Should i enter a trust deed or opt for sequestration?

For people who find themselves with acute financial difficulties and mounting debt problems often the solutions available can be daunting. Dependant on the severity of the problem this may result in sequestration (Scotland) or bankruptcy (rest of the UK), this solution is the most extreme and damaging to an individual who selects this route. In this solution your details with be published in a national paper and your information regarding the sequestration can be found with relative ease on the internet. Any assets you have will most probably be sold in order to realise money to pay towards your debts. This is often a most traumatic experience for a person going through this solution and should only be taken when no other option is suitable. This solution would also force through the sale of your property if you own one and if it had equity within the property, again an unpleasant and traumatic experience to be avoided. This solution also has the most damaging impact of all to your credit rating and will take many years to fully recover. This is because you have defaulted on your loans and been unable to make an acceptable monthly payment to your creditors over a period of time as would be the case within a protected trust deed. As with any debt solution qualified professional advice should always be taken before entering a solution and this is certainly the case with sequestration/bankruptcy. There are also limitations as to positions and jobs you can hold for instance you are not permitted to be a company director whilst you are bankrupt.

Scottish Trust Deed

A Scottish trust deed is another debt solution for people living in Scotland which may be a much better solution. A trust deed or “protected” trust deed lasts for three years and within this time you will contribute as much as you can afford towards your debts. Any outstanding monies due to creditors after the three year period will then be written off and you are free of debt and worry. In order to qualify for a trust deed you must have £10,000 worth of debt and be able to contribute approximately £150 per month. In order to proceed with a trust deed you will require the services of an insolvency practitioner who will complete an income and expenditure in order to identify what assets exist and how much a person can afford to contribute towards their debts.

Having completed this exercise the IP would arrange a meeting of your creditors and assuming they accept the proposal your trust deed would become “protected” after 5 weeks. Your IP would be responsible for your financial conduct over the period of your trust deed and takes the title of trustee. Your trustee would carry out regular income and expenditures to ensure you are contributing the appropriate amount to your debts. This means if your financial position changes you may pay more or less towards your agreement.

Your trustee is also responsible for the conduct of your creditors throughout the term of the trust deed. This means if any creditor continues to harass you during this period you should advise your trustee who will ensure this stops immediately as this is illegal.

Negatives of a Trust Deed

There are negatives behind this solution however as during the term of the protected trust deed you are not permitted to take out further credit .Your credit file will also be damaged for a total of 6 years approximately meaning being accepted for credit or a mortgage during this period would be extremely difficult.

However to regain control of your finances, be able to answer the telephone and finally get a good night’s sleep once again many people find the positives far outweigh the negatives.

Debt Management Vs Trust Deed

2011-12-15T00:50:00.000-08:00

There are many different reasons people consider opting for a Scottish trust deed. Many are keen to avoid sequestration or stop spiralling interest and charges or continued harassment from creditors. Another reason many people consider entering a trust deed is to write off their debt once and for all.

Why choose a trust deed to write off debt when you can do the same thing through sequestration? The simple answer is both routes will indeed do this, however sequestration has a more negative impact in the long term in relation to your credit history.

Dealing with creditors and debt collecting agencies can to put it mildly be an extremely unpleasant experience and most probably one you are unlikely to forget.
A trustee is required to act on your behalf in order to proceed with a Scottish trust deed, who will negotiate on your behalf with your creditors to secure an arrangement affordable to you in order to clear as much of your debt as you can afford over a period of approximately 3 years.

You may have considered exploring using a debt management as a good solution to clearing your debt however ,this solution can run for 10,12,or sometimes 15 years dependant on the amount of debt you have and how much you can afford to contribute each month. A trust deed will only last for 3 years on average with any outstanding monies due to creditors being written off at the end of that period.

There is also no guarantee within a debt management plan your creditors will stick to your proposal as there is no legal obligation to do so. Equally they are under no obligation to freeze interest and charges as they are in a protected trust deed.
Scottish Trust Deeds offer greater flexible to write off debt and there different ways you can hold some assets. If you have equity in your property you may have to release it dependant on how much you have, however after your trust deed has finished, you will write off any debt remaining on your accounts ,at that point you will then be debt free. Your creditors have no legal right to approach you and cannot come back to take anything from you in the future.

Whilst entering a Scottish trust deed should not be taken lightly, for many it is the correct solution and an excellent way to regain control over your financial position. And best of all after 3 years you are debt free and ready to move your life on free of the burden of worry.

"I'll have one Trust Deed please"

2011-12-15T00:48:00.000-08:00

How do i go about entering a trust deed?

If your financial position has reached a point where managing your debt level and creditors yourself has became impossible you may have decided enough is enough. It is important to know there are solutions available to help you.

One solution many people explore is a trust deed, also known as a protected trust deed. The difference between the two is subtle but has an important difference. The key difference between the two is a trust deed does not legally enforce the arrangement on your creditors, put simply this means they can continue to press for payment, add charges and continue to call and write to you. This is far from ideal and serious consideration should be taken before agreeing to enter such a solution. A protected trust deed is different, within this arrangement there is a legally binding agreement between you and most importantly your creditors. This means once a trust deed has become “protected” all interest and charges must be frozen and in addition all contact from your creditors to you directly must cease ,whether that be via numerous telephone calls or a stream of demands coming through your letter box on a daily basis.

In order to enter a protected trust deed you must 1st seek independent advice from a reputable debt advice organisation, there are many not for profit organisations who will offer you excellent impartial advice free of charge. Should you decide to proceed with a trust deed you will require an insolvency practitioner to act on your behalf? Your IP will complete a full income and expenditure in order to fully understand your exact financial position .This will also tell the IP how much you can afford to pay towards your debts .Once this work has been carried out your IP will prepare a case explaining your financial position to your creditors. An offer will be made to them which will be the sum of money your IP has identified as being the amount you can reasonably contribute towards your debts on a monthly basis.

An advert will be lodged in the Edinburgh Gazette advising creditors you plan to enter a protected trust deed and if there are no objections within 5 weeks your case automatically adopts the status of “protected”.

Typically a protected trust deed will last for 3 years and during this period you will be expected to make one monthly payment to your IP,who now becomes known as your trustee, it is the responsibility of your trustee to distribute your payment proportionately and regularly to your creditors. Part of your trustees role is to ensure you pay as much as you can afford towards your debt and to that end your trustee will expect you to co operate fully and disclose any changes of circumstances that will affect the contribution you are making towards your debts .A failure to disclose relevant information can have serious legal implications. Your trustee is also liable however to ensure creditors cease all harassment and if contact has been made then you should advise your trustee immediately who will ensure this stops.

After you have complete your protected trust deed all outstanding debts are written off and you are free of any liability to move your life on free of worry and debt.

Trust deed: The pros and cons explained

2011-12-14T01:15:00.000-08:00

Trust deed, the pros and cons explained

With no apparent end in sight to the continued downturn in employment coupled with pay freezes and rising bills it goes some way to explaining why more people than ever are exploring solutions to help them get out of debt. One of the solutions available to people who live in Scotland is called a trust deed.

A trust deed is only available to people that live in Scotland and was created by Scottish law in order to help people with serious debt problems .It is not as serious or damaging as sequestration which is the Scottish equivalent to bankruptcy as under a protected trust deed you can be a company director, hold a public office position or become self employed. This is not the case with sequestration or bankruptcy.
Trust deeds are excellent in certain circumstances for people who for a variety of reasons find they are over exposed to debt and struggling to honour the repayment terms to their creditors. This may be down to you or a family member having a pay cut or a loss of job, possibly even a period of illness.

All unsecured loans e.g. credit card ,store card, bank loans, overdraughts and many more can be included within a protected trust deed .Another excellent reason to consider this solution is that all interest and charges become frozen once your trust deed becomes protected meaning your debt stops increasing.

How a Trust Deed works

A trust deed works by bringing all your debts together and, after insolvency practitioner has completed an income and expenditure identify what is an affordable sum for you to pay on a monthly basis towards your debts.

It is the job of the insolvency practitioner to approach your creditors with the proposal on your behalf explaining your financial position and how much you can reasonably pay towards your debts. The IP is also known as your trustee and if the creditors accept the proposal the trustee will be responsible for ensuring you contribute as much as possible towards your debts. The trustee will monitor your income and expenditure throughout the period of the trust deed . The trust deed becomes “protected”5 weeks after the case is published in the Edinburgh Gazette as long as there are no objections or as long as they are less than one third in value or a majority in number.

Once the trust deed has become protected all communication/harassment from creditors has to stop which for most people is a blessing in itself. If any creditor continues to harass you then you should contact your trustee and he will ensure this practice stops immediately.

Negatives of a Trust Deed

The negatives are that you are not allowed to get further credit while you are in your protected trust deed and your credit file will have defaults attached for a period of 6 years .This will make attaining lines of credit difficult even after you complete the trust deed however once 6 years has passed this situation should ease . Your credit rating will be severely affected through the process.

Many people find the weight off their shoulders allows them to sleep better at night again and to be able to pick up the phone without fear far outweighs the negatives behind this solution in addition to the fact they know exactly when they will have completed the solution and start to re build their credit file once again.

What is a Scottish Protected Trust Deed

2011-12-13T07:53:00.001-08:00

What is a Scottish Protected Trust Deed

A protected trust deed is a debt solution available to people living in Scotland which allows people to avoid the more serious solution of bankruptcy or as it is called in Scotland sequestration.

There are clear similarities between a trust deed and an individual Voluntary Arrangement (IVA). Within these solutions you pay as much as you can back to your creditors over a set period of time, at the end of this period any outstanding sums due to your creditors are written off. The typical term of each solution is 3 years for a protected trust deed and 5 years for an IVA.

In order for a trust deed to become protected either a third in value or a majority in number must agree to the terms of proposal .The actual proposal is put to your creditors on your behalf by an appointed insolvency practitioner , also called an IP or trustee. Your Trustee must place a notice in the Edinburgh Gazette in order that no creditor can come back at a future date objecting to the petition. All creditors must be informed of your intentions and sent a copy of the Edinburgh Gazette.

Your creditors thereafter have 5 weeks to object to your petition before it becomes protected as long as fewer than those with a third of the value of debt object or fewer than a third in number raise objections.

A protected trust deed is designed to help people avoid bankruptcy however it is a serious debt solution and should only be used as a means of avoiding bankruptcy. Your credit rating will be affected and obtaining credit will be extremely difficult for a period of 6 years in addition to this you are not permitted to take out credit through the duration of your protected trust deed.

There are however many benefits over the most acute of solutions (bankruptcy) namely you will be able to work in a self employed capacity or remain so if you currently are self employed. You will also be able to retain or become a company director through this solution as well as holding public office should you choose. And finally any outstanding amounts due to your creditors after you have completed the solution will be written off.

As with any debt solution you should always seek independent and impartial advice in order to allow you to make an informed decision that is best for you. There are several not for profit charities who can offer excellent advice on all debt solutions available who will not charge you for the advice you receive.

Scotland Trust Deed England IVA

2011-12-13T07:49:00.000-08:00

Should you find yourself with serious debt problems the options can appear daunting as you try to find the best solution for your circumstances. In the most acute of financial positions this solution may be bankruptcy or sequestration as it is called in Scotland. This is the most severe of solutions and one that should not be entered into lightly as any assets you have accumulated over time may be sold and any monies accrued paid out to your creditors. Another solution may people opt for is a trust deed or protected trust deed. This solution is available to people living in Scotland. In England, Wales and Northern Ireland they have a different solution called an Individual Voluntary Arrangement scheme or IVA.

The principal of both schemes are the same, they are designed to give people who, for a variety of different reasons the opportunity to regain control of their finances and after a period of time approximately (3 years in a protected trust deed and 5 years in an IVA) put the financial trouble behind them.

As a trust deed is a legally binding agreement between you and your creditors you must seek appropriate advice from a qualified debt advisor who will discuss the pros and cons in relation to the solution. Should this option be best for you and should you wish to proceed you would be appointed an insolvency practitioner . The role of the (IP) is to manager your case in order for you to enter the trust deed and thereafter through the duration of your protected trust deed.

It is the responsibility of the IP to complete an income and expenditure with you. Having done this the IP will identify how much you can reasonably afford to contribute towards your debts whilst ensuring you have sufficient left to lead a basic life for the duration of the solution.

The IP will then create a report and arrange a meeting with your creditors in order to seek their approval to the proposal. Assuming your creditors agree to the terms of the arrangement them after a period of approximately 5 weeks your trust deed takes the status of “protected”.

Once your trust deed has been protected your creditors are bound by the terms of the trust deed, this means they can no longer contact you directly either by harassing phone calls or by letters. Equally you are bound by the terms of the agreement meaning you must make a monthly payment to your IP, they will then distribute money to your creditors on your behalf.

After you have ended the solution any outstanding money due to your creditors is written of and you are free to rebuild your credit rating however you should note that your credit file will reflect you entered a trust deed for a further 3 years before it is removed.

Truth about Trust Deed

2011-12-13T07:46:00.000-08:00

It is important that you understand exactly what a Scottish Trust Deed is when trying to understand what can go wrong. Ignore adverts telling you how easy it is as they can be misguiding.

What is a Trust Deed?

A Trust deed is one form of insolvency, similar but not as severe as bankruptcy (sequestration). It is a big step to take and you should consider it carefully. It may not be ideal for you or it may be exactly right for your circumstances. It should always be treated seriously when you have no other route to repay your debt.
Some “trust deed advisors” have a financial interest in the trust deed going ahead so we always advise going with a charity. They will give the best advice to suit your own personnel needs and not tell you what you want to hear (they must tell you what you need to hear) do not be rushed into signing.

When talking to the debt advisor make sure he explains the “trust deed” correctly some claim they are experts when this is not always the case. Debt advisors at present do not have to hold a professional qualification. Again I express to keep with a charity as you do not want pushy sales people sending you down the wrong path.
The worst problem about getting poor advice is failure to inform the clients of the pit falls. The facts are if you have equity in your home or a car as well as your monthly payments you will need to pay over the value of these assets or they could be sold.

However if you are the owner of a car or a house this does not mean you should not sign a Scottish trust deed. It just means you should understand the full implications in advance; you need to know exactly what it will mean to you in advance. If you do not understand or will be unable to pay do not sign.

You also need to know what will happen if things get any worse or better. If you receive more income you will have to pay some or all of that into your Trust deed. If you win the lottery or inherit you will be required to pay this into your trust deed. If your income reduces or your outgoings go up there is a possibilities they will accept reduced payments, or extended the trust deed.

The best advice when entering a trust deed is to make sure you know all the pros and cons receive knowledgeable advice before signing. Take advice from a registered charity.

Protected Trust Deed Question

2011-12-13T07:44:00.000-08:00

If i enter a protected trust deed what happens to my home?

Many people who find themselves in financial difficulties are attracted to a debt solution call a trust deed or protected trust deed .The two solutions are very similar however a trust deed takes on a “protected” status once your creditors have agreed to the solution. The proposal to your creditors is put forward by your insolvency practitioner (IP).

However a Trust Deed is not suitable for everyone. For instance if own your own property and equity has been identified relating to the house the IP has a duty to find a way to release the equity .The reason for this is due to the fact it is an asset and as such can be used to pay money back to your creditors. If however there is negative or very little equity your property will not be at risk and your trustee can allow future equity to be ring fenced. This means the value of the property is set at the point in time you enter the protected trust deed and not at the end. There is generally a fee applied by the IP in order to waiver any future interest in the property however, this route will give you peace of mind that your home will be safe throughout the duration of your solution.

Typically a protected trust deed will last for 3 yrs. You are restricted from taking out further credit during this period and your credit file will reflect the fact you have defaulted on loans/credit cards etc. It also takes approximately 6 years in total before all traces of you entering the solution have been removed from your credit file. During this period you will most likely find obtaining credit is harder usual, however after 6 years you should find this problem eases off.

After you have completed your protected trust deed any remaining sums of money due to your creditors will be written off .This is their part of the agreement and allows you to move forward free of debt from that date onwards.

For peace of mind and to make sleepless nights a thing of the past entering a protected trust deed is an excellent route out of financial difficulties for many people.

Debt Solution: Trust Deed

2011-12-13T07:37:00.000-08:00

Debt Solution Scotland

There is a vast amount of people who have found themselves trapped by debt. For a variety of reasons people who have never lost control of their finances nor consider themselves reckless find themselves unable to meet their obligations on a monthly basis. Often this is due to short time work, withdrawal of overtime, redundancy, illness the list is endless.

Whatever the reason the impact on people’s social life, family and relationships tend to suffer as a result of financial pressures. It is often at this point at people start to look at what solutions are available to them in order to regain control of their lives.

Protected Trust Deed

One solution which may be appropriate is called a Trust Deed or a protected trust deed. This solution is available to people living in Scotland and whilst it is a legally binding arrangement and therefore a formal and serious solution is not as extreme as entering bankruptcy or sequestration as it is called in Scotland.

Should a Trust Deed be appropriate for your financial circumstances you have the benefit of knowing how long you will be in the solution for and more importantly when you will have completed the solution .The solution typically lasts for 3 years and thereafter you are debt free meaning you can start to rebuild your credit rating and after a further 3 years all history of you having entered a solution will have been removed from your credit file.

A Trust Deed is not suitable for everyone and you should seek advice before considering this as your best option.

How does it work?

All of your debts all totalled and after an insolvency practitioner has identified how much you can afford to pay to your debts on a monthly basis the IP will then take your payment and proportionately distribute the money to your creditors. This solution lasts for 3 years and any outstanding debt after this period is written off leaving you debt free.

What are the negatives?

Your credit rating will be affected by defaults marked on your file; this will last for approximately 6 years in total. You cannot take out further credit during the period of your protected trust deed .It is possible for people to discover you have entered a trust deed although this is unlikely and should you have assets you may well be asked to realise any values to pay towards your debts.

What are the positives?

You will know exactly when your arrangement will finish and you become debt free. Any outstanding money due to your creditors after you have ended the solution will be written off. You can finally answer the door/phone again and best of all you can sleep at night.

Effective Way To Get Debt Help

2011-12-12T08:08:00.000-08:00

For people living in Scotland there is a debt solution available to them called a Trust Deed. This is the Scottish equivalent of an Individual Voluntary Arrangement (IVA) It is typically used where you have debts over £10,000.A Trust Deed is regulated by The Bankruptcy (Scotland) Act 1985.

A Trust Deed has the benefit of helping the person using this solution to pay off their debts at an affordable level over a period of typically 3yrs. A trustee is appointed to look after both the person in the trust deed and also the creditors.
An insolvency practitioner (IP) would carry out a complete income and expenditure to establish a true and accurate statement of affairs .This is done in order to calculate what can reasonably be paid towards the debts. The Trust Deed is thereafter presented by the IP to the creditors for their approval.

Two thirds of the creditors must agree to the Trust Deed for it to be accepted and become legally binding. A protected Trust Deed ensures that creditors must stop all interest and charges as well as telephone calls and letters etc and best of all they cannot enforce their debt further.

What is the Benefits of a Trust Deed

When the Trust Deed has been approved it means that all interest payments and charges become frozen relating to your unsecured debts and no other fees can be added by your creditors. This helps to ensure your debts are kept to a minimum for the duration of the Trust Deed.

The duration of a Trust Deed is usually completed in 3 years after which all outstanding debt would be written off. Many people during this period take time to reflect on why their finances became so unmanageable in order to ensure they avoid making the same errors again once they have completed the protected trust deed.
One major benefit with a Trust Deed is that (unlike bankruptcy) it is not made public therefore you can keep this information private and no one will know you have entered the solution, which on some lines of employment will ensure you keep your job. Some employers are less than sympathetic to your debt problems.

Another benefit to remember when entering a Trust Deed is that your Insolvency Practitioner deals with the whole process on your behalf. They will deal with all correspondence with creditors, thus removing a lot of stress associated with resolving your financial problems.

Once the Trust Deed has been approved and all arrangements are in place you will only make one single monthly payment towards your debt.

A Trust Deed can be an effective way to resolve serious debt problems, however you should always seek advice from a free debt counselling service to receive all information you require to make an informed decision .

Trust Deed Debt Option

2011-12-12T08:06:00.000-08:00

Trust Deed Debt Option

Throughout Scotland the financial cost of living is taking its toll on many families. The ever increasing household bills and stagnant wages means that many families are falling into financial difficulty.

Help is available to help people repay their debts with Government legislation this comes in the form of Trust deed, Debt Arrangement Schemes and Sequestration. For many people they believe there problems are so bad that they are left with little choice but to move abroad, start afresh and walk away from their debt.

For many the pressure of being in debt can be too much to bare it affects everyone differently for some the only way out that they can see is to elope this is something they would not normally contemplate but they feel they have little choice. This will cross more people’s minds than you think.

Running Away Is Not The Answer

Running away or eloping is not a solution that any reputable debt advice company would recommend.

In days gone by it was known as a ‘Midnight flit’ and this name came from families leaving there homes in the dead of the night to avoid paying their creditor (landlords or anyone chasing them for money).

If you pay nothing to your debt for 6 years and your creditors cannot get hold of you within this time it will eventually become ‘Statue Barred’ and if the creditors manage after this to get hold of you they can make no attempt to contact you because after 6 years it is seen as harassment.

The down side is this will be marked on your credit file and should you return to the UK this will have an impact on you should you seek credit.
The other things to consider.

• Where would you live and work?
• Would you be able to communicate?

Also remember creditors will go to any length to find you. They will pull out every trick in the book. They may contact family members they will check all addresses they will check goggle can you live with this pressure?

They may also trace you abroad though they will be unable to pursue you for the debt it will be a constant reminder of what you have left behind.

If you live in Scotland the best thing you can do is contact Debt Support Trust they will help you resolve the Debt this advice is all free.

Running away from debt is not something anyone should do if it is a dream keep it as that.

Trust Deed Scotland Advice

2011-12-12T07:24:00.000-08:00

Trust Deed Scotland

Trust deed is a solution for debt though it is available only to people residing in Scotland. It is a solution to people who can repay some but not all off their debt and it is not as damaging as bankruptcy which is still suitable for some who can no longer pay back debt without continuing to pay back more.

The words used to describe it are “Scottish trust deed” or a “protected trust deed”.
Before signing a person is promising to pay what they can reasonably afford towards their debt on a monthly basis. This amount will be agreed between both parties. Also people with assets (Commonly equity in property) will need to contribute the asset value in to the trust deed in lieu of the asset value.

They usually continue for three years, and by the end of the term all funds will have gathered in the trust deed. The funds that have gathered will first pay the fees of the trust deed and then each creditor will receive a dividend. If any creditors do not receive a dividend the debt must be written off legally and the creditors can no longer collect them.

For a lot of people in Scotland there disposable income is getting smaller quickly. The price of living has rised dramatically with the price increases in food, gas, electricity and fuel all on the increase. With many wages been frozen and job being lost the pressure to pay debt has never been so high but with money simply not there it is becoming harder and harder to pay the creditors.

With mortgage rates at an all time low this does help however this only leads us in to a false sense of security for when they do rise 8 million people will be affected. Putting even more pressure on the household budget.
If there is no money left to pay the creditors we are in danger of a "debt spiral". The only way to explain this is using creditors to pay creditors. If this did happen the level of debt will increase rapidly.

A trust deed can stop this "debt spiral". The payment into a trust deed depends on an individual’s personal finances and after doing an income and expenditure and taking of priority debt and living cost. Also making sure they have a realistic amount to live day to day without any further borrowing.

The golden rule is to seek help as soon as there is a problem always use a charity the sooner you seek help the more options will be available. For some a Trust deed will be the perfect solution it will not suit everyone so seek advice as soon as you foresee problems .

Reduce Bills With Comparison Site

2011-12-08T06:20:00.000-08:00

One of the best methods to resolving a debt problem is to make sure you are not overspending or missing out on savings. It has never been easier to compare the price of any product or service before making your purchase, with all the new comparison tools at our disposal.

Recently people found a way to make money from comparing the price of their shopping after Tesco offered to give people "double the difference" on any product which was cheaper elsewhere. Tesco were forced to pay out hundreds of pounds in some cases because people were able to compare store prices so easily.

It is even possible to compare prices on the go with different mobile phone apps which mean you don't need to compare prices online before you go to the shops.

UK Debt Helper has found a really good price comparison website which is easy to use and very friendly. Select Money Tree will help you compare investment, insurance or even just a daily shop. You can also enter your details and find a range of ways which you can reduce your bill.

"Can I enter a Trust Deed"?

2011-09-13T08:09:00.000-07:00

The Protected Trust Deed is only available to people living in Scotland with serious debts.

What is a Trust Deed?

A Trust Deed is a legally binding arrangement between someone in debt and their creditors. A licenced insolvency practitioner is required to administer the solution. The Trust Deed is legally binding which means, if accepted, both you and your creditors would have to adhere to the terms of the Trust Deed for the full period (usually 36 months). The Protected Trust Deed is an insolvency solution for people who cannot afford to pay their contractual obligations to their debt as they fall due.

The process to enter a Protected Trust Deed is as follows

Contact a debt advice charity to ensure a Protected Trust Deed is the right advice.
If it is you would need a licenced Insolvency Practitoner to adminster your case (there are a number of insolvency practitioners in Scotland)
The insolvency practitioner would create a proposal and send it out to all of your creditors. The proposal would include how much you propose to repay and over what period of time
A notice is placed in the Edinburgh Gazette about your Trust Deed
After 5 weeks, if less than a 1/3 in value or a majority in number DON'T object to the Trust Deed it will have gained Protection.
The insolvency company will then register your Protected Trust Deed with the Accountant In Bankruptcy.

Each year your insolvency company will review your Protected Trust Deed to ensure the payments are still manageable. The Protected Trust Deed is flexible so your payments can increase as well as decline depending on your available income.

You cannot enter a joint Protected Trust Deed as the debt solution is individual. This means a husband and wife would need to enter individual Protected Trust Deed's. The insolvency company may decide to enter one Edinburgh Gazette advert as this would save money on the case.

General criteria to enter a Trust Deed?

Must owe at least £10,000 of unsecured debt
Must be able to repay at least 10% of the unsecured debt over 3 years (excluding the insolvency practitioner fees - ranging from £2,000 to £6,000).
If your equity from an asset (house, car etc) plus 36 monthly payments is more than your total debt then a Protected Trust Deed would not be the best debt solution.
You must have at least 2 different creditors.

Positives of the Trust Deed?

There are positives and negatives to entering a Protected Trust Deed and you should always seek professional advice prior to entering any debt solution.

Benefit 1: You can make affordable repayments towards your debts instead of trying to rob Peter to pay Paul.
Benefit 2: You will write off some of your debt (typically 50%).
Benefit 3: You can be sure of when the Protected Trust Deed will end (usually 3 years but your insolvency practitioner would inform you of this).
Benefit 4: A Protected Trust Deed is a formal agreement for both you and your creditors which must be adhered to.
Benefit 5: The Insolvency company will manage all creditor correspondence on your behalf.
Benefit 6: Once your Protected Trust Deed has been agreed with your creditors they cannot change their mind at a later date, giving your security and protection.

Negatives of the Trust Deed?

The negatives of the Trust Deed should be considered extremely cautiously before proceeding. These include;

Negative 1: It's legally binding so you will have to continue to make payments to your Protected Trust Deed, even if you don't want to continue.
Negative 2: If you decide to stop paying your Trust Deed your Insolvency Practitioner would have a legal obligation to proceed with Bankruptcy.
Negative 3: You can only include unsecured debts in your Protected Trust Deed - any others, such as your mortgage cannot be concluded. If you fail to maintain payments to secured debts then the items can be repossessed.
Negative 4: A default will be added to your credit file and will last for 6 years.
Negative 5: Your house / flat is typically secure, however any equity would need to be released to enter into the Trust Deed.
Negative 6: You cannot obtain further credit whilst in your Protected Trust Deed.

Trust Deed Case Study

Steven (29) and Dawn (31) from Dundee have two children and entered into a Protected Trust Deed. They didn't have a car and they lived in a housing association. Their debt was £15,000 each and they planned to pay £170 each.

Evan (43) from Glasgow entered a Protected Trust Deed with £42,000 debt and a disposable income of £350. Evan also had equity in his property of £7,000 which he had to release via remortgage. In 3 years Evan will be debt free and discharged from his Protected Trust Deed.

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Top Trust Deed Areas

Glasgow
Edinburgh
Dundee
Falkirk
Inverkeithing
Stirling
Aberdeen
Kelso

Equity Release: Debt Solution

2011-09-08T10:52:00.000-07:00

A debt charity has warned that over 55's are increasingly turning to equity release schemes in a bid to repay their credit card, personal loans and other debts which are unsecured. The CCCS found the average debt to be just under £23,000.

As personal budgets are squeezed ever tighter the outcome for consumers is bleak. Rising costs of electricity, gas, fuel and as expected an interest rate rise, are likely create a devastating strain on UK consumers.

The equity release scheme is one option to gain access to the capital tied up in an asset, such as a house. This option enables the person in debt to use the cash now and repay it within their mortgage. One benefit of the equity release scheme

Problems with Equity Release

There are problems with equity release, especially for people nearing retirement, as they will have a larger mortgage to repay and fewer working years to be able to manage the repayments. In the end, it could mean downsizing and selling the property with the potential future outcome of renting.

Also, whilst the equity release service from the CCCS is free to use, it requires a mortgage lender willing to provide the capital. The unsteady market conditions means releasing equity is very difficult, especially for people with defaults or arrears.

Be aware, with equity release schemes you are changing one debt which is unsecured (credit card, store cards, personal loans etc) for other secured debt (on your mortgage). You are not clearing the debt, just including it within your mortgage.

Full Debt Advice

It's essential people get full and honest debt advice before they take action and decide to release equity from their house. Planning for the future is essential. For example, somebody with a debt of £22,000 and a disposable income each month of £300 could be debt free in just over 6 years (if interest and charges were frozen, oh, and if they don't use a fee-charging debt management company!!). The decision is ultimately the consumers, but they could choose a debt management plan or an equity release option to resolve their debt problems.

Pensioners Struggle to Survive & Face Bankruptcy!

2011-08-19T08:19:00.000-07:00

A report released today explains that pensioners are £280 worse off over the fully year compared to last year. Rising cost of living, low interest rates and Government cuts mean pensioners are facing a tough time financially. Experts warn the situation is likely to get worse.

The average pensioner has savings of just under £20,000 however as interest rates remain low their assets are not producing what they would have expected to help them in their twilight years.

As the cost of living increases and Government subsidies become tighter, the elderly are having to rely more on their savings. This has a detrimental impact on the quality of their living.

The number of pensioners going bankrupt has increase three fold over the past 10 years - this means they can expect a life living on state benefits and could potentially lose their property.

The severity of the problem continues to grow, lets hope the Government step in soon to support those most in need of financial support.

A spokesman for UK Debt Helper said;

Pensioners deserve our support and care and reducing the benefits they receive in heating allowance shows a grave problem with our country. Austerity measures are required to resolve the countries growing debt problem but surely it hasn't come to this, and if it has, why?

50% of Individuals Worry about Debts

2011-08-19T02:00:00.000-07:00

More than 50% of individuals are concerned about their debts according to leading trade body R3.

The latest results, from the insolvency trade body R3’s Personal Debt Snapshots, reveal a 7 per cent rise in debt concern compared to the same time a year ago, according to the quarterly tracker.

Frances Coulson, R3 President said: “Households that are already struggling may find traditional lenders unwilling to provide further credit and are therefore drawn to short-term credit solutions. Individuals turning to short-term loans and credit cards should be wary of the high interest rates that often accompany these products. Overall debt can quickly snowball out of control.”

Credit card debt worries have increased by 5 per cent on the last quarter, whilst payday and short term loan worries have risen by 2 per cent, hire purchase concerns by 3 per cent and store card worries by 1 per cent.

Despite this, fears over secured lending have fallen. Mortgage repayment concerns are down by 4 per cent and bank loan doubts have decreased by 2 per cent.

Frances Coulson commented on the trend: “Concern about secured lending is also likely to have fallen due to the Bank of England continuing to keep interest rates at an historic low. Households have begun to feel comfortable that their mortgage repayments will remain as they are for the foreseeable future.”

13 million individuals are saving less than they used to and one in five consumers are putting off big financial decisions.

“Early 2011 was a tough period as individuals struggle to keep control of their finances and felt uncertain about the future. It is encouraging to see people have started to bolster their savings and pay off their debts. But we must remember that financial distress is still higher than it was a year ago.

“Delays in taking big financial decisions are up considerably on last year, indicating that the public is still hesitant about what the coming months have in store,” Frances Coulson said.

“With around six million people employed in the public sector in the UK, significant redundancies could result in increased insolvency levels. More people have started saving and paying off their debts, so these reserves should serve them well if they do face a period of unemployment. Those struggling with debt should seek financial advice rather than dealing with the distress on their own,” she added.

Family and friends help with Debts?

2011-08-19T01:48:00.000-07:00

In times of trouble many people rely on their friends and family for support. We'll ask our family and friends for a variety of support but people often state they can't talk to them about their financial problems.

Friends and family lend a supportive ear when times get tough and whilst some may be judgemental at first, they will undoubtedly help you find an appropriate charity to help.

Our Research

We've asked 157 people who were in debt and less than 16% told their friends and family about their financial problems. This can result in people feeling alone, becoming depressed and suffering from mental problems.

Why you should speak to your friends and family about your debt problems?

"A problem shared is a problem halved"
Your friend / family may have been in the same situation themselves
Your friend / family can provide emotional support
Your friend / family can support you to find a debt charity to help you
Your friend / famly could offer short term support, either financially or by communicating with your creditors?

Have you told your friends and family about a debt problem? Please share your experience with us.

Avoid Mobile Roaming Charges

2011-08-19T01:14:00.000-07:00

Mobile Phone Debts

The mobile phone was once considered a revolutionary product, only for the rich and people within the business world. Today, it's a communication tool to stay in contact with other people but importantly we all have them! The problem with the mobile phone is it can get us all into debt.

The mobile phone typically charges us 12p for a text message however when we phone other mobiles the cost can be up to 40p per minute - an hour call would cost £24! The home phone / landline cost would be far less expensive. The cost of using a mobile phone can soon sky rocket if you're not careful.

Also, watch out for roaming charges - these have been know to run into the thousands of pounds of debt. Roaming charges are when your phone cannot connect to the internet from your usual provider. The back up roaming company will charge you roguhly £3 per megabyte you download but check the small print on this. Every web page you look at will automatically download images and content which will then charge you! Usually people try and use their internet on their phone overseas and this is how charges are incurred.

"A good tip is to check if there is available WiFi nearby as this won't incur roaming charges"

You can avoid roaming charges by checking your setting and switching the roaming off.

New EU Regulations

The European Union has started to implement new regulations which will take effect from 2012 which will limit the roam charges you could face. A company will not be able to charge you more than 81p per megabyte from 2012. By 2014 that should have been reduced to around 40p. It would found in a recent survey that the average phone bill for people returning from holiday was £149.

Tips to avoid high mobile phone debts

Only use your mobile when you are out of the house - if you have the house phone then use that instead (unless you are on a contract phone and have free minutes).
Monitor your free minutes carefully! Most people get into debt because they haven't checked how many available minutes they have and they've exceeded the level.
Turn off data roaming (it'll be in your hand book)
Budget for your phone and stick to it
WiFi is usually free - look for the WiFi sign!

Debt Management Plan UK Questions and Answers

2011-08-18T08:00:00.000-07:00

Debt Management Plans: Questions And Answers

A debt management is an informal debt solution which should be considered carefully before entering the solution. It will have a negative impact on a persons credit file. The solution can enable you to repay your debt over a longer period of time that originally agreed. You may also be able to freeze interest and charges too!

Here are some commonly asked questions about debt management plans.

Q. Can legal action be taken against me if my creditors are receiving monthly payments?

Ans. Yes, because it is an informal arrangement both you and your creditors can cancel the agreement at any time

Q. How will a Debt Management Plan change my credit file?

Ans. Because your creditors will place a default on your credit file which will last for 6 years. It's not guaranteed they will do this but more than likely. This is because you are not repaying them what was originally agreed. Credit reference agencies (Experian, Equifax and Call Credit) will record this default.

Q. Is a Debt Management Plan a loan?

Ans. No, you do not borrow more money in a debt management plan - you use the available disposable income to offer pro-rata payments towards each creditor.

Q. How long does a Debt Management Plan last?

Ans. There is no set time for a Debt Management Plan to last. You must repay all of the debt you owe. If your debt management plan will last longer than 10 years then another debt solution may be more suitable.

Q. Will interest and charges be frozen?

Ans. There is no guarantee interest and charges will be frozen but a debt management company will ask for this.

Q. Will they take my house in a Debt Management Plan?

Ans. No, they will not ask you to offer your house in a Debt Management Plan. You must keep up secured loan repayment though to ensure you maintain your mortgage and retain the property.

Q. I have a CCJ, can I enter a Debt Management Plan?

Ans. Yes, there are no problems entering a Debt Management Plan with a CCJ

Q. Can secured loan debts be included?

Ans. No, you must always maintain your secured loan payments. If you are in arrears with your mortgage this cannot be included.

Q. How much do companies charge to set up a Debt Management Plan?

Ans. For profit Debt Management Companies charge the first 2-3 months payments (meaning your account will go into further arrears) and then a monthly management payment of between 12% and 50% of your payments.

A charity will not charge you a set up or monthly management fee. A debt management charity will receive 10% of whatever they collect and return to the creditors out of the end pot of money.

Q. How can you tell if your creditors are being paid?

Ans. A Debt Management company should send you quarterly statements to update you on the progress being made and the money which has been repaid.

Q. Is there a minimum amount I need to pay into a Debt Management Plan?

Ans. The more you repay each month the quicker you will be debt free. The minimum amount a Debt Management company can accept is £100 per month. If you cannot afford this amount then another debt solution may be more suitable.

Q. How will the payments be made?

Ans. You will pay one company (the Debt Management company) your monthly payment and they will distribute this amongst your creditors.

Q. My creditors are still contacting me even though i'm in a Debt Management Plan, what can I do?

Ans. You should speak to your Debt Management company and ask then to act on your behalf and deal with any problems.

Q. What are the benefits of a Debt Management Plan?

Ans. Potentially you can benefit from

One monthly fee to one company
Reduced interest and charges
You don't have to liaise with creditors
You will pay back all of your debt

Q. What are the disadvantages of a Debt Management Plan?

Ans. The disadvantages are

It's informal so the plan can start and stop at any minute if the creditors change their mind
Your Debt Management plan could last for a long time
There is no guarantee interest and charges will be frozen
It will have a negative impact on your credit file

Q. Who can enter a Debt Management Plan?

Ans. Anyone can enter a Debt Management Plan as long as they have a disposable income and unsecured debt.

Q. How much debt should I have to enter a Debt Management Plan?

Ans. You should not enter a Debt Management Plan if you have less than £5,000 worth of debt.

Q. How many creditors do I need?

Ans. At least 2 or 3 (depends on the company). A Debt Management company will not negotiate with one company for you.

Q. Can Debt Management monthly payments change?

Ans. Yes, the Debt Management company will conduct a 6- monthly review of your income and expenditure. If you have more money which you can repay towards your creditors then you will be asked to make this. If your income drops then your Debt Management plan can continue (as long as you can afford at least £100 per month) with a lower amount.

Q. Are my creditors going to accept my proposal?

Ans. There is never any guarantee your creditors will accept your proposal.

Q. If a creditor refused my proposal what would happen?

Ans. If a creditor refused your debt proposal then the Debt Management plan could continue although you would have to negotiate yourself with the other creditor.

Q. Why would a creditor accept a Debt Management Plan proposal?

Ans. A creditor is likely to accept a Debt Management Plan because it's an agreement for them to get back all of the money they lent you. This means that despite it taking longer than agreed, the creditor will not be out of pocket.

Q. Can I take out more debt?

Ans. Technically you can take out more credit. Most Debt Management companies will remove you from the Debt Management plan if they understand you to be using further credit to supplement your lifestyle.

Q. Can you get a joint Debt Management plan?

Ans. Yes, you can have partners (two people) entering a Debt Management Plan together.

Q. Can you change Debt Management company if you are already in a Debt Management Plan?

Ans. Yes. It's an informal arrangement so you can change your Debt Management company at any time.

Q. Who tells the creditors about the Debt Management Plan?

Ans. The Debt Management company should tell the creditors about the Debt Management Plan.

Q. Who will know about my Debt Management Plan?

Ans. The only people who know about a Debt Management Plan are you, the Debt Management company, your creditors and anybody else you tell. The Debt Management Plan is not registered publicly.

Q. Do I have to tell my wife / husband / partner about my Debt Management Plan?

Ans. No, not if you don't want to.

Q. How much will each of my creditors receive each month?

Ans. Payments made to your creditors are made on a pro-rata basis. This means the creditor owed most will receive the largest amount each month. For instance, if you can afford £150 per month then this will be split accordingly.

                 Total debt    Percentage of debt    Monthly repayment

Bank              £4,000               66%                         £99

Store card     £1,000                17%                        £25.5

Credit card    £1,000                17%                        £25.5

10 Debt Myths!

2011-08-18T07:00:00.000-07:00

There are hundreds of myths about the debt industry - everyone has a mate, family member, work colleague that has a story about debt problems. We've taken some of the worst debt myths in this post... enjoy! Please contribute your own too!

Debt Myth 1 - You can't tell anyone

Often people think they can't tell anyone about their debt problem or it'll result in receiving additional threats and worry more people. Millions of people each year turn to debt advice charities and receive debt advice. There are a number of different debt solutions available including Bankruptcy, IVA, Trust Deed, or Debt Management Plan.

You are not alone - speak to a debt charity or tell a friend or family member. A problem shared is a problem halved.

Debt Myth 2 - Debt advice companies are all the same

Some debt companies will act within your best interests but most want to make money from your misery. Research and check out your debt company. We advise speaking to a debt charity who can give you informal debt advice

Debt Myth 3 -"Write off your debt"

In some debt solutions you can write off your debt but this will have a negative impact on your credit rating and make obtaining credit again in the future difficult. Rarely can you write off as much as the adverts say - it's typically 50% debt being written off in an IVA or Trust Deed.

Debt Myth 4 - I'll never have a bank account again

Lots of banks are now creating bank accounts for people who have a bad credit history. If you are entering a debt solution ensure you change banks if one of your creditors is the bank you currently bank with.

Remember, ask for an account without an overdraft!

Debt Myth 5 - Paying fees for Debt Management

You DO NOT HAVE TO PAY FEES FOR A DEBT MANAGEMENT COMPANY! We've bolded it because it's one of the most mis-understood myths about the debt industry. There are fee debt management plans where you don't have to pay for the solution. Instead the creditors pay the debt management company fee so you don't have to. Speak to any debt charity - they'll steer you right!

Debt Myth 6 - Bankruptcy will take my home

Most people are scared their debt will mean they will lose their home. In Bankruptcy (and an IVA) the official receiver / insolvency practitioner is only interested in any equity you have in your assets. This means if your house has no equity or you live in rented accomodation you will not have to leave your house.

If you earn an income where there is disposable money available to pay towards the Bankruptcy then an Income Payment Order may be in place for a total of 3 years.

Debt Myth 7 -Friends / Family can't buy my assets

Friends and family can purchase your assets as long as they are paying a fair price. It's always best to speak to a licenced insolvency practitioner about this before proceeding (especially in an IVA / Bankruptcy).

Essentially, the official receiver / insolvency practitioner wants the equity that's due so it can come from any party.

Debt Myth 8 -You can go to jail for not paying your debt

This is factually incorrect, you cannot go to jail for not paying your debt. You should repay your debt if you can but if you can't then you won't go to jail.

If a judge orders you to make repayments and you refuse then the judge can place you in jail as punishment however this would be for failing to follow a judges orders.

Debt Myth 9 - Your credit file will be damaged forever

If you enter an insolvency solution your credit file will be damaged with a default being added. This default will last for 6 years, after which period you will be able to gain credit and start to improve your credit rating again.

Debt Myth 10 - Bailiff's / Messenger at arms will enter my house

A bailiff (or in Scotland messenger at arms) are only allowed to enter your property if you invite them in.You should communicate with a bailiff / messenger at arms to come to an agreement regarding your debts, this avoids the problem spiralling out of control.

Man Found Guilty of Fraud

2011-08-18T06:30:00.000-07:00

A man was found guilty yesterday of fraud and theft after he stole from his landlord. Michael Wilds stole from Paul Hardiment by using his Barclays bank card and spending more than £10,000.

After an intense investigation it transpires Barclays bank had been sending Mr Hardiment's card to the property he let to Mr Wilds, who in turn committed serious fraud. Over £10,000 had been spend by Michael Wilds before Paul Hardiment became aware his tenant was stealing from him. Barclays sent their statement to Paul at which point he queried the balance.

Mr Wilds from York used the credit card to finance his expensive lifestyle and pay off gas debts. Michael Wilds solicitor, Nicholas Barker, said: “This did not fund any high living”, however, the prosecutor stressed he drove a jaguar and spent the money on new tyres for his girlfriends Audi TT.

Wild pleaded guilty to fraud and theft and received a sentence of up to four months imprisonment, suspended for two years, and ordered to carry out 150 hours unpaid work.

Student debt: We Need An Education

2011-08-18T06:15:00.000-07:00

Students across the UK are facing a massive uphill struggle with their debts begining to spiral out of control due to student fees. An independent body has stated they believe Universities will have to lower their fees or risk alienating students.

Students in debt

Typically students leave University owing on average £35,000 in England, Wales and Northern Ireland. This is a combination of tuition fees, student loans and personal debt.

Student loan debt has one of the lowest interest repayments available but the interest can, and will, continue to grow

Changing the mindset

The students of today and the experts of tomorrow. It's fair they should pay for their education however Government ministers seem to forget they are doing so to help pay increased taxes and contribute to the economy.

The supply and demand issue surrounding Universities has pushed up the prices and meant the UK Government can take a backseat role in the future of students. By removing courses such as 'Seminar on Lady Gaga', as entertaining & educational as I'm sure it is, we can reduce the number of people at University.

The Government need to take a more active role in the future of students to reduce their level of debt. Let's start by giving everyone the chance to go to University - but only if it's necessary!

What is a Payday Loan?

2011-08-17T07:30:00.000-07:00

What is a Payday Loan?

A Payday loan is short term lending with high interest rate (up to 5,000% APR). This type of lending has become popular for people who can't make it to the end of the month with their wages and as such need additional finances.

An example of a Payday loan is, John goes to his local Payday loan company and asks to borrow £200 for 1 week. John will then at the end of the week repay £250 back to his Payday loan company.

What are the benefits of a Payday Loan

It can provide a short term release during a tough financial period
All you need is a UK bank account and a regular income to get a Payday loan
Usually there are no credit checks
The money is available quickly and can often be in your account within 24 hours.

What are the disadvantages of a Payday Loan?

If you miss your payment the interest and charges can be huge
The Payday loan company will pressure you to get their money back.
If you are self employed the checks will be larger and more in-depth than for anybody else
Like all loans and debt, if you fail to repay the money a Payday loan company can get a charge for payment order and then take money directly from your wages

Debt Help

If you have a debt problem contact a debt advice charity for help. If you have a financial problem at the end of the month then we advise you to look at a budget plan which can help you manage your finances better and avoid the need to use a Payday Loan company.

Free Debt Advice Tips

2011-08-17T07:02:00.000-07:00

Budget Today!

It may seem like the most simple thing to do but setting a budget and sticking to it can be the best thing for maintaining your finances.

Spending your money as you go can mean at the end of the month you are short on cash. This is how people end up taking Payday loans and getting into more debt problems. By setting your budget you allow yourself a certain amount of money each day / week and this will help your survive until the end of the month.

You must ensure you meet your essential bills like rent/ mortgage, food, council tax, gas / electricity etc before repaying the rest of your debts. A budget can help you realise how much money you have available to pay towards debts each month.

Keep a record of your budgets so you can review this every 6 months.

"Look after the pennies"

When finances get tight and times get tough you need to look after the pennies, which could mean cutting back on luxury items.

Some luxury items can include gym membership (exercise at home / at the park), Sky TV, shop at ASDA not Marks and Spencers etc.

Change how you see credit

Credit card companies want you to miss payments and receive charges and interest so they can make profits. If you can't afford to repay it, don't use it. If you have debt problems and you need to use credit to survive then a debt solution would be required.

If credit cards are used carefully then you can benefit from free offers, improve your credit rating or use your credit card for the insurance for large purchases.

Tell someone

One of the reasons people struggle with debt is because they don't share the burden they feel. As such this can be detrimental to their health. Share your problems with friends / family or work colleagues - they can support you during a difficult time.

Inform your creditors

Tell your creditors about the tough time you're experiencing. It's important to keep your creditors informed of the debt problems you have, otherwise they may think you are refusing to communicate leading them to take severe action. Sometimes your creditors can work with you and help set up a payment plan.

Get debt advice

Speak to a registered charity for debt advice. There are a number of charities who can help you if you need their support - get in touch and they can give you qualified debt advice.

Tips for People in Debt

2011-08-10T07:48:00.000-07:00

There are 5 top tips we have for people in debt trying to become debt free, which are;

Face your debt head-on
Ask for help from a debt charity
Write an income and expenditure - be honest!
Don't make any hasty decision and speak to lots of people
When you take your head out the sand, move forward and continue

A story from another blog which we think could be useful for people in debt is below. It's quiet an inspirational story.

This story is taken from a blog called astoryofdebt.com

When I first started paying off my debt, I was looking at a balance of more than $20,000 and thinking, why didn’t I do this earlier?

I thought that for two reasons. First, it turned out that doing something about my debt was so much easier than just stressing about it. I cannot say how miserable it was to feel crushed by the weight of not just all the money I owed, but the guilt over having put myself in that position. Second, if I had started earlier, then I would be further along, of course!

I took the only option available to me and started at the beginning.

I never despaired, but it was not easy. I sometimes experienced the never-tweeted-about, never-blogged-about “ZOMG. I work more than anyone. I never get a break. My life is so hard. No one understands” thoughts, but I always had enough perspective to remember I was doing this for myself. I was giving up my free time to make my own life better. Selfish, really, but the good kind of selfish, because how much can you help anyone out when you’re limited by debt?

What I’m saying is that it’s worth it. Worth it to do whatever you have to do to get your own life in order. And worth it to sacrifice a little so that you can live better later. Not when you retire, but sooner than you might expect.

But, as cool as it is to be out of credit card debt, the year I spent working toward it was pretty amazing too. I gave up stuff, and stuff is great, but it’s probably the easiest thing to give up. This year, I was just as happy and had just as much fun as years previous. I kept working toward my academic and career goals. I wrote a lot. I met amazing people. I made plans, imaginary and real. I remained sane. And all with the extra bonus of feeling good about what I was accomplishing in paying off my debt.

If I gave up too much, then I would regret it now, but instead I thank everything that I was smart enough to just get started already.

Free Debt Management Plans Only!

2011-08-10T07:39:00.000-07:00

We can't stress this enough and UK Debt Helper will be giving you honest information about Debt Management Plans. For profit debt management companies charge thousands of pounds in fee's directly out of their vulnerable clients.

If you think a debt management plan is the best advice for you then always speak to a not for profit charity. All for profit companies are only in it for themselves looking to make money. They may have excellent customer service but actually the truth is your debt management plan will last longer with a for profit company.

Pricing

Charities get paid for administering your debt management plan but they get their money from the creditors at the end. So you would repay 100% of the money you borrowed (potentially including interest and charges) and they you will be debt free.

To become debt free with a for profit company you need to pay back all of your debt plus their fee. The average fee for a debt management company is the first 2-3 months payments as setup costs then between 15%-40% of your month contributions. This means your debt problem lasts extra long for no apparent reason.

UK Debt Helper believes all for profit debt management companies are not competitive in the current market and as a result some are using sneaky, deceitful tactics to trap customers.

AVOID FOR PROFIT DEBT MANAGEMENT COMPANIES

Man in Debt Goes to Extreme Measures: Alternative Debt Advice

2011-08-10T07:23:00.000-07:00

Ross Humphries, a man with severe debt problems is facing a three year jail term for agreeing to be a courier of 45 Kilograms of cannabis resin which was worth around £280,000. Mr Humphries received a fee of £250 for his services.

The class B drug was found in Mr Humphries car when he was stopped by police on the M1 in May 2011.

Mr Humphries was a man described as a 'hard-working family man who fell on hard times and got into debt'.

What to do in debt?

It's understandable people in debt may feel stressed and panicked about their debt problems however committing crimes to survive is not a sustainable way solution to debt.

There are numerous debt solutions which people can utilise to resolve their debt problem. These solutions include general money advice, debt management plan, refinance, full and final settlement, IVA, Trust Deed or potentially Bankruptcy.

UK Personal Debt Solutions

2011-08-10T07:00:00.000-07:00

The latest UK personal debt figures reveal that the average household debt is £55,803 - including mortgages. The results, compiled by Credit Action, show that total UK personal debt at the end of June 2011 came to £1,451 billion.

The monthly data reveals a significant amount of debt across the UK, with individuals currently owing almost the country’s entire output between Q2 2010 and Q1 2011.

Every day an average of 331 people are declared bankrupt or insolvent, according to the report. In addition, the Citizens Advice Bureau deals with 9,072 new problems daily, whilst every 4.36 minutes a new consumer is declared bankrupt or insolvent.

The insolvency solutions exclude informal debt solutions such as a debt management plan, so the debt situation is far worse than previously expected. Personal debt problems can range from general money advice through to Bankruptcy advice.

The Office for Budget Responsibility (OBR) has predicted that household debt will reach £2,126 billion by the end of 2015, increasing the average debt per household to £81,769, Credit Action reveals.

Furthermore, the UK population is projected to grow by 1,205 people a day over the next decade which is likely to further impact the debt industry. Average consumer borrowing via overdrafts, credit cards, motor and retail finance deals and unsecured personal loans has increased to £4,268 per UK adult at the end of June 2011.

Gold - Best Investment for next few years

2011-08-04T03:51:00.000-07:00

Who in times of a recession has a spare $1,000 (or whatever the conversion in pounds is) but with the price of gold at an all time high and only getting higher as the economy gets worse then gold is the best investment at this moment in time.

From the chart above which was original taken from Bloomberg, we can see that as U.S debt increases the price of gold also increases. The question is, when will the U.S debt limit come down, but considering they just increased it and there is no solid plans for the next 10 years as far as how they will solve the debt crisis many people are predicting that gold will continue to rise for a few years to come. It is important if you do decide to invest in gold that you continue to watch and listen for plans being created to fixing the debt in America long term. When you feel it is getting resolved then it may be time to sell because a weak dollar equals strong gold but the opposite is also true.

Interest Rates Will Remain Unchanged Says Economists

2011-08-04T03:13:00.000-07:00

According to economists questioned by the BBC, interest rates will remain 0.5% until at least the end of the year.

The BBC asked 32 experts whither or not they felt that the Bank of England would increase the interest rate from it's record low of 0.5% and 26 said they felt interest rates would not change.

Over 50% did say they expected rates to rise by the end of 2012 and to reach 1.5%.

The BBC results have been released just prior to an announcement on the interest rates which are expected around 12pm BST today.

Debt Management Plan

2011-08-03T07:39:00.000-07:00

UK residents have a strange connection with debts because whilst they can't do with a large amount of debt they also struggle with not having the ability to do the things that available credit offers. The British are likely to rank high as being the most impulsive when it comes to shopping. When times were good and we were enjoying the booming economy, people went on spending and spending.

Many people will spend until such time that the credit cards are used up and there is no other option but to begin the arduous task of dealing with their debt. One option to helping people dealing with debt is a debt management plan. Debt management is a debt solution were by a company will speak to your creditors on your behalf to stop any interest and charges and agrees an affordable amount to be paid each month/week.

The first priority of debt management is to help borrowers pay their debts. In some instances some companies will advise people that they can pay a certain amount of money and then ask creditors to write off a the remained. This practice is called "debt consolidation" however no one except the creditors can guarantee a fee will be offered or accepted. If you are offered this option from anyone other than your creditor then please be wary how an external company can offer this solution.

Credit Action Debt Statistics

2011-08-02T05:25:00.000-07:00

New debt statistics have been released by creditaction.org.uk and the new stats are as follows;

331 people every day of the year will be declared insolvent or bankrupt. This is equivalent to 1 person every 60 seconds during a working day.

Total UK personal debt at the end of June 2011 stood at £1,451bn. The twelve-month growth rate remained unchanged at 0.8%. Individuals currently owe nearly as much as the entire country produced between Q2 2010 to Q1 2011.

Total lending in June 2011 rose by £0.4bn; secured lending decreased by £0.1bn in the month; consumer credit lending increased by £0.4bn (total lending in Jan 2008 grew by £8.4bn).

Total secured lending on dwellings at the end of June 2011 stood at £1,241bn. The twelve-month growth rate remained unchanged at 0.7%.

Total consumer credit lending to individuals at the end of June 2011 was£210bn. The annual growth rate of consumer credit increased 0.3 percentage points to 1.8%.

UK banks and building societies wrote off £9.5bn of loans to individuals in the 4 quarters to end Q1 2011. In Q1 2011 they wrote off £1.89bn (£866m of that was credit card debt). This amounts to a write-off of £20.71m a day.

Average household debt in the UK is ~ £8,064 (excluding mortgages). This figure increases to £15,507 if the average is based on the number of households who actually have some form of unsecured loan.

Average household debt in the UK is ~ £55,803 (including mortgages)

If you add to this the March 2010 budget report figure for public sector net debt (PSND) expected in 2015-16 (excluding financial interventions) then this figure rises to £106,418 per household.

Today in the UK

1,577 Consumer County Court Judgements (CCJs) were issued every day during Q1 2011 and the average judgement amount was £3,118.

Citizen Advice Bureaux dealt with 9,072 new debt problems every working day in England and Wales during the year ending March 2011.

The average cost of raising a child from birth to the age of 21 is £27.50 a day

100 properties were repossessed every day during Q1 2011

36 new people became unemployed for more than 12 months every day during the 12 months to end May 2011

1,578 people reported they had become redundant every day during 3 months to end May 2011

£251,500,000 is the amount that the Government Public Sector Net Debt (PSDN), including financial interventions, will grow today (equivalent to £2,911 per second)

£144,660,000 is the interest the Government has to pay each day on the UKs net debt of £2276.0bn (which includes financial interventions). This is estimated to rise to £182m a day in 2015-16

220 mortgage possession claims will be issued and 160 mortgage possession orders will be made today

382 landlord possession claims will be issued and 265 landlord possession orders will be made today

The UK population is projected to grow by 1,205 people a day over the next decade

24.1m plastic card purchase transactions will be made today with a total value of £1.182bn.

7.3m cash withdrawals will be made today with a total value of £478m

The average car will cost £16.08 to run today

It costs £67.80 on average to fill a car with a 50 litre tank with unleaded petrol.

Reason Why People Get Into Debt

2011-05-25T09:07:00.000-07:00

There are numerous reasons why people find themselves struggling to meet payments to their debt. People in debt are normally paying their creditors what they are due but all of a sudden something happens that prevents them from doing this.

Below is a list and explanation of typical reasons for people having a debt problem:

Redundancy – People are being made redundant at an alarming rate at present due to the financial uncertainty of the current financial climate.

Reduced Hours – There is a lot of people having their hours cut so their company does not have to make people redundant.

Illness – If someone is ill and off for a period of time then they may only get Statutory Sick Pay (SSP) and this will lead to lower income.

Child Birth – If a family have a child then this will be an added allowance on to their expenditure

Death – An added expenditure would happen if there was a death in family.

Unemployment – Again, this is the same as being redundant as it will result in a dramatic reduction in the family income.

Retiring due to ill-health – This does happen quite often and will have a detrimental effect on household income. For the person involved it will take time to get used to not working and possibly relying on benefits which may mean a change of lifestyle. Failing to adapt to this change of lifestyle could result in a debt problem.

Overspending – This is when people use credit to have a lavish lifestyle which they cannot afford. Once all credit facilities have been diminished then they need to seek help. This is a rare scenario however people who are not in debt often assume a person's debt problem is due to overspending. This can be the route cause of the stigma of debt.

Gambling, alcohol and drug misuse – When people initially have access to credit and have an underlying problem, such as gambling, alcohol or drug misuse then this can result in people using credit to satisfy their addiction.

As you can see it only needs one of the above circumstances to trigger people from living within their means to having to seek advice. The current economic climate is pessimistic; redundancies, house repossessions and debt advice is due to sky rocket.

If you have a money problem and need debt advice then always use a debt charity. Debt charities are not for profit which means the directors are not receiving any money made by the charity. This ensures the advice is not driven by how much money people can make.

When you contact a charity for debt advice there will be a number of options available such as Bankruptcy, IVA (England, Wales & N. Ireland) and the Debt Relief Order (England, Wales & N. Ireland). In Scotland the equivalent to the IVA is called a Protected Trust Deed (PTD). In Scotland there is also the Debt Arrangement Scheme (DAS) which is similar to a Debt Management Plan (DMP) but the DAS provides you with protection if you are a homeowner. In Scotland the legal term for Bankruptcy is called Sequestration. This comes in different variations based on the route to Sequestration. There is Sequestration itself but there is also Low Income Low Asset (LILA) along with the new Certificate of Sequestration which was introduced in November 15 2010.

Dealing With Debt

2011-05-25T09:01:00.000-07:00

Debt is a problem affecting millions of people across the UK. Debt has a negative impact on a person’s financial, social and mental well being. Therefore, it’s unlikely anybody would want to be in debt. So, If you don’t want to be in debt, how can you resolve your debt problem?
Our step by step guide, provided by a qualified debt advisor, to resolving a debt problem will give you the tips to take control of your financial situation.

Step 1: Organise your Statement of Affairs (Income & Expenditure)

You can either create your statement of affairs on a computer or on paper. Firstly, record your income (combined if you live with a partner) including wages, child benefit, tax credits etc.
After you have recorded this please total your monthly expenditure, including your mortgage/rent, council tax, gas and electricity etc.
Once you have your total income and total expenditure, please deduct your expenditure from your income. Any money left after deducting your monthly expenditure from your monthly income is known as your disposable income.

Step 2: Your Debts

Now, please make a list of each debt except for anything secured on to your house. Record which company you owe money to, the type of debt (credit card, overdraft etc) and how much you owe.
Afterwards, please total the debt up. You should now calculate the monthly contractual payments you should make to each debt. Please add up your monthly contractual payments separately.
If your monthly contractual payments are more than your disposable income then you may need some professional debt advice from a debt advice charity.
The next step if you feel you need debt advice is not to contact a for profit company but to contact a not for profit charity. A charity will not charge you for their service whereas a for profit company is likely to request a fee.
If your contractual payments are less than your monthly disposable income, then you are not insolvent, however a debt payment plan may help you. For example, a Debt Management Plan or a Debt Arrangement Scheme may be suitable. Again, a for profit company will charge for these services whilst a charity will offer them free of charge.

Step 3: Making the decision
Once you have spoken to the advice charity and they have given you the solution it is up to you to decide you wish to proceed, if you think it is suitable. A debt charity will be able to help you with the advice, explain the debt solution and ensure you are dealing with a reputable debt solution company.

Step 4: Enjoying the rest of your life
Once you have completed your debt solution, and it may take a number of years, you will then be debt free. The money you were paying towards the solution will then be yours and you will no longer have any debt to credit card companies or banks. The process should help your budget your finances. There are excellent money manager organisers which can help you control your finances in the future and avoid future debt problems.http://www.debtsupporttrust.org.uk.

Debt Advice Charities Explained

2011-05-25T06:02:00.000-07:00

http://ukdebthelper.blogspot.com/Many people are told when they are in debt to go and speak to a debt advice charity. People are generally told debt advice charities are the best option because they do not charge the client for advice. For profit debt advice providers typically charge the client for advice in order to gain a revenue stream.

The debt advice charities can be split into three different categories. The difference between these charities is down to who owns them and where the funding is provided. Each has their merits and overall they are generally better than for profit organisations.

The three debt advice charity types include Government funded, Creditor funded & Solution funded.

Government funded

A Government funded debt advice charity is the Citizens Advice Bureau where volunteers and funded advisor's supply advice on debt advice. You can go to your local Citizens Advice Bureau for advice and help on your debts. There are positives and negatives to the Citizens Advice Bureau option.

Positives

- Most independent form of debt advice
- Government funded so the most secure

Negatives

- The waiting time can be 8 weeks and longer to see a specialist
- The advice is typically provided by volunteers and this can mean the quality of advice and knowledge is not always the best in the industry

Creditor funded

The second type of debt advice charity is a creditor funded option. Debt charities such as the CCCS, National Debtline and Payplan are all funded by the creditors. The people who have clients in debt such as the major banks and credit lenders will donate money to the creditor funded charities to allow them to give debt advice. Again, there are positives and negatives to this type of debt charity

Positives

- The advice is typically immediate
- The charity status should mean the charity is not focussed on making a profit

Negatives

- The advice is provided by an organisation funded by your creditors
- There are some people who believe the advice is biased towards the creditors and you could be asked to repay your debt over longer than 20 years.

Solution funded

The solution funded debt advice charity is an organisation such as Debt Support Trust. The charity helps people via the telephone and internet. This type of charity receives their funding from helping the client gather their paperwork and introducing the client to a company to provide the solution.

Positives

- The advice is typically immediate
- The charity status should mean the charity is not focussed on making a profit

Negatives

- The money to continue to help other people comes from a small percentage of solutions
- Whilst this type of charity does not look to make a profit they do need enough income from helping clients to continue to help other people. The payment this type of charity receives does not come directly from the person in debts pocket.

What is the best type of debt charity?

Each debt advice charity has its benefit and negative. Do you want to wait for debt advice, would you want to speak to a charity funded by the people who gave you the debt or would you prefer to speak to a charity who receives a payment for introducing you to a debt solution company.

The alternatives option is to speak to a company who will charge you for advice and may place you in the wrong debt solution (debt management plan for over 40 years for instance).

The safest route for people in debt is the debt charities. What debt charity you decide to chose is your decision but our advice would be to speak to several debt organisations to see which one is most caring. You can also speak to a number of debt charities in order to see what debt solutions they recommend and make a decision which one you wish to follow.

Debt Advice Analyser

2011-05-19T05:47:00.000-07:00

Debt Advice Analyser can tell people what the best debt solution is for them. The Debt Analyser is available at http://www.debtsupporttrust.org.uk/online-tool

Money Manager Login For Debt Support Trust

2011-05-19T05:42:00.000-07:00

In this video we will show how to login to Debt Support Trust and use the Money Manager Tool. This online financial organiser can help people see what income and outgoings they have as well as help them manage their money more effectively.http://www.debtsupporttrust.org.uk/money-manager

Protected Trust Deed Statistics

2011-05-19T05:35:00.000-07:00

A protected trust deed is a legally binding agreement between a person in debt and their creditors. This video shows which area were highest for protected trust deeds in the last year. This statistics and the protected trust deed checker can be found here http://www.debtsupporttrust.org.uk/how-can-we-help/protected-trust-deed

or here for the checker

http://www.debtsupporttrust.org.uk/media/37787/protected%20trust%20deeds%202010-2011%20checker.xls

Sequestration Case Files

2011-05-16T02:45:00.000-07:00

Mr & Mrs P have recently received a Charge for Payment. This gives them 14 days to pay their debt of action will be taken. It is now over two weeks since this was received and they are now Apparently Insolvent. This means that they can use the charge for payment to look at Sequestration (Legal name for Bankruptcy in Scotland).

Mr P works full-time but is on a low wage and Mrs P stays at home to look after the kids. Mr P contacted Debt Support Trust about the debt situation they were facing.

There is £21,450 in debt and it is all loans and are in joint names. After considering all options Mr & Mrs P have decided that Bankruptcy is the best option for the them.

They have since contacted the AIB (Accountant in Bankruptcy) to get the forms and these have been handed back and each paid £100 for the cost of Sequestration.

Bankruptcy Case Files

2011-05-16T02:33:00.000-07:00

Miss G has run up debts of over £20,000. She lives with her parents and does not have any assets that she could sell. She has one child and has had her income slashed as she has had to go part time.She contacted Debt Support Trust and after all avenues were explored the solution for Miss G was Bankruptcy.

After paying the fee of £450 for the insolvency service for the Official Receiver. As her income decreased she did not have to pay court fee due low wages.

Bankruptcy was then granted. Miss G did not have to pay any money every month as her income is low. Miss G will be discharged from her Bankruptcy after 1 year. Miss G is aware of the impact on her credit file but there was no other solution available to her.

Individual Voluntary Agreement Case Files

2011-05-16T01:53:00.000-07:00

Ms E went through a divorce over five years ago now. Ms E now lives with her grown up kids in a rented house through her local authority. She has debt outstanding at approx £40,000. Her debts are two loans and a couple of credit cards.

After the divorce there was only her income and Child Support payments from her ex husband. As the kids are now 18 she does not receive any child support anymore and is struggling to pay her creditors. She has robbed Peter to pay Paul but is now at limits on both credit cards.

Ms E recently sought advice and called Debt Support Trust for financial help. After looking at all avenues Ms E has decided to enter an IVA.

The nominee looking after her case has sent out the proposal to Ms E and also to her creditors. Ms E has a disposable income of £300 per month. The monthly contractual payments for debt add up to £920 per month.

The meeting of the creditors has taken place and the vote went in favour of the IVA to go ahead meaning that in five years Ms E can look forward to a new beginning. Ms E will pay £300 per month into her IVA and will pay so much back to the creditors and at the end the rest will be legally written off. All interest and charges will be frozen. (Unless the IVA terms are not met then these can be added back on).

Ms E can now see light at the end of the tunnel and has no assets that the supervisor will look at so has now peace of mind.

Protected Trust Deed Case Studies

2011-05-16T01:46:00.000-07:00

Mr W has recently separated from his long term partner and now lives alone. He has approx £25,000

of unsecured debt from a personal loan to various credit cards all in his sole name. He rents his home from a local housing association.

As there is now only one wage coming into the house he is now finding it difficult to pay all of his essential bills and does not have enough money left over to service his debt. Once the essential bills are paid he only has £240 left over to pay to his debt. He needs £695 per month to cover his monthly contractual payments.

Mr W sought advice and contacted Debt Support Trust and after we gave the most appropriate advice we advised on a PTD. The trust deed allows Mr W to make an offer to his creditors in the hope he can get this sorted in the next three years. He has no assets like a house or car etc.

After Mr W signed his trust deed the trustee advertised his trust deed in the Edinburgh Gazzette and this gives the creditors 5 weeks to object. As long as a third in value or a majority in number don’t object then the trust deed will become protected. Once it is protected all interest and charges are frozen. (Unless the trust deed is not completed satisfactorily the interest and charges could be added back on).

This means that in three years Mr W will be discharged from the trust deed and all outstanding debt

will be written off.

Protected Trust Deed Statistics

2011-05-11T03:40:00.000-07:00

New figures were released today by the Accountant In Bankruptcy and have shown a decrease in the number of protected trust deeds granted in the previous quarter of 2010/2011.

The new statistics have shown a drop of 25% in trust deeds granted compared with the previous quarter. The fall in trust deeds being grant seems to be linked to the rise in certificate of sequestrations which was introduced in November 2010. Bankruptcy was also on the rise within the last quarter with 2,687 people being awarded bankruptcy through a range of different routes, these can be broken into;

2,173 Awarded from debt applications

445 Creditor Petitions to the court

68 Petitions by the trustee in a Trust Deed

There was also a rise in legally binding debt management solutions such as, D.A.S (Debt Arrangement Scheme) with 478 approved. This is up 9% on the previous quarter and 15% compared with the previous year.

The LILA debt solution has also decreased by 12% to 1,204 compared with 1,368 in the 3rd quarter of 2010/2011.

From the the chart below we can the the increase in sequestrations (bankruptcy) and the decrease of protected trust deeds. The new trust deeds statistics are the lowest in over 5 years and while sequestration may have increased from the previous quarter they are the second lowest figures in over 5 years.

Trust Deed Statistics

From this above chart we can see a decline in traditional sequestration (bankruptcy) since the new route to bankruptcy called LILA (Low Income Low Asset) was introduced. LILA is a route into bankruptcy however it is a simplified form for people who have limited income and little or no assets. This is the reason there was an increase in sequestration when LILA was introduced in the first quarter 1 of 2008/2009. It would appear that this continued decline in personal insolvency is good new for the economy as it will mean that people are beginning to be able to pay back what they owe. The unfortunate news is that there is still a long way to go before we will back back at the levels of 2006/2007. This is a good sign that things are getting better but it will probably take more before we are economically safe again.

Trust Deed - How To Avoid Dishonest Organisations

2011-05-11T02:54:00.000-07:00

A Trust Deed is one of the most widely used debt solutions for people in Scotland, yet it is one of the least understood solutions. The Trust Deed debt solution has encouraged many debt companies to spring up and offer these solutions. One of the main benefits of the Trust Deed is that you only repay what you can afford, typically over a three year period, with the rest of the money you owe being cleared.

When a companies identifies someone as being suitable for a trust deed they will collect all the relevant documents from the client. Once all the documentation is collated it is sent to an insolvency practitioner who will pay the company for work carried out.

When a trust deed becomes protected the client will only pay back a proportion of the amount owed and so they are usually unaware of any fees or charges.

Tip: When speaking to an organisation who is going to refer you to an insolvency practitioner you can ask what fee they will get and how this will affect yourself. For the most part fees and charges for the trust deed will not affect you but it is within your rights to know anything that can affect you.

Many people have found themselves the victims of dishonest companies who have manufactured their circumstance so that they would meet trust deed criteria. In some instances the companies would charge the client a setup fee, or even carry out text marketing campaigns advertising that people could "write off 90% of their debt".

Tip: While it is not impossible for someone to pay back just 10% of their debt, it is unlikely in most cases, it also give a false impression to people who are vulnerable about what help is available.

Many of these deceitful trust deed companies have been closed down due to their business practices but new ones are alway opening up. It is also worth doing your homework before speaking to any organisation about your financial circumstances.

Tip: When looking for a debt solution like a trust deed, be careful to not speak with any organisation who have contacted you by text as this will generally be a marketing campaign. One option to stay safe when looking for debt advice is to speak with a debt charity. Also check for a charity registration number and search google to confirm this.

Money Manager Tool

2011-05-11T02:45:00.000-07:00

The demand for a debt help tool is greater than ever before and in this article we will discuss an application which enables you to record you income, expenditure, debts and payments to debts in once easy place. We will explain how to use the money manager tool and why it has been created.

A money manager tool is a device which will take a person's income and expenditure and then show how much available income they have. There are different tools which will offer a range of options, these can include;

Income and Expenditure.
Dates and times of when money came in and out
Debts

Some of these tools may be free online organisers while others may be mobile applications.

How to use a money manager tool

When using an online money manager tool a person will be required to register and sign into the application. This enables their details to be stored. Once logged on there will be an option to input income and expenditure which will then tell the user how much money they have left over each month. Some applications will have an option to include a users debt, this will then give the final summary of;

How much a person spends
What they spend money on
How much they pay to their debts

In some cases a person may well be spending more than they have coming in. When this happens the online finance tool will help the person to see where they can save money.

Why this tool is needed

As more people are finding themselves struggling to manage their finances the need for a money manager tool has grown. When trying to find a solution to a debt problem many people will need an income and expenditure in order to make proposals to creditors. This tool means people will have their income and expenditure ready when they need it and have an acute understanding of their finances.

How the Money Manager will help people.

This online application will give people the chance to find out where they can save money as well as know what they are spending money on. Many people have found that the reason they got into debt was because they were unsure of where their money was going. The money manager gives people the tool to effectively manage their finances and take control of their finances again.

Debt Solution - Protected Trust Deed

2011-05-11T02:29:00.000-07:00

Protected Trust Deed is a debt solution which was introduced 1985 and has had a range of changes since then. A protected trust deed was introduced to help people pay as much of their debt as possible and stop them having to become sequestrated. This option is only available to people who reside in Scotland the English, Welsh and Irish equivalent is an IVA.

If someone meets the criteria and wishes to go ahead with a trust deed then an insolvency practitioner (I.P) will collate all the relevant documents. Once the I.P has all the documentation they will advertise the trust deed in the Edinburgh Gazette in order to let all creditors know about the proposal. If 1/3 in value or a majority in number of creditors do not refuse the offer then the trust deed becomes protected. Before considering a protected trust deed it is important to understand the criteria, positives and negatives of this solution.

Criteria

Need to be able to make a monthly payment to your creditors of at least £125
Unsecured debt must be £10,000 or more
Need to be in full time employment
need to be able to repay a minimum of 10% of the money borrowed over the course of the protected trust deed to your creditors

Positives of a Protected Trust Deed

Only one monthly payment to the debt
Interest and charges will be frozen, Unless the Protected Trust Deed fails at any stage, or you receive a windfall, then it is a requirement that interest and charges are repaid.
Will not have to liaise with your creditors as the insolvency company will do this on your behalf
Once a Trust Deed is signed it become protected and therefore means you and the creditors will be legally bound by the agreement, which means if the agreement is complete you will be debt free.
A homeowner may be able to retain their property, the Insolvency Practitioner will only be interested in any available equity
Will have less of an effect on a persons credit rating than if they entered sequestration

Negatives of a Protected Trust Deed

If there is any available equity within a property this may have to be included in the Protected Trust Deed proposal
A Protected Trust Deed may adversely affect a persons credit rating
Employment contract may not allow someone to enter a Trust Deed - they would need to check this with their employer
If someone enters a Trust Deed and does not meet the terms of the agreement they are likely to face Sequestration
A person will have their income and expenditure reviewed regularly and their monthly payments could fluctuate up as well as down

Debt Analyser and Money Manager Tool

2011-05-11T02:20:00.000-07:00

A new online debt analyser tool has been created and is now able to help people with financial difficulties. The new tool will ask a user questions which will help to find the best solution to their debt problems.

In order to use the debt analyser people do not need to log in but simply to fill out the questionnaire. There are 5 sections within the online tool, these are as follows ;

Personal Details
Assets & Liabilities
Expenditure
Income
Result

Personal Details

This will ask the following;
Name
Email
Telephone number
Will give the option for a call back
Region
Notes

Asset & Liabilities

This will ask the following;

Do you own your property - If yes, what is the estimated value
How much do you owe to your mortgage
Do you have secured loans against your property
How do you owe in secured debt
Current equity
Do you own a car
How much is your car worth
Is your car purchased on HP
How much payment is outstanding
Do you have any other assets
How much are they worth
Current Assets

Unsecured Liabilities :-

This will include the following;
Total credit card debt- How much is owed and how many creditors
Total debt from overdrafts - How much is owed and how many creditors
Total store card debt - How much is owed and how many creditors
Total unsecured loans - How much is owed and how many creditors
Total catalogue debt - How much is owed and how many creditors
Total unsecured debt - How much is owed and how many creditors

Expenditure - This is a list of monthly outgoings

This will ask the following;

Mortgage / Rent
Mortgage / Rent Arrears
Secured Loan(s)
Secured Loan Arrears
Endowment
Council Tax
Water Rates
House / Building Insurance
Electricity
Gas
Oil
Entertainment
Telephone
Mobile Phone
Car Hire Purchase
Car Insurance
Car Tax
Car Maintenance
Petrol / Diesel
Food
Clothing
Child Support Maintenance
Life Insurance
Child Care
Transport / Travel
TV License / SKY / Cable
Dental Plan
Opticians
Medical Costs
Contingency
Outstanding Fines
Student Loans
Other
Total

When completing the income and expenditure it is important that all information is as close to accurate as possible. There is a guideline which many organisations will use to determine what is a suitable amount of spending for each outgoing.

Your Income - This is a list of all money coming in on a monthly basis

This will ask the following;
Take home pay
Partner take home pay
Child benefit
Working tax credit
Pension
Partner pension
Income support
Jobseekers allowance
Incapacity benefit
DLA / AA
Child maintenance
Other income
Monthly Income

Result This will give the best debt solution based on the information which was provided. In some instances you may have two or three available debt options. In this situation a qualified debt advisor would have to discuss the advantages and disadvantages of each solution to enable you to make a decision.

Introduction to a Protected Trust Deed

2011-05-10T07:38:00.001-07:00

http://ukdebthelper.blogspot.com/Introduction to a Trust Deed

Roughly 9,000 enter a Trust Deed in 2010. It's a popular solution for people living in Scotland and in debt. It has a number of benefits including only repaying a percentage of the money you borrowed, with the rest being potentially cleared. There are a number of different debt solutions for people in debt. We're exploring the positives and negatives of the Trust Deed.

Like all debt solutions there are positives and negatives. The Trust Deed is becoming a more popular debt solution, with hundreds of companies looking to offer this debt solution. However the Trust Deed solution comes with a warning and should be considered with great care.

What are the negatives?

With the rise of the Trust Deed debt solution we've seen an increasing number of complaints to the Office of Fair Trading because of unfair practices. This means that people who are not suitable for a Trust Deed are being told it's the right debt solution for them. The money made by companies because of people entering a Trust Deed can be astronomical. This article confirms the truth behind the negatives of the Trust Deed debt solution.

The negatives of a Trust Deed include;

- If you fail to meet your contributions then you would be likely to face Sequestration.
- Your equity within your house must be taken into consideration. Some companies fail to explain that if your equity has not been dealt with by the end of your debt solution then you may have to sell your house.
- Your credit file will have a default on it for 6 years.

When is a Trust Deed right

In many instances the Trust Deed is the right debt solution. When you have severe debt problems and you realistically cannot repay your debts with your available disposable income, then a debt solution is required. If you have equity within your property which could pay your debt in full then you would not be able to enter a protected trust deed.

Who do I speak to

If you have debt problems then you have a choice who you tell. Some people don't even want to tell their closest family. It's essential you get the help you need. We've created some top tips when deciding who to contact for debt help.

1. Never speak to companies who text, email, mail or telephone you. They are the companies most likely to be making the most profit by charging you for simple advice which a free charity could offer.

2. Never feel pressured by a company into signing anything. If they are pressurising you then they are more concerned by the money they can make and will not really care about your financial situation.

3. Check for a consumer credit licence. If the company doesn't have a consumer credit licence then they are breaking the law and not a legitimate debt advice company.

4. Google. Check Google for feedback from other people.
5. Never contact a debt management company. Some for profit companies will only offer one solution- a debt management plan. The debt management plan can be useful for some people, however it is an informal arrangement with your creditors any companies only need a consumer credit licence to administer this solution. If a company only offers a debt management plan and no other solution, then you can quickly find yourself in a long term (40 years) debt management plan.

The options for debt advice

There are a number of options for people in debt and looking for help. Most people recommend speaking to a debt charity because they are not profit focussed. Other people prefer immediate face to face debt advice. In this instance you may need to pay for advice out of your own pocket. Free debt advice can be found at a number of debt charities, with the citizens advice bureau offering face to face charity advice.

The Individual Voluntary Arrangement (IVA)

2011-05-10T07:32:00.000-07:00

An IVA is the Equivalent of a Protected Trust Deed but is only available in England, Wales and Northern Ireland. IVA's have helped thousands of people who face severe financial problems.

Ms E had went through a divorce over five years ago and lived with her grown up kids in a rented house through her local authority. She had debt outstanding at approx £40,000. Her debts were two loans and a couple of credit cards.

After the divorce there was only her income and Child Support payments from her ex husband. As the kids were 18 she didn't receive any child support and was struggling to pay her creditors. She was robbing Peter to pay Paul and had reached her limits on both credit cards.

After looking at all avenues Ms E has decided to enter an IVA.

The nominee looking after her case had sent out the proposal to Ms E and also to her creditors. Ms E had a disposable income of £300 per month. The monthly contractual payments for debt added up to £920 per month.
The meeting of the creditors took place and the vote went in favour of the IVA to go ahead meaning that in five years Ms E could look forward to a new beginning. Ms E now pays £300 per month into her IVA and will pay this until the IVA is complete at the end the rest will be legally written off. All interest and charges were frozen. (Unless the IVA terms are not met then these can be added back on).

Ms E could now see light at the end of the tunnel and had no assets that the supervisor would consider liquidating so she now had peace of mind.

To be suitable for an IVA you would need to meet the following criteria;

- Unsecured debt must be £12,500 or over
- You must have a monthly disposable income of £200 or greater
- You must live in England, Wales or Northern Ireland
- You must be in full time employment

Benefits Of An IVA

Your IVA would be legally binding meaning no further charges or interest could be added. It also means your creditors are not able to change their mind if they agree to your proposal

You will only be asked to make affordable repayments

An IVA enables a professional person (doctor, accountant, solicitor etc) to continue to practice whilst resolving their debt problem

Bankruptcy may affect their professional status. You may have to check your employment contract to ensure you can enter an IVA

You are likely to be able to keep your home within an IVA, usually
the Insolvency Practitioner will only be interested in any equity

You would face fewer credit restrictions entering an IVA compared to bankruptcy

Negatives Of An IVA

Any available equity in your house or other asset would have to be released for your creditors

An IVA is legally binding so defaulting on the agreement would result in your IVA failing, which could mean your creditors will proceed with bankruptcy

Your income and expenditure will be reviewed on a frequent basis which can mean your monthly contribution could fluctuate up as well as down

Your IVA would be noted within your credit file and it would remain there until you complete the IVA, and for a year after that

An IVA usually lasts for 5 years, whereas Bankruptcy would only last for 1 year

Bankruptcy & Debt Relief Order (DRO)

2011-05-10T07:27:00.001-07:00

Bankruptcy is the oldest debt solution and is considered the last resort when facing financial worries. In this article we will discuss a case which led to bankruptcy and how it was dealt with.

Miss G has run up debts of over £20,000. She lives with her parents and does not have any assets that she could sell. She has one child and has had her income slashed as she has had to go part time.

After all avenues were explored the solution for Miss G was Bankruptcy. After paying the fee of £450 for the insolvency service for the Official Receiver. As her income decreased she did not have to pay court fee due low wages.

Bankruptcy was then granted. Miss G did not have to pay any money every month as her income is low. Miss G will be discharged from her Bankruptcy after 1 year. Miss G is aware of the impact on her credit file but there was no other solution available to her.

Criteria For Bankruptcy

- You cannot realistically meet any other debt solution
- Your unsecured debt must be above £750 to enter bankruptcy
- You will need to complete forms provided by The Insolvency Service

Benefits Of Bankruptcy

- You will no longer have to deal with your creditors
- Once your bankruptcy is completed you will be able to start again financially without any debt
- You stop making any payments to your creditors

Negatives Of Bankruptcy

-Your credit rating is likely to be severely affected
-You cannot credit of £500 or more without disclosing you are bankrupt
-You cannot be a director of a limited company
-You may lose your home and car
-There has been some new routes to bankruptcy added over the years, these include;

Debt Relief Order(DRO)- This is only available in England, Wales and Northern Ireland but gives people in severe financial trouble the option of declaring themselves bankrupt without the same cost or hassle. The criteria for a debt relief order is;

Not have unsecured debt exceeding £15,000
- Not have any assets exceeding £300
- Not own your property (i.e. Own a home with a mortgage)
- Not have available disposable Income after normal household expenditure exceeding £50
- Be domiciled in England or Wales, or in the last 3 years have been resident or carrying on business in England or Wales
- Not have been subject to a DRO within the last 6 years

Also, you cannot apply for a DRO if you are currently Bankrupt, in an IVA or have a current Bankruptcy Restrictions Order or Undertakings or have current Debt Relief Restrictions or undertakings.

Protected Trust Deed and IVA - 'Clear Debt'

2011-05-10T07:26:00.000-07:00

A common problem within the debt industry is the lack of clarity around debt solutions. Some websites state that it's "Easy to write off 100% of your debt" and "become debt free today". The Office of Fair Trading is clamping down on firms stating that this is possible. This article examines the truth behind the solutions where you can repay a percentage of your debt, with the rest being cleared at the end of the solution.

The debt solutions people talk about when it comes to 'writing off debt' includes the IVA and Protected Trust Deed. If you are made bankrupt you will also clear the debt you cannot afford to repay. All of these debt solutions will negatively affect your credit rating because of the default. A default on your credit rating will last for 6 years.

The IVA debt solution

The IVA (individual Voluntary Arrangement) typically lasts for 5 years and you would repay a percentage of your debt. The minimum repayment over the 5 years must be 25% however most people repay a lot more. The proposal is put to your creditors at an official meeting and if they accept the proposal your IVA will be in place. The criteria for an IVA is

- debt of at least £12,500

- minimum disposable income of £200

- at least 3 different creditors

A key criteria for the IVA is that your equity (value of your house minus what is owed to your mortgage lender) within your property does not exceed your debt and 5 years of monthly contributions.

The Protected Trust Deed solution

The Protected Trust Deed is similar to the IVA but is only available to people living in Scotland. There are legal differences between Scottish law and the rest of the UK when it comes to debt.

The Protected Trust Deed would last for typically 3 years and at least 10% of the debt must be repaid over the course of the solution. The Trust Deed is signed and advertised within the Edinburgh Gazette. After 5 weeks, if there are no objections (or less than a majority in number or a third in value) then your Trust Deed will be Protected. The criteria for a Protected Trust Deed is;

- debt of at least £10,000

- Minimum disposable income of £150

- at least 2 different creditors

If you have a house with equity then the money tied up in your house should not outweigh your debt and 3 years of monthly contributions.

There are websites, TV adverts, newspaper columns and leaflets which claim to offer miracle solutions to deal with debt. The truth is that "clearing your debts" is not as simple as it's suggested but there is a route to resolve all debt problems. It's essential when dealing with debt you speak to a not for profit charity with qualified debt advisors who can provide you with honest, transparent debt advice.

There are a number of ways to find debt charities you can trust, including using Google and searching for debt advice charity or even speaking to friends and asking for their help.

Debt Support Trust is a registered debt charity providing debt advice on Protected Trust Deeds and IVAs. The charity offers a wide range of support from benefits advice through to help with bankruptcy advice.

Avoiding Credit Card Debt Problems - Debt Advice And Support

2011-05-10T07:24:00.000-07:00

Credit cards are a way of life for people all around the world. Credit cards can be a useful tool which support us all when we are needing a little financial help. When waiting those extra couple of days before pay-day it can also help to have the ability to buy that treat for ourselves.

While it can be useful to have a credit card because you actually can use credit cards without racking up credit card debt as long as you have the knowledge and the will to do so. While most people will use the their credit facility wisely many have found themselves using the card to pay for the day-to-day cost of living, especially when they are out of work or having financial problems already.

The best way to manage your credit card debt is to manage your finances. This means setting up an income and expenditure to be able to see how much money is left over each month. Sometime people may find that they have less money at the end of each month than they did to begin with. In these instances reductions in expenditure will be required if possible.

Start by writing down all of your income and expenses. Household expenses include your phone, gas, electric, tv and any other household costs. Now subtract your expenses from your income. If you have a negative income you will need to cut what expenses you don't need to come into a positive. It is also a good idea to figure in money for emergencies (if you don't have an emergency fund) and money to put into savings.

Now that you have your budget set, you will need to stick to it and not over spend where it is unnecessary to do so. If in debt then it would be best not to use credit facilities (until after the debt has been resolved) which could further your problem.

If this method doesn't work/help then it would be best to seek professional debt advice from a charity/company who will be able to offer a range of solutions including general advice, debt management, iva, trust deed, lila, debt relief order, bankruptcy and sequestration. For some of these solutions a person may need to have more debts than credit cards but it would not be exclusive.

While a lot if these solutions can be hard to understand or to asses but there is help available to those who want to know what options they have at their disposal.

LILA, Bankruptcy, Certificate of Sequestion

2011-05-10T07:17:00.000-07:00

Mr & Mrs P received a Charge for Payment, this gave them 14 days to pay their debt off or legal action would be taken against them. The two weeks past and they hadn't made a payment since this was received which means they were now Apparently Insolvent. This means that they could use the charge for payment as a reason to declare themselves Sequestrated (Legal name for Bankruptcy in Scotland).

Mr P worked full-time but was on a low wage and Mrs P stayed at home in order to look after the kids. There was £21,450 debt and it was all loans which were in joint names. After considering all options Mr & Mrs P decided that sequestration was the best option for the them.

Once they had decided that this was their best route out of debt they only had to wait until their creditors petitioned the county court for the couple to be declared sequestrated.

There is a two new forms of sequestration which now gives the person in debt the chance to declare themselves sequestrated. These new debt solutions are called

- Certificate Of Sequestration - This is similar to sequestration except you don't need to wait for creditors to make you sequestrated and the criteria as follows;

- You must live in Scotland (or have lived in Scotland within the last year)
- You must not have been bankrupt in the last five years)
- Owe at least £1500 in unsecured debt
- You must pay a fee of £100 to submit your certificate of sequestration to the Accountant in Bankruptcy (AIB)
- To receive the certificate you must use an insolvency practitioner (IP) or someone who works for the IP and has been given authority to act on his behalf. You can also visit your local CAB, approved money advisors for DAS or your local authority money advisers
- Only the person in debt can be granted the certificate - creditors cannot apply for this
- On the day the certificate is granted the person in debt then has 30 days to apply for their bankruptcy. All applications made after the 30 days will be rejected and they will lose their £100 fee. The process would then need to start over and a further £100 would be charged.
- The debtor will be required to provide evidence with their application to help the AIB so that identity can be confirmed and that they qualify for the bankruptcy. Acceptable evidence will be payslips, bank statements, proof of benefits if applicable.
- Also required would be tenancy agreements and HP agreements if they have any.
You can get a copy of the Accountant in Bankruptcy Certificate for Sequestration here, however it must be completed by an IP, approved money adviser, CAB or local authority money adviser.

LILA (Low Income Low Asset) - As the name suggests this debt solution is for people with low income and low value assets if any. the criteria for a LILA is as follows;

The criteria to enter Sequestration via the LILA route is;

- Your income must be less than £237.20 based on a 40 hour week
- If you are on income support, income based jobseekers allowance or receiving working tax credits then you would have met the low income test. This will apply even if you are earning more than £237.20
- You must be unable to meet your current repayments and charges
- You cannot own property or land
- The cost for LILA is £100 and is payable to the Accountant in Bankruptcy
- If you get any monetary windfalls or inherit any property or land you would need to let your trustee know as this may need to be paid to your sequestration
- You cannot start up or be involved in the day to day running of a limited company
- You are unable to act as a Member of Parliament. Other restrictions include not being a member of a local council or on a school board etc
- It will be difficult for you to obtain credit after you being discharged

Secured Loans - Debt Advice And Support

2011-05-10T07:16:00.000-07:00

Secured loans require a person to sign something in their possession against the loan. The reason it is called a secured loan is because the creditors can take possession of that which the credit was taken against if the loan repayments are not made.

When people secure credit against an asset they are generally able to get more in return. An example of this would be when someone takes out finance against the equity they own in their property. They could find that at time they are able to apply for more money than they would if they weren't to secure it against the property. This is usually because the creditor feels that the person is less of a risk and they will be able to recover the amount owed if they fail to make payments.

Many people have seen the benefits of secured loans and have managed to pay back what they owed without having their possessions being reposed. However this isn't always the case and in some instances a person can find themselves struggling to manage their finances if they lose a job or have other personal problems.

The main disadvantage of secured credit are those people who do not manage to pay back what they owe may find themselves at risk of losing their assets. Sometimes the temptation of a large sum of money can be too much to resist. This is especially true of those who have refinanced because they are in debt and unable to find another solution which could help them.

Those who have refinanced in order to repay other debts can find themselves owing even more than they did originally. There is a number of debt solutions which can help those who have found themselves in this situation. When trying to asses which of these solutions is most suitable it is advised to speak with a debt advice charity/company. The solutions which can help are;

General Advice - This is best for those who may need to cut back on expenses but are not suitable for any other help

Debt Management Plan - this can arrange for regular payment to be made to the creditors

IVA - For those who are unable to pay back what is owed in full but is not suitable for bankruptcy. This is only available to people living in England, Ireland and Wales.

Protected Trust Deed - Similar to an IVA but is only available to people living in Scotland. The main difference is simply the criteria needed to meet the requirements for these solutions.

Bankruptcy - The final solution when all else fails is to petition the court to legal declare bankruptcy. This is only available in England, Ireland and Wales

Sequestration - This is the same as bankruptcy except only available in Scotland. The only difference between these solutions is the criteria which is required to meet them.

LILA - A new debt solution which has been introduced to help people who could afford the cost of making themselves bankrupt, still manage to be declared insolvent. This is only available in Scotland

Debt Relief Order - Same as LILA except for the criteria need to be met. This solution is only available in England, Ireland and Wales.

The trade association whose members account for approximately 98% of all UK mortgage lending has stated that new house loans returned to the same levels as December 2007 levels. In addition, the remortgage market has seen a stabilisation of growth over the same period of time. According to data published by the Council of Mortgage Lenders, the number of loans that went to home movers rose by 15% from September to October 2009. A significant number within that group opted for a tracker mortgage loan, a loan where the interest rate rises and falls in line with the Bank of England base rate. This is believed to be an indication in borrower confidence that rates may remain low for the long term.

New Trust Deed statistics revealed!

2011-05-10T07:12:00.000-07:00

New debt statistics have revealed how many Protected Trust Deeds are being administered per postcode. These new debt stats were collated by Debt Support Trust and formatted into a table in order to show which postcode was the largest for protected trust deeds.

From the new debt statistics it is clear that of the 7,980 protected trust deeds (KY11) Inverkeithing had the largest amount between 2010 and 2011 with 144 while TD4 (Earlston) had the lowest number over the year with just 1 case.

The new information has been released in the form of a table which can be searched in order to find a specific postcode. The information has also be released with information to help everyone understand what the statistics mean.

The five largest postcode areas for protected trust deeds are shown below in the list.

KY11 - 144 Inverkeithing
ML5 - 114 Coatbridge
ML6 - 113 Airdrie
EH54 - 110 Livingston
G81 - 105 Clydebank

The general postcode regions have also been collated which means people can see a general overview of which regional postcode was biggest for a Protected Trust Deed.

Note: It is worth remembering that these stats while useful are not linked to per 100,000 population. This means that we while the G postcode may be the largest for a Protected Trust Deed it is also the largest per population and therefore faced a higher chance of having the largest Protected Trust Deed. This information can help to see what effects can create debt and help to stop it in future. For example, In an area where a large factory has closed down and people have faced redundancies it is useful to know wither or not this area was large for protected trust deeds as it could have had an impact.

This information was collated after the released statistics from the accountant in bankruptcy who administers protected trust deeds. The information was then broken into individual postcodes and listed from largest to smallest.

Please note there is a discrepancy of 7 between the 7970 Protected Trust Deeds and the 7973 postcodes.
The statistics have also been split into a pie chart which shows the regional postcodes for each Protected Trust Deed.

The introduction of certificate of sequestration last year also contributed to a large decrease in the number of people who entered a Protected Trust Deed. This new debt solution allows people to apply for sequestration without the need to prove they are apparent insolvent and therefore have their creditors seek sequestration.

Personal Finance - Tips and Support

2011-05-10T07:06:00.000-07:00

In this article we will discuss personal finance and how people manage their money. Personal finance is something that many people still do not feel educated enough about or able to understand. This can cause many problems when people find themselves unable to manage their finances and unaware of just what help is available.

While most people over the years have relied on social help i.e benefits or pensions, this isn't something which can be relied upon as much today or even in future. This has been the case since the recession began and the cut backs took effect.

It is important when working out your budget each month that the person paid first is you followed by priority creditors (mortgage, secured loans etc). There would be no point in giving creditors the money you need to live and then having to go further into debt just to survive.

This is an important factor when working out your budget and it must be done. If payments are not made to priority creditors, then you could find it harder to get out of debt in the longer run.

It is important to make sure that you are protected against any changes which could cause debts to arise. This may be as a result of sickness which could reduce income or a family incident which could mean an increase in expenditure. One way which people can secure themselves against these factors is by having a savings account. By putting money way each month when times are good it can reduce the impact when you are struggling.

While there are fewer jobs than before due to the recession it may be worthwhile looking for a second job if you are struggling financially. This could offer the extra money needed to solve any money worries you have and may be a short term solution.

While most jobs are not able to pay enough to balance out the cost of living due to the recession, it could still help you put a little extra money in your pocket each month. The income from one job may not be enough to pay for the rising cost of food, gas, electricity etc which is why it is important to consider other options for income. This could be mean a second job which is part-time or even finding out if you are entitled to other benefits. The more options you have financially the better you may be prepared for the future.

Those who have money aside at the moment may have enough to start considering an investment into the property market. With house prices at rock bottom prices, if you have available income you can get a good deal if you are purchasing a house. This could be seen as an asset for the future or even just as extra income through rent. Another good source can be online as new innovative business options are arising all the time. It is advised though that caution is taken when looking online for extra income as people have found themselves the victims of scams.

"Robbing Peter to Pay Paul"

2011-05-10T06:59:00.000-07:00

There are millions of people across the UK who have debt, however that debt is manageable and whilst we might begrudge paying the interest each month we know it's possible to repay our debt eventually.

Some people become entrenched in debt, struggling to find the solutions to resolve long term financial problems, often resulting from another issues such as a marital breakdown or loss of job. When the difficult financial times come, it's easy to understand why people would want to resolve the problems themselves - using their own initiative to move credit card balances to get the best deal, avoid paying high interest and charges and ultimately pay off their debt.

The difficulty for many people arises when there is no longer any credit card available, no loan or further credit on offer. When financial times get tough, it's important to accept that in some instances qualified debt experts could be required - not another loan!

When debt problems are coming through the letter box or via the telephone;

- Face it head on
- Stop looking for a loan
- Ask for debt advice from a qualified debt advisor at a charity, such as Debt Support Trust or Citizens Advice Bureau

Debt Help and Support - IVA

2011-05-10T06:58:00.000-07:00

While IVA's have been increasing most people are still unaware of what this debt solution has to offer and how it can benefit them. In this article we will discuss what an IVA is and how it can help those facing financial problems.

IVA's were created to help people pay back a portion of their debt and to stop people from having to declare themselves bankrupt. IVA stands for Individual Voluntary Arrangement, this is a formal debt solution which is legally binding once it begins. Creditors like IVA's because they generally receive more of they are owed than if the person in debt were to file for bankruptcy. Debtors like IVA's because it doesn't have as a severe effect on a persons life i.e they are able to keep their house, the payments are more manageable and while their credit rating is badly affected it isn't as bad as it would be with bankruptcy.

Only qualified professionals can administer an IVA. This is usually an insolvency practitioner but there are a number debt advice charities who can offer debt advice which would not cost anything to those requesting help. These debt advice charities can help to package an IVA for the debtor. Once a person has spoke to a debt advice charity they will be taken through an income and expenditure. This will show how much money the debtor has left each money to pay towards creditors after all expenditure is taken from the income. Which will help to ascertain just wither or not they are suitable of an IVA. If advised that an IVA is the best debt solution then the debt advice charity would pass all the case to an Insolvency Practitioner (I.P). All these details are put to your creditors along with a proposed monthly payment.

If a person owns their own property, then any equity they have available in their house will be included into the IVA proposal as part of the repayment offer. The insolvency practitioner will require a person to release any equity before putting an offer forward. This will then be put into the IVA fund which is offered to the creditors. If the property is jointly owned then only the debtors share of equity is normally considered under the IVA.

For the IVA to be accepted then more than 75% by value of unsecured creditors vote in favour of the IVA then it has to be accepted by all the unsecured creditors. If a person has 4 creditors and one of them is owed 76% of the total amount in unsecured debts then they will have the their vote would be the one that counted the most. So if they refused the whole IVA would be rejected and if they accepted then the IVA could begin, this would mean that it didn't matter what the other 3 creditors voted.

If the IVA is rejected then there is still chance for the debtor. This is because they do have an opportunity to re-submit an improved IVA proposal. If this is not an option, due to funds or other demands then it is best to go back and speak with the debt advice charity again and they can help to find another solution. It maybe that they will help setup an informal debt management plan. It is strongly advised that no IVA payments are missed but in most cases this will be understood and possibly written into the agreement. The IVA is a legally binding agreement. If payments are missed then there is a risk that the trustee can force bankruptcy. If a persons personal circumstances change then an IVA can be altered to reflect this as they can be flexible depending on the circumstances.

Different Routes Out Of Debt

2011-05-10T06:53:00.000-07:00

There are a number of routes a person can take in order to receive the help needed to get out of debt. In this article we will discuss these different options. Debt problems exist across the UK with millions of people in debt and thousands struggling to survive, so what is the best way to help those in need of financial help?

Since the recession began in 2008 we have continued to see an increase in the number of debt advice/management companies throughout the uk. Some of these companies will provide a free service to those in debt and some will charge a fee. Debt support can be provided by telephone based companies and some will be face to face but what is best for those who need debt help.

Citizens Advice Bureau which is a Government funded help service offering face to face help for a range of problems including debt. The charity has seen a rise in cases over the past 2-3 years. The increased demand for help from the Citizens Advice means they are dealing with a new debt enquiry every 6 minutes. Budget cuts along with demand means receiving debt advice can be difficult. A report by The Government Department for Business Innovation and Skills questioned whether a mix of telephone, internet and face to face debt help would be best due to the demand.

Telephone - A friendly option which gives people the chance to receive help quickly and have a solution which is customised to their needs. Certain organisations such as charity debt advice will be free to call and so will not be putting the client into further debt. However by speaking on the telephone it is not as personal as speaking to a person one to one which many people prefer.

Internet - This option is one that is continuing to grow and is a great solution for those who like the anonymity of the web. Advice can be provided without even speaking to anybody however this can be time consuming and difficult to understand for people in debt.

Face to face - This option gives people the chance to speak with someone who can take all the information into account and also give back a quick solution. However, this requires the person in debt to either travel to a meeting point and can therefore cost money. Alternatively the debt advisor will have to travel and to meet the individual which can again be costly.

There are three types of debt support organisations and these are broken into;

Debt Advice Company - When a person pays a company for their advice or for helping to manage their financial needs. This can be seen as a quick route however telephone based charities can offer a similar, impartial service. The debt advice company may favour a particular debt solution as it makes them more money. Also, the debt advice company may charge you for their service.

Government Funded Debt Advice - When the Government funds an organisation to offer debt advice. The best two examples of this would be, National Debt Line and Citizen's Advice Bureau. Any help or advice from these centres are free however may not be as quick an option due to having limited funding.

Creditor Funded Debt Advice - The best example of this is CCCS who are a charity funded by creditors for the work they carry out. This is also free to the person in debt.

There is many options available to people whether it is how they wish to communicate or who they wish to deal with. Speak to several debt advice companies before making a decision. Never pay for debt help and ensure the company you are dealing with has a consumer credit licence.

Scottish Debt Solution - Protected Trust Deed

2011-05-10T06:42:00.000-07:00

Scotland has an independent debt solution for people who face financial problems. It's an agreement between debtors and creditors for a debt repayment. This option was introduced to help people without them having to declare themselves bankrupt and to help creditors regain a portion of the money they are owed.

If a person is on the brink of bankruptcy it would be advised to seek professional help to asses whither they are suitable for a trust deed. The first thing people should understand is how a Trust deeds works, and what the criteria for this debt solution is. If a person has high unsecured debts and are unable to repay these then it could be the best option for them. While a Trust Deed is likely to have a severe impact on a persons credit rating, it is considered a better solution than bankruptcy A person owes 3 creditors a total of £25,000, if this were divided into;

£15,000 is owed to 1st creditor

£5,000 is owed to 2nd creditor

£5,000 is owed to 3rd creditor

This would mean that the 1st creditor would have the majority right and if they refused then it would not be accepted even if the other 2 creditors voted in favour. So long as the creditors agree to accept the payments then the debt solution can begin however they can object the offer within 5 weeks.

A proposal can be accepted if no objection is made or half of the creditors don't object. A creditor is official considered to be notified if a public notice is made in relation to the offer and they don't decide to make any objections. Once the offer has been accepted by the creditor then the trust deed becomes protected because it is then that it is legally binding. Trust deeds are legally binding so as long as a person does not default then the creditors will not be able to change their decision at a later date.

A trust deed can work out well for both the creditors and the debtor because the other solution would be bankruptcy, mean the creditors would get even less. Something everyone must know before going into a trust deed would be that all assets that are unessential to the creditor can be sold by the trustee and included into the trust fund. Commodities or vehicles can be sold if they are not used for work or any other essential need. The amount received from selling these item would then go into a pot before any proposal is made to creditors. If someone has equity in their property then this must be released. Again the money raised from this would go into the pot and once the trust deed is complete then the debtor would be better off then they would have been with an sequestrated. This is because with sequestration the debtor would be forced to sell any asset first. If a person is struggling to get a loan to release the equity then a family member would be allowed to do it on their behalf. Trust deeds help those living in Scotland to pay their debts without having to become sequestrated. While a person is likely to lose assets and possessions with a trust deed, the choice between this and sequestration is one which can't be taken lightly and leaves no choice for those who are in a financial struggle.

Introduction To Trust Deeds

2011-05-10T06:27:00.000-07:00

A large number of people in Scotland are entering the Protected Trust Deed debt solution. This is known as the IVA in England, Wales and Northern Ireland. Last years almost 8,000 people entered a Protected Trust Deed to resolve their debt problems. In this article we'll explain who is suitable for a Trust Deed and who would not meet the criteria

What is the criteria?

You must;

- Be able to repay at least 10% of the money you borrowed over a 3 year period

- Owe at least £10,000 unsecured debt

- Be able to pay £150 towards your debt each month

An example of a Trust Deed

Steven from Glasgow is 30 and married to his wife Karen. Steven has 5 debts (2 credit cards, 2 store cards and an overdraft with his bank) which totals £30,000. Karen has an overdraft totalling £1,500. Steven and Karen has a mortgage which has £100,000 outstanding. The value of the house is roughly 100,000 - there is no equity in their house.

Steven works full time and earns £1,300 each month after tax. The monthly expenditure for Steven is £1,000. So, Steven has £300 disposable income available to pay his debts each month.

The problem is that Steven's monthly contributions to his debts are £800. As a result, Steven is having to borrow money from other credit cards to meet his money payments. A debt management plan is one solution for Steven. If he managed to freeze his interest and charges he could have his debt repaid in just over 8 years. There is also a solution called a debt arrangement scheme (Scotland only) where he could enter a legally binding debt management plan type solution.

Steven would also be applicable for a trust deed as well as sequestration. The Trust Deed would see Steven repay an estimated 30% of the debt he borrowed over a three year period. If he completed the solution he would see his interest and charges, along with the rest of the money he owed, being cleared. Sequestration would also be an option for Steven, with Steven being discharged after one year from the Sequestration. As Steven has available money he would be asked to make a contribution towards his debt for a total of three years.

All debt solutions will negatively effect Steven's credit rating.

When would the Trust Deed not be applicable

Steven would not be suitable for the Trust Deed or Sequestration if the equity in his house was more than his debt. Karen would be entitled to half of the equity in the house, however if Steven had £50,000 equity in his house, then he would be entitled to half of this (£25,000).

The £25,000 along with 36 monthly payments of £300 towards his debt would see Steven repay more money than the actual debt he had

Protected Trust Overview

2011-05-10T06:00:00.000-07:00

There are a number of ways to become debt free for people in Scotland, including general money advice, debt management plan, Protected Trust Deed, refinancing or Sequestration.. One way in which people can solve their debt problems is with a Trust Deed.

What is a Trust Deed?

A Trust Deed is a formal, legally binding solution only available to people living in Scotland. The English, Welsh and Northern Irish alternative would be an IVA. In a Trust Deed you would repay arrangement a percentage of your debt at an affordable rate over a fixed period of time. A Trust Deed will usually last for 36 months however it can last for up to 60 months. If you complete your Trust Deed you will have a percentage of your debt cleared. Anybody entering a Trust Deed will be asked to make a monthly payment of at least £150. At the end of the solution the money you have paid will be distributed to your creditors on a pro rate basis. The disposable income paid each month is assessed based on your income and expenditure.

The Trust Deed process?

If you think a Trust Deed is right for you then you should consider speaking to a debt advice charity who can point you in the right direction. You would sign the Trust Deed which would then be offered to your creditors. The Trust Deed is also advertised in a publication called the Edinburgh Gazette. If your creditors accept the proposal your Trust Deed will become legally binding and ‘Protected’. The Protection binds both you and your creditors to the Trust Deed terms.

What’s the criteria for a Trust Deed?

You must;

- Be able to repay at least 10% of the money you borrowed over a 3 year period

- Owe at least £10,000 unsecured debt

- Be able to pay £150 towards your debt each month

Benefits of a Trust Deed?

There are advantages and disadvantages of a Trust Deed. You will asked to make one affordable payment towards your debt each month. The arrangement made in the Trust Deed with your creditors will last for a certain amount of time and it will be fixed so you can see the ‘light at the end of the tunnel’. As long as you fulfil your end of the agreement all interest and charges will become frozen and written off at the end of your solution. Another benefit is your creditors can no longer take any action against you once the Trust Deed is Protected. You will only repay a percentage of the money you owe – a minimum of 10% however the more you repay the more likely your creditors are to accept your proposal.

What are the disadvantages?

There are a number of disadvantages to a Trust Deed. Your credit file will have a default on it which will last for 6 years. This would mean obtaining credit in the future will be difficult. You will generally be able to retain your property, however you will have to release any equity within your assets. You will not be able to remain as a director of any organisation and would have to relinquish this position in a Trust Deed. You may need to sell your cars and downsize, however this is evaluated on a case by case basis. Any assets you own worth over £1,000 may need to be sold or the insolvency practitioner may look to release the equity.

How do I get a Trust Deed?

In 2010, over 9,000 people entered a Protected Trust Deed. The Trust Deed is not suitable for everybody however for people with serious debt problems it may the right option. To get a Trust Deed you first want to make sure there are no other solutions to debt which would be less harmful to your credit rating. The best people to speak to about a Trust Deed is a debt charity who will give you independent advice.