October 2007 Archive
Posted on October 31st, 2007 in Debt.
Last year 41 per cent of consumers used their credit card to fund their Christmas spending and 17 per cent of them have not yet paid the full sum back, new research had shown.
A study by price comparison site Savebuckets.com revealed only 29 per cent of last year’s Christmas borrowers managed to clear their debt when the bill arrived in January.
Marc Ames, marketing manager of Savebuckets.com warned: "With rising costs of living and interest rate hikes curbing spending power this year, it is likely that many will have to make cutbacks this Christmas."
The survey discovered that people on lower incomes were the most likely to still be paying for Christmas.
Earlier this month financial advice website Fool.co.uk reported Britons spend an average of £419 on presents for an average ten people.
It warned that Christmas could cause families "financial pressure" and reported that many people spent a whole two per cent of their annual income on one day’s festivities.
Posted on October 31st, 2007 in IVA.
An expert has warned that credit card providers have introduced more than 30 hikes in fees over the past month.
This is Money analysed figures collected by Moneyfacts and revealed rising fees for withdrawing cash and in interest rates as well as increases in commission on foreign use and greater fees for balance transfers.
It warned the increases "could end up costing consumers millions in charges".
For many people already struggling with debt in the face of the recent credit crunch, such increases could cause real problems.
However, one possible route out of debt is an individual voluntary arrangement which can cancel unaffordable debt and stop creditors pursuing the debtor.
It is arranged through an insolvency practitioner and allows the struggling borrower to make an affordable monthly payment for a certain period of time after which any remaining debt is written off.
Such an agreement can save creditors the time and money it takes to pursue the debt and they receive tax benefits for their losses.
Posted on October 31st, 2007 in IVA.
Britain’s personal debt crisis is "escalating" and debtors should take quick action to avoid becoming a casualty, a student publication has warned.
Nouse, the newspaper of the University of York, quoted figures from the charity Credit Action which reports that the country’s personal debt level rises by £1 million ever four minutes.
"Alarmingly, the UK is now responsible for a third of all unsecured debt in Western Europe," warned Nouse.
The newspaper called upon struggling borrowers to use their self-control to bring their debt under control.
One possible route out of debt is an individual voluntary arrangement (IVA), where the borrower agrees an affordable monthly repayment level for a certain period of time after which their debts will be written off.
The government suggests IVAs can be useful if the debtor cannot agree an informal arrangement with their creditors.
However, unlike IVAs, informal arrangements are not legally binding so there is a risk the creditor will discard it at a later date.
Posted on October 30th, 2007 in Debt.
Newly published figures have revealed Britons owe £216 billion through unsecured loans and credit cards.
The Bank of England’s most recent statistics show the country is becoming indebted by a further £15 million every hour, the Metro reports.
Moira Haynes, spokesperson for Citizen’s Advice, told the newspaper: "There [is] a lot of evidence showing people have overcommitted themselves. People are getting credit and it’s clear they are not able to afford it."
Recent figures from Citizen’s Advice revealed money worries now account for one in three of all enquiries and its advisers are dealing with more than 6,600 debt problems every day.
The charity’s chief executive David Harker said that a growing number of people are paying the price of Britain’s credit boom and are being "overwhelmed" by serious debt.
He called for creditors to be more prepared to negotiate with those in debt and do more to ensure borrowers are in a position to make repayments.
Posted on October 30th, 2007 in Repossession.
The Council of Mortgage Lenders (CML) has predicted the number of property repossessions will increase by 50 per cent next year as overstretched borrowers fall victim to high interest rates and the end of the house price boom.
It has warned it expects the number of repossessions to rise to 45,000 next year compared to an anticipated 30,000 in 2007.
Acting Liberal Democrat leader Vince Cable said: "The government must act now to curb irresponsible lending practices if the economy is to have a soft landing rather than a crash."
For borrowers who are already feeling the strain of high interest rates and who are concerned any further movement in the economy could cause bankruptcy, an alternative could be an individual voluntary arrangement (IVA).
An IVA puts a halt to letters and phone calls from creditors and helps debtors repay their debt at an affordable monthly rate. Unlike bankruptcy, it can help people protect key assets like their family home.
