January 2008 Archive
Posted on January 30th, 2008 in Repossession.
Falling into arrears on mortgage repayments and other borrowing is costing debtors more than they think, an expert has warned.
Louise Cuming, head of mortgages at prince comparison site moneysupermarket.com, claimed people experiencing problems meeting payments are being hit with "punitive and unjust charges".
She argued that while many lenders are keen to offer funds to borrowers, they are less sympathetic when the debtor struggles.
"Lenders aren’t charities but no one wins if they automatically burden customers with more fees and debt," Ms Cuming argued.
Many customers will be unaware that their banks charge for the letters they send, she stated.
Last year, Citizens Advice warned that vulnerable borrowers were being lent to irresponsibly, leading to an increase in repossessions and mortgage arrears.
It claimed that mortgage lending to those who cannot afford it does not help them towards a valuable asset but rather drives the debtor into debt and homelessness.
Posted on January 30th, 2008 in Debt.
Women tend to be less "financially fit" than their male counterparts, it has been claimed.
Nici Audhlam-Gardiner, head of mortgages at Abbey, has stated that on average, women are less likely than men to hunt out the best deals on financial products or to make savings.
She highlighted that 70 per cent of women do not have sufficient savings for more than three months, meaning they could not fall back on savings in an emergency.
There has been a trend for people to spend more then they earn, however, with the possibility of a recession looming, an increasing number of people are considering sorting out their finances, Ms Audhlam-Gardiner noted.
A recent Abbey survey rated consumers’ financial "fitness" based upon the financial products they use and how often they compare them and look for better deals.
It discovered that a third of women do not have the most competitive mortgage on offer to them and a quarter do not shop around to find the best insurance premium.
Posted on January 30th, 2008 in IVA.
Those struggling with their partner’s debt should be wary of continuing to use joint bank accounts, a publication has warned.
A woman married to a man with problem debts wrote to the Guardian newspaper, highlighting her fears that her husband will borrow against the house without telling her.
The situation is causing both her and her children a considerable amount of stress, she reported.
In response, the newspaper reassured the concerned woman that her husband cannot borrow against the house without a signed agreement from her.
Despite this, it warned there is still a danger in holding joint accounts or credit cards.
"Your husband could run up big debts and leave you with the bill. So break off any joint accounts as a matter of urgency," the Guardian urged.
Several organisations have published survey results which show debt levels contribute to stress not just for the borrower but for the whole household.
Debtors who are concerned their borrowing levels are putting their family’s wellbeing at risk could consider an individual voluntary arrangement (IVA).
Unlike bankruptcy, an IVA allows the borrower to keep important belongings such as their family home.
Posted on January 29th, 2008 in IVA.
An increase in the amount of financial advice available to Britons could lead to a reduction in debt and an increase in levels of savings, it has been suggested.
The Association of Independent Financial Advisers (AIFA) has claimed access to professional advice could see a reduction in indebtedness of almost £30 billion across 24 million households.
Chris Cummings, director general of AIFA, said independent financial advisers are a trusted source of online advice.
"Whether planning for retirement, reviewing investments or cutting credit card debt, independent research shows that consumers are financially better off once they’ve been advised by a professional financial adviser," he claimed.
However, for some debtors, the AIFA’s calls for increased advice come too late as they are already struggling with high levels of problem debt.
There are many routes out of debt available to such people, including individual voluntary arrangements (IVAs).
Such agreements allow the debtor to retain their home and make affordable monthly repayments.
At the end of the set period, usually five years, any remaining debt is written off, setting the borrower debt-free.
Posted on January 29th, 2008 in IVA.
Many Britons will have been shocked recently as their credit card bills reveal the full extent of their Christmas spending, an expert has claimed.
A spokesperson for price comparison and financial advice website Moneyfacts.co.uk has warned that many people remain unaware of the reality of what they spent until their bill arrives.
The spokesman urged: "When reality hits home and you see the size of your January credit card bill … why not see it as a kick up the backside to switch your credit card to a cheaper deal?"
However, for some debtors, changing credit cards is no longer an option as their credit rating has been left bruised by the increased cost of living causing them to miss paying bills.
Research conducted earlier this year by online comparison site moneysupermarket.com found 13 per cent of bull payers had skipped at least one payment last year, of which credit cards are the most likely to be missed.
For debtors facing bankruptcy as they run out of refinancing options, one possible alternative is an individual voluntary arrangement, usually known as an IVA.
