Latest figures from the Insolvency Service have revealed that more and more people are entering into Debt Relief Orders.
In total 6295 people have entered into a debt relief order in England and Wales in the second quarter of this year. This represents an 11% rise on the first quarter of 2010 and a huge 218% rise compared with the same period of 2009.
Debt relief orders were introduced by the government as a means of allowing people to apply for personal bankruptcy without having to go through the full court bankruptcy procedure. The order lasts for one year and fees are just £50 making it a much cheaper option that bankruptcy.
However to qualify for one you must fit into certain criteria and so if you are in debt it is recommended that you first get professional advice to find out if a debt relief order is the best option for you.
Posted in: Debt Management, Personal Finance.
Tagged: Bankruptcy · debt · debt relief order · personal finance
UK household finances came under increasing pressure in the last month according to research by Markit and YouGov.
According to the Household Finance Index despite the growing economy people are increasingly worried about losing their jobs and higher costs of living.
Of the two thousand households questioned as many as 30% stated that their finances had worsened in the last month. In comparision just 6% of householders claimed that their money situation has improved. Just under 70% of respondents reported a rise in the price of goods and services from July to August.
Economist at Markit, Tim Moore said ‘Stronger growth in the UK economy has done little to put a floor under the downturn in household finances.’
Posted in: Personal Finance.
Tagged: personal finance
The number of people in the UK taking out payday loans has quadrupled since 1996. This is despite some companies charging interest rates as high as 2,500% a year. With these high interests in mind there have been calls for the industry to bring in more safeguards to protect vulnerable lenders.
These figures on payday loans have been revealed by consumer watchdog Consumer Focus. The research suggests that as many as 1.2 million people are now taking out a loan of this type each year with combined borrowings now as high as £1.2 billion.
For many people taking out a payday loan is a simple way of getting short term credit. If the loan is paid back quickly then it can be a cheaper option than a credit card or an unauthorised overdraft. However if the loan isn’t repaid then debts can escalate very quickly.
There have been many cases of people taking out loans finding they get into financial difficulties. However the payday loans industry states that when managed properly the loans are an easy to understand and low risk option.
If you do find yourself short of money at the end of the month as you wait for payday then taking out a loan of this sort can be a good choice so long as you remember that it is only a very short term option.
Posted in: Personal Finance.
Tagged: consumer debt · financial products · payday loans · personal finance
The number of people declaring insolvency in England and Wales has dropped for the first time since 2007.
In the second quarter of this year (April-June) there were 34,743 personal insolvencies, a drop of 3% on the first quarter of 2010. However with insolvencies reaching a record high at the start of this year it is clear that there is still a long way to go in economic recovery.
In response to these figures Brian Johnson at accountants HW Fisher said ‘Its encouraging to see that bankruptcies are down but don’t be misled by this. The fact that both debt relief orders and individual voluntary arrangements (IVA) are still creeping up shows that we are not in the clear yet.’
‘Many consumers are still highly stretched financially and public sector spending cuts are only going to make things worse over the course of the next two years.’
The total number of insolvencies is made up of combined bankruptcies, individual voluntary arrangements and debt relief orders.
Posted in: Bankruptcy, Personal Finance.
Tagged: Bankruptcy · consumer debt · insolvency · IVA · personal finance
Over 80 percent of UK shoppers have changed the way they shop in an attempt to cut costs and reduce debt.
This is the conculsion of a study by banking group Santander who looked into how the shopping habits of the UK public have changed during the current economic crisis. According to the research over half of the people questioned now shop around for the best deal when buying their groceries. Over a quarter of those have gone as far as switching to a cheaper supermarket.
With money problems and debt being a factor in many peoples lives it is no surprise that people are looking at ways to reduce their costs. Shopping around for the best prices and cutting down on unnecessary purchases is a great first step in preventing and reducing debt problems.
Posted in: Debt Management, Personal Finance.
Tagged: consumer debt · debt · personal finance
Almost a million people in the UK are struggling alone with debt problems. This is the conclusion of a study by insolvency organisation R3 which revealed that despite financial problems many people aren’t receiving any professional help or advice.
According to the research a number of reasons are stopping people from getting help with their financial difficulties. Of the people questioned 44% felt that their debt problems weren’t significant enough to warrant seeking help. However greater than one in five (21%) said that they would prefer to try to just ignore the problem rather than seek advice.
In the UK free debt consolidation advice is available from many organisations. However many of those questioned were not aware of this, with almost half believing that they couldn’t afford to get professional help with their debts.
For anybody who feels that they are struggling to keep up with their debt repayments the first step should always be to seek impartial advice. This can provide them with the answers to their financial problems as well as information on the best options available.
Posted in: Personal Finance.
Tagged: debt · personal finance
If you’re suffering from overwhelming debt problems then getting an IVA could be the best option for you. So how long does it take to get an IVA?
Since every individual voluntary arrangement is unique there is no default answer to this question with the length of time it takes to set up the IVA varying from case to case. Generally a straight forward IVA will take around 8 weeks to set up while a more complex case could take up to 12 weeks.
Setting up the IVA involves working through a process that begins with an initial assessment to determine first if you qualify for it. If you do qualify then after further research the insolvency practitioner working on your behalf will approach your creditors with an IVA proposal. A creditors meeting is then arranged in which the individual voluntary arrangement is either formally accepted or is rejected.
Fortunately it is possible for you to influence how long it takes for you to get your IVA. The insolvency practitioner responsible for your IVA relies on having access to all the necessary information and documents. By providing this information quickly you can help to speed up the process. Similarly you can assist by making yourself available to answer any questions that might arise once this documentation has been received.
Posted in: IVA.
Tagged: debt · IVA
UK banks are ‘ripping off’ their customers according to Business Secretary Vince Cable. Speaking to the BBC, Mr Cable said that forcing banks to change their practices would be a key test of the coalition government.
He said ‘When we talk about about restructuring the banks whats going to come out of this is a more competitive system where the customers are not ripped off.’
‘One of the negative side effects of the crisis is that our banking system that was already very concentrated is now even more concentrated so theres less competition, less choice and bigger temptation for banks to earn margins at the expense of their customers.’
Mr Cables comments come as research reveals that some high street banks are charging as much as 167% interest on unauthorised overdrafts,
Posted in: Personal Finance.
Tagged: banks · personal finance
Latest figures have shown that you are more likely to be declared bankrupt or enter into an IVA if you live in the North East than anywhere else in England and Wales.
Insolvency trade body, R3 recently published a ‘bankruptcy map’ revealing the regions that have seen the highest proportion of new personal insolvency cases. R3 looked at total numbers of bankruptcies and Individual Voluntary Arrangements (IVAs) and found that people in the North East are almost 70% more likely to become insolvent than those in London.
Overall there were almost six thousand new personal insolvency cases in the North East meaning that for every then thousand people, 29 become insolvent. By comparison in London there were just 17.1 personal insolvency cases for every ten thousand people, significantly lower than the national average of 24.3.
The top ten persoanl insolvency hotspots in England and Wales are -
- Torbay, South West (45.8)
- Kingston upon Hull, Yorkshire and the Humber (40.7)
- Lincoln, East Midlands (39)
- Plymouth, South West (38.8)
- North Tyneside, North East (37.4)
- Gateshead, North East (37.1)
- Corby, East Midlands (37)
- Hastings, South East (36.9)
- West Devon, South West (36.9)
- Thurrock, East Anglia (36.7)
Posted in: Bankruptcy, Personal Finance.
Tagged: Bankruptcy · debt · IVA · personal finance
People who have been made bankrupt are being treated unfairly by UK banks and building societies. This is the opinion of Citizens Advice who claim that many banks will not allow bankrupt individuals to open even a basic account.
Of 17 banks and building societies contacted by Citizens Advice only two would allow an undischarged bankrupt to have access to an account, this is despite there being no legal justification behind this.
Citizens Advice chief executive, Gillian Guy said ‘Most people take having a bank account for granted but, without access to one, basic tasks such as receiving wages or benefits and paying bills can become huge and costly obstacles to overcome, particularly for people who are often at a vulnerable point in their lives.’
Posted in: Bankruptcy, Personal Finance.
Tagged: Bankruptcy · banks · financial products · personal finance
