help from a debt charity

Don’t Fret About Debt

For many individuals due to many different reasons they find themselves in an almost impossible situation. They are in debt and they can see no way off paying it back.

Our advice is simple don’t fret, there are many different reasons why people find themselves in debt it can be redundancy, ill health, divorce the list is endless. Though the effect of debt can affect people in similar ways our advice is seek help as soon as you realise you are struggling with your debt, we all want to mange it and nobody wants to pay somebody to sort it out for them, however if we seek debt advice early enough we may have more options available to us at that stage.

In the first instance you want to speak to a charity people that are not there to gain anymore from you but will offer free debt advice. We recommend speaking to a debt charity.

In order for anyone to be able to give you the correct advice they will need to gain some information from you, they will want to know how much debt you have, how much income you have and how much expenditure you have. They will also enquire about any assets you may have. It is at this stage they will be able to offer you the best advice to suit your own personnel situation.

The advice varies from person to person as each personnel situation has to be taken into account. It could be for some they are missing out in benefits which they are entitled to, for others they may be advised to negotiate with their creditors and make token payments until they can get themselves back on their feet.

A Debt management plan may be an option which is an informal arrangement between you and your creditors in which you repay all the debt though over a longer period of time.

An IVA is another option where you repay a percentage of your debt and at the end of the term the rest is written off.

Bankruptcy is recommended when you have no disposable income and are unable to repay your debt.

For any of the above solutions you need to be aware of the impact they will have on your credit rating and that will last for six years.

Before entering any solution you must be aware of all the advantages and the disadvantages before you sign.

If you do find yourself fretting about debt call a debt advice charity they will offer you friendly advice and make you aware of the best way for you to become debt free.

Family Allowance Cuts to Be ‘Watered Down’ After Tory Revolt.

After a Tory backlash controversial plans to cut child benefit for the better off are being watered down.

The Chancellor George Osborne plan was to remove child benefit from any household where one person earned enough to pay the higher tax rate. However he is now making way to change this.

Nick Clegg confirmed this morning that the government is looking again at the child benefits cuts due to the 'unintended consequences' of the plans at the moment.

Nick Clegg the Deputy Prime Minister said the Government believed it was right to ensure that those on the highest incomes bear their share of the burden of deficit reduction.

Nick Clegg told Sky News: 'We've also equally accepted that there's an issue about how you do that, so you make sure you don't create these unintended consequences where, say, a family with one upper-income earner get child benefit removed when there's another family with two income earners who collectively earn more but keep the benefits.'

The original figure which was just over £40,000 now looks as though it will be raised as high as £80,000 nearly double what was first indicated.

The change is due to come into force at the beginning of next year, however it emerged yesterday that the Chancellor had different options for softening the impact of the change.

His options included raising income to £50,000, higher rate tax payers only receiving half the amount of child benefit or making payments only to families where the children are under the age of five.

However in a Statement issued last night by the Treasury they made no reference to higher rate taxpayers, they instead focused on those earning more than £80,000.

A spokesperson for the treasury said: ‘It is not fair to ask someone earning £20,000 to pay for the child benefit that goes to someone earning £80,000 or £100,000.’

Critics say the current proposal will unfairly penalise families where the mother stays at home and Tory MPs are putting pressure on Mr Osborne to abandon his current proposals.

The current plan is that all families in which one parent earns more than the 40 per cent tax threshold which is currently £42,475 a year will lose all child benefit.

This would mean a couple with two children could lose more than £1,750 a year. However provided neither partner pays the higher rate of tax a couple who between them earn £80,000 would still receive full child benefit.

Critics last night said the options being considered did not go far enough.

Mark Reckless Tory MP said: ‘None of these proposals addresses the unfairness of single-earner couples with a stay at home parent losing their child benefit while two-earner households with much larger incomes keep theirs.’

The original plan was unveiled by Mr Osborne at the Conservative Party conference in October 2010.

David Cameron said in January: ‘We always said we would look at the way it’s implemented and that remains the case.’ This gave the first glimpse of a possible re think.

However with the £1 billion planned saving the treasury has warned that softening the blow will wipe out most of the savings.

‘If you are a two-earner family on £84,000 you keep it, but if you are a one-earner family with three kids on £42,000 you lose £2,500 – where is the fairness in that?’

Ed Balls, Shadow Chancellor

Today Shadow Chancellor Ed Balls will force a symbolic Commons vote on the issue thus adding to the pressure.

Yesterday Mr Balls told Sky News: ‘If you are a two-earner family on £84,000 you keep it, but if you are a one-earner family with three kids on £42,000 you lose £2,500 – where is the fairness in that?’

Labour will also attack plans to cut working tax credit on thousands of part time or low income families.

Under new proposal, which are to be introduced next month couples who qualify for tax credits will have to work a minimum of 24 hours instead of the current 16 hours.

Mr Balls said for some families they would be ‘better off if they quit work’. The Treasury last night dismissed Labour’s claims

Parents Face A Fine For Taking Children On Holiday In Term Time

An option being looked at, is fining parents who continue to take their children out of school in term time, to go on holiday they are doing this to take advantage of the cheaper holiday prices on offer.

At the moment, if you allow your child to truant you can face a penalty of up to £100. However Ministers are concerned that more often than not the courts offer conditional discharges and that this threat of fine is becoming meaningless.

The proposal comes after a review of school discipline and attendance by teacher and behavior expert Charlie Taylor. Approximately 4.5million days of school are unattended due to pupils going on holiday, holidays are significantly more expensive when taken during school.

Head teachers it is believed authorize 75% of holidays taken, and they are second to sickness when asked for a reason for absence.

The concern for Ministers is that if middle class children can miss school for a holiday, the signal will be that truancy is acceptable.

A source at the Department for Education said: ‘Any time out of school has the potential to damage a child’s education. That is why the Government will end the distinction between authorised and unauthorised absence.’

Under achievement at school is caused from high levels of truancy Ministers believe, this can mean that children from poorer backgrounds do not reach their full potential as teachers are left unwilling to enforce attendance.

They also believe that the parents should have tougher penalties imposed on them and they should be more and more vigorously enforced by the courts.

Brian Lightman, general secretary of the Association of School and College Leaders, said: ‘The discretionary ten days has become a bit of a cultural expectation with parents viewing it as a right in some cases. It is not. Children only have one chance to get their education right and for schools to do their best for pupils. It is essential that children have good attendance.’

The National Association of Head Teachers said the measure would discourage parents from trying to put pressure on heads to sanction term-time holidays.

Research by travelsupermarket.com reveals prices increase by up to 42 per cent for a family of four taking a two-week trip to the Algarve during the school holidays.

A spokesman for the Department for Education said the proposals had been revealed as a result of leaked information and that they refused to comment on leaks.

Edwina Currie Says "Just Go Bankrupt"

Edwina Currie, a former politician was on BBC5 Live yesterday to tell people "Just go Bankrupt". Mrs Currie went on to say, you've "lived a very good life indeed" and that was why the caller was in debt.

Edwina was invited onto the show because she believed people were no starving in the UK because of the austerity cuts. The author and broadcaster clashed with Hayley Sanderson after the young mother claimed to regularly go hungry to feed her children.

Mrs Currie suggested that by living a life which was too good was to blame for being in debt. 'When the money was coming in, this sounds like there were two salaries coming in, and no savings, and life was being lived to the full and a very good life indeed,' said former junior health secretary Mrs Currie in a Radio 5 Live phone-in yesterday.

'But when that’s no longer the case, when there’s no longer money coming in, you have to evaluate whether you are going to be able to get back to the good life quickly or not. In which case, you are going to have to think about maybe declaring yourselves bankrupt.'

The young mother was then reduced to tears when she told Mrs Currie she had no credit cards, catalogue debts or satellite television, hit back.

'Edwina, I’ve never lived life to the full. I don’t go out every weekend. You’ve really upset me,' she said, bursting into tear.

'We don’t buy clothes on a weekly basis. We’ve never lived life to the full.

'I never said I’ve borrowed money from anywhere. I’m paying off old bills like council tax.'

Mrs Currie, who was a Northfield councillor from 1975 to 1986 and appeared on Strictly Come Dancing last year, had also probed Ms Sanderson on whether she had any pets.

Bankruptcy Advice

Mrs Currie went on to say "I hate to say this but you need to go Bankrupt". Huh?!!

That's crazy to provide this advice without a complete income and expenditure and evaluating a person's situation. The austerity cuts mean people struggle to survive and weathy, ignorant people like Edwina who are completely out of touch should not be invited onto radio programmes for subjects as sensitive as this.

Prediction that 400 Scots could go bankrupt every week in 2012

Accountancy Firm PKF has predicted that over 400 Scottish residents will go bankrupt every week in 2012 due to the continuing poor economics.

Sequestration (the Scottish term for bankruptcy) the firm predict that over 20,000 Scots will have entered this or a Protected Trust Deed (PTD) by the end of 2011 and that figure will continue to rise throughout 2012.

PKF predict a rise due to further cuts on the household budget; public sector cut backs, hours being cut and wages being frozen and no sign of an upturn in the economy.

The firm also warned that any increase in the base rate of interest would cause an alarming increase in the amount of homeowners going bankrupt.
A spokesperson for PKF said: “The dramatic rise in the number of more affluent Scots being made bankrupt is a further sign that the after effects of the recession are spreading among all sectors of society with the result that I believe all personal insolvencies will continue to rise and remain at high levels for several years to come.”

He also said since LILA came out in 2008 Scottish bankruptcies have steadily increased as many struggling Scots have taken advantage of this cheap way into bankruptcies when they have low assets and low income.

However recently these numbers have fallen and there is an increase in people entering a Protected Trust Deed .This they predict would peak in 2012 as job losses, overtime bans, no increase in wages and personnel circumstances all take their toll on the middle class in Scotland.

“People entering a Protected Trust Deed are more affluent as they have a disposable income and are able to pay something towards their debt“.

“Before the recession if these people were struggling with their debt they would release equity on the ever increasing property they owned , However nowadays property prices are stagnant and banks have a great reluctance to lend at such a volatile time“. This leaves many with little option.

Where To Turn When Debts Get Out Of Control

Hundreds of Scots are expected to face insolvency each week and we would like to look at their options.

As household finances continue to take a cut with more job losses and the public sector cuts more Scots than ever will be made bankrupt. If one of these could be you we recommend that you seek out your options as early on as possible this could mean there are more options available to you.

There are many reason people enter an insolvency some of which include divorce, illness, redundancy and overspending.

More and more Scots in middle incomes are entering a solution – quickest growing bankruptcy arrangements are designed for those with jobs.

If you reside in Scotland there are various options if you can no longer cope financially. The options vary depending on your own financial situation, so choosing the correct one is very important so that you should not incur any further difficulty.

Debt arrangement scheme

(DAS) this is where you commit to a debt payment plan, this allows you to repay your debt on one affordable monthly payment.
The length of time this last for varies depending on the amount of debt, and what you can reasonably pay towards it on a monthly basis.
If you are approved for a (DAS) all interest fees and charges are frozen and the creditors can take no further action against you. Your one monthly payment is taken then distributed amongst your creditors.

Protected Trust Deed

(PTDs) are on the rise, they are often used by the more affluent people with jobs and assets. This indicates that society is being affected on all levels.

A PTD allows you to repay as much as your debt as you are able with your assets, it is a formal arrangement made between you and your creditors. It lasts for approximately three years. A licensed insolvency practitioner will become the trustee and put a proposal forward to all your creditors, this will be based on all information you provide income, expenditure and level of debt, also any assets you may have.

To enter a PTD you must be able to prove you have disposable income and are able to contribute monthly something towards your debt.

It is the creditors decision as to accept your proposal and they are given five weeks to consider it. If enough creditors agree your trust deed will become protected and no creditor can take legal action to recover the debt. As long as you comply to repay the amount required within the agreed time any remaining amount will be written off.

Sequestration

The equivalent name for bankruptcy. There are two ways to enter this solution: a creditor can take you to court, if they are owed more than £3,000 this way they can raise bankruptcy proceedings against you, or for the cost of £100 you can make your own application thus avoiding any court action.

To do this yourself you must prove you are insolvent meet the Low Income, Low Assets (Lila) criteria or have a Certificate for Sequestration. Apparent insolvency will mean a creditor has started action over a debt and has served a charge for payment or a statutory demand.

After you have been awarded bankruptcy, a trustee will be appointed they will look after your insolvent estate. You will have to show all your assets and liabilities and you will have to prove your full income and expenditure. If you have assets they will be sold for your creditors; if you have any disposable income you may also be asked to make contributions. Some assets do not have to be sold for your bankruptcy and trustees have a guideline on how to deal with this.
As long as you co-operate with your trustee, you should be discharged from your bankruptcy after one year.

Low Income, Low Assets

(Low Income, Low Assets bankruptcy) Lila was introduced to help people who need debt relief but are unable to establish apparent insolvency.
It is suitable for people on very low incomes with few or no assets. In the last three years around 20,000 Scots have gone for this solution. This can provide short term relief from debt, however it stops many getting credit in the future and means for some there is no choice but to re enter bankruptcy.

Sequestration certificate

This is the newest kind of personal insolvency legislation; this was introduced for people not suitable for a Lila or a Ptd.
A Certificate for Sequestration is given by a money adviser or an insolvency practitioner, after gathering all information on an income and expenditure and receiving documentation (statements, pay slips, etc), they will certify that you are unable to pay your debt.

When you go this way into bankruptcy, you must sign the application within 30 days of signing the application pack.

Consequences

Sequestrations, PTDs and DASs all have a serious effect on your credit rating this normally lasts for up to six years.

Sequestration or a PTD should be entered as a last resort. They should not be entered lightly as they have a serious impact on your credit rating. For some with huge debt that they will never be able to clear they chose this route. Some creditors put so much pressure on people that they can suffer with stress because of their debt.

If you are having debt problems and are finding it difficult to repay your debt it is crucial that you seek debt advice as soon as possible.

December UK inflation rate falls to 4.2%

At long last there was some good news for the Bank of England to reinforce its forecast that inflation would fall back sharply in 2012. The main reason for the 0.6% drop from Novembers 4.8% figure was due to reductions at the fuel pump and high street clothing companies discounting their goods in order to woe customers. The downward trend has continued since its 3 year high of 5.2% in September 2011.
Whilst inflation is still above the Bank of England’s target of 2% inflation they will be reassured that inflation will be below their target rate by the end of 2012,with the continued downturn in the economy forcing prices to be kept in check supported by reducing energy prices.

With the probability that energy suppliers will continue to reduce their prices for electricity and gas this should help in the war against inflation ,adding support to the Bank of England’s Monetary Policy Committee’s to continue with its policy of quantitative easing asset purchases.
The Office of National Statistics who released the data said that December’s reduction to a six month low was attributed to a reversal in factors that forced up inflation in 2010.

Surprisingly The Office for National Statistics revealed that there was little evidence to show supermarkets heavily discounting food in December, however the cost of alcohol had a record monthly drop.

Analyst for Jefferies International, Marchel Alexandrovich said “The figure was bang in line with expectations. This is a beginning of a downward trend that will see inflation fall back towards 3% by springtime as the VAT rise drops out and energy prices fall.

He continued: "The inflation back drop will improve going forward which will make it easier for the Bank of England to do more quantitative easing in the next couple of months.

Debt Help Solutions

Debt help solutions for people in debt includes a debt management plan, trust deed or for people with serious debt problems an IVA.