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The Harrington Brooks Blog

News, comment and views from the team at Harrington Brooks.

New DRO and Bankruptcy threshold values to be introduced in September 2015

Posted by Peter Kelly on

New rules around debt levels and affordability will make it easier for people on low income to deal with their debts

What is a DRO?

A debt relief order (DRO) is a way for you to have your debts written off if you owe less than £15,000 (currently), and have very few assets and can’t afford at least £50 per month toward these debts. If you qualify, a specialist DRO team can apply to the Insolvency Service for you.

What’s the bankruptcy creditor petition limit?

This is the minimum level of debt that a person must owe to a creditor or lender before they can petition for your bankruptcy, in other words to apply make you go bankrupt. Currently standing at £750, the new rules will increase this to £5,000.

You can also become bankrupt by petitioning for you own bankruptcy as apposed to being made bankruptcy by someone else. Here you have to complete a financial statement and application form and hand it into your local county court along with your fee. We have a team that can do this for you.

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These rule changes will make it easier for the financially vulnerable to manage problem personal debt and avoid them being ending up in bankruptcy for low levels of debt. From 1st October 2015:

  • The amount of money a person owes (liabilities), in order to qualify for a Debt Relief Order (DRO) will increase from £15,000 to £20,000.
  • The amount of money a person can have in assets, in order to qualify for a DRO will increase to £1,000, plus a vehicle (worth not more than £1,000).
  • The maximum surplus income a person can have to qualify for a DRO will remain at £50 per month
  • The level of minimum debt that can trigger bankruptcy will rise from £750 to £5,000. The bankruptcy creditor petition level was last set in 1986.

It is expected that following the changes to these rules, an additional 3,600 people a year will be eligible for a DRO.

More than 140,000 DROs have been entered into since they were introduced in 2009. A survey of those who have used them reveals that 96% would have been unable to deal with their debts without a DRO, and 79% said the process had a positive impact on their lives.

The changes to DROs will not disadvantage creditors, because eligibility for a DRO will continue to be restricted to those with very low realisable assets and no surplus income and therefore no realistic ability to repay their debts. Realisable assets means items that can easily be sold to generate money.

Evidence showed that DROs help some of the poorest and most vulnerable people in society make a new start and improve their mental well being.

The changes have come about following consultation by The Insolvency Service, that sought views from industry, debt charities and other interested parties on the operation of DROs and the bankruptcy creditor petition limit last year.

Consultation respondents generally thought that the level of debts that can trigger bankruptcy was much too low, as people can be put through the most serious of the insolvency procedures for a debt as small as £750.

38% of credit reports contain errors says Uswitch

Posted by Jack Boardman on

uSwitch has found that more than one in three (38 per cent) credit reports contain errors – equating to nearly 5 million consumers.

The price comparison website said that the mistakes could be wrongly contributing to millions of British consumers being refused credit or missing out on the best rates for financial products.

Other findings from the report included:

  • Most common errors include incorrect credit products or services listed (39%), the wrong address (23%) and the wrong name of the bank or company that provided credit (18%)
  • Of the 12 million who have been turned down for credit, 26% have turned to a payday lender and 21% to a pawn shop
  • Only 38% of those who were turned down were automatically told the exact reasons why by the lende
  • Over 15 million consumers have never even checked their credit report, with a fifth (20%) of these saying they didn’t know they had one or that they could check it

 

Following the findings, uSwitch launched, ‘It’s My Report’, a campaign with the backing of over 12,000 consumers, who are calling for a fairer approach to the way consumer credit reports are created and shared.

There are 3 main credit reporting agencies; Experian, Equifax and Credit Call. They provide factual information to lenders and other services providers about individuals. While the may have their own credit score for you, there is no universal credit score that determines your credit worthiness. In theory all three agencies should have the same information for you; but you would not know for sure without checking all three.

Check your credit report for free

Credit reporting agency Credit Call, under the brand name of Noddle.co.uk offers a free service which shows your credit report – instantly. Payments and balances on all loans in your name are shown, which companies have made a credit check against you, plus other useful information.

You’ll need to enter your debit/credit card details, but this is just a security measure – no payment is taken. The information is not live as a new report is published once per month.

For more information on credit reports and what you can do to improve your credit rating; please see Advice Centre -> Credit Ratings And Reports

 

Harrington Brooks Making a Difference this Christmas with Tree of Life Centre

Posted by Jack Boardman on

As well as the success of this year’s Mission Christmas, Harrington Brooks staff have managed to raise huge quantities of food for the Tree of Life Centre in Wythenshawe.

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Francess from Tree of Life visited One Advice headquarters to explain to staff the difference their donations will make this Christmas.

Staff throughout the One Advice Group have been giving generously throughout December, picking up an extra tin here and there on lunch breaks, and on some days entire trolley loads. A call for copper coins in the plastic piggy banks on all desks at HB totalled over £200 – a notable tribute to the importance of saving the pennies as several more trolleys of breakfast cereals and cupboard goods were added on top of the ample contributions left in the drop-off boxes around the building.

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A snapshot of the mountain of food, Harrington Brooks staff raised this Christmas.

Harrington Brooks have been proud to work with Francess Davies-Tagoe and Tree of Life, donating long-lasting non-perishable food for low-income families this Christmas. Francess and Heidi Wilson paid a visit to the One Advice Group’s offices in Sale this morning, explaining how each little contribution helps and giving thanks to our Marketing team, Culture Club, and the thoughtful HB employees who gave so generously.

The Tree of Life mission statement is “to work in partnership with others to create a sustainable resource which improves the health and well being for people in Wythenshawe.” The food bank is just one of the great deeds Tree of Life offer the community – not least collecting furniture and offering classes from Tai-chi, craft groups, complementary therapy, to stop-smoking classes, mental health drop-ins and a disability jobs club. So if you would like to volunteer for this great charity, or have furniture or clothes that could go to a good home instead of the tip, please visit the Tree of Life Centre website for more information and contact details.

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Tree of Life’s Francess Davies-Tagoe (left) and Heidi Wilson (third from left) met with members of Culture Club and staff who helps organise Harrington Brooks’ food bank donations.

Another Successful Mission Christmas at HB

Posted by Jack Boardman on

Harrington Brooks staff go all out for another successful Mission Christmas campaign.

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Mission Christmas hopes to raise £1 million worth of toys, making Christmas special for a child living in poverty.

Every year, 150,000 children in Greater Manchester – where the One Advice Group and many of our staff are based – spend Christmas time in poverty.

That is why, in 2013, Harrington Brooks joined the Key 103 Cash for Kids Mission Christmas campaign. Mission Christmas hopes to raise £1 million worth of toys, making Christmas special for a child living in poverty.

Harrington Brooks were delighted to announce the grand total of 552 presents raised in 2013, with staff getting involved, inter-department tournaments to see who could raise the most, and our IT team’s room just about bursting with all of the presents this time last year.

And so staff of Harrington Brooks and the One Advice Group couldn’t wait to get involved in Mission Christmas 2014, with the Marketing team very content to be sat among all of the presents by their desk.

As our HB Culture Club members transport our donations to the Mission Christmas warehouse in Trafford, we’re delighted to announce a running total of approximately 340 presents.

Our diligent Compliance department take the title for most presents raised for 2014 and, once again, we are very proud to have supported such a great cause.

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Team Compliance managed to raise the most presents at HB this year.

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Creative Content Writers make room for presents beneath their desk.

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Mission Christmas raises presents for boys and girls of all ages.

Government To Introduce Bank Accounts For Those With Poor Credit History

Posted by Jack Boardman on

Basic bank accounts are to be introduced for people with bad credit history by the end of 2015.

The new accounts will not allow overdrafts or cheque books, and will not gain interest, but without the risk of falling into the spiralling nature of bank charges for failed payments and slipping, unaware, into reserves or unauthorised overdrafts. Current charges are from £6-35 for failed payments when direct debits and standing orders bounce.

Click to read the revised basic bank account agreement

Click to read the revised basic bank account agreement

The accounts are designed to help those unable to open a current account due to bad credit records. Wages, benefits, tax credits and State pensions will be paid directly into the accounts, and customers will be able to pay bills online. Customers will be provided with debit cards making ATM and over-the-counter transactions possible.

Nine banks, including The Co-op, Barclays, HSBC, Lloyds, Nationwide, RBS and Santander have committed to providing such accounts by 2016. The announcement of the new accounts comes after a deal with the nation’s major banks by the Treasury, allowing people to manage their money with “certainty and clarity.”

Andrea Leadsom, Economic Secretary to the Treasury stated:

“It will end people being effectively locked out of their basic bank accounts due to high fees and charges when their payments failed.

“Ending this unfair situation is a real step forward for the banking industry’s most vulnerable customers and improving access to banking is a key part of our long-term economic plan.”

Money Advice Service to Cut Jobs to Save on Costs

Posted by Jack Boardman on

Treasury-commissioned review of Money Advice Service (MAS) reveals the group are to drastically cut costs and nearly two thirds of staff.
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The Telegraph has today reported on an independent review of the Money Advice Service, revealing recommended staff cuts of full-time staff from 130 to 50, reducing the MAS budget from £81.1 million to between £50 – £65 million.

The report, by Christine Farnish, the former head of the National Association of Pension Funds, was picked up by The Telegraph who have recited that the biggest cuts should be felt by the money advice arm of the organisation, sparing the division that focuses on debt management.

Harrington Brooks staff support the Tree of Life Food Bank this Christmas

Posted by Jack Boardman on

This Christmas, Harrington Brooks are supporting the Tree of Life Centre in Wythenshawe.

Tree of Life, working in partnership with Bideford, Royal Oak and St. Luke’s Centres, have organised a food campaign to make a difference to low-income families this Christmas.

Harrington Brooks staff have gotten behind the food bank, diving straight in with generous donations of long-lasting non-perishable food.

In the spirit of charity and money management, staff have seen the importance of saving the pennies as well as the pounds, donating their copper coins and change in a fund-raising effort for the Tree of Life and competing to see who can guess how much was raised.

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Household Debt Set To Rise Higher than Before Financial Crisis

Posted by Jack Boardman on

A new Government report forecasts British household debt is to become higher than on the eve of the global financial crisis.

The Office for Budget Responsibility (OBR) have published ‘Economic and Fiscal Outlook’, a report forecasting an increase in the household debt to income ratio. The date presents the household debt ratio rising to 184% of incomes – considerably bigger than the 169% ratio of 2008 before the global financial crisis.

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Household gross debt to income forecast from the Office for Budget Responsibility’s ‘Economic and Fiscal Outlook’

The OBR previously made a forecast in March. Now the level of gross household debt is expected to be approximately £174 billion higher by the beginning of 2019 than predicted in March. The revised level is due to factors including an upward revision to household income, with the level of household disposable income now forecast to be 1 ¼% higher than expected in March, following upward revision to historical data which more than offset a weaker forecast for wage growth.

Read here for more information on rising household debt.

Harrington Brooks supporting Financial Education at the MHA Wellbeing Day

Posted by Jack Boardman on

On Wednesday 3 December Harrington Brooks will be involved in delivering a Wellbeing Day for year 10 students (age 13/14) at Manchester Health Academy (MHA).

Harrington Brooks have been working alongside MHA Head of Numeracy, Kieran MacHugh, and Head of Literacy, Allison Cowan, to effectively communicate health and wellbeing to students in keeping with Financial Education in the national curriculum.

On Wednesday 3 December Harrington Brooks will be involved in delivering a Wellbeing Day for year 10 students (age 13/14) at Manchester Health Academy (MHA).

On Wednesday 3 December Harrington Brooks will be involved in delivering a Wellbeing Day for year 10 students (age 13/14) at Manchester Health Academy (MHA).

Financial Education, a new addition to the national curriculum, sees the subject taught as ‘financial numeracy’ as part of maths and ‘attitudes to money and debt’ as part of citizenship. Children aged 11-14, in Key Stage 3 learning “the functions and uses of money, the importance of personal budgeting, money management and a range of financial products and services.” Pupils aged 14-16 in Key Stage 4 will learn about “wages, taxes, credit, debt, financial risk and a range of more sophisticated financial products and services.”

Manchester Health Academy, based in Wythenshawe, are co-sponsored by the NHS Foundation Trust and the Manchester City Council. Their ethos of “Learning for a healthy future” echoes the Financial Education syllabus’ aims of improving financial literacy in younger generations to address the trap of problem debt tomorrow. With our extensive experience and knowledge of financial managements, Harrington Brooks are proud to be involved in the community, educating future generations about good money management.

“Financial understanding is a key life skill. Children need to understand the value of money and how to interact with financial service providers to provide for their own futures. The skills they will learn in class, combined with the experience of having their own savings product, will better equip them to avoid financial problems in later life.” – HM Treasury, 2007.

The session at 10.25 to 11.35 has been chosen as the feature session of the MHA Wellbeing Day. Also present at the MHA will be Wythenshawe FM.

For more information on Financial Education, see our blog.

FCA Issue New Rules for Credit Brokers

Posted by Jack Boardman on

The FCA has published a new policy statement on credit broking, highlighting tougher rules.

The changes arrive following the FCA’s “significant concerns” over credit brokers who charge upfront fees to consumers, with 41% of FCA complaints received in relation to credit broking – 80% of these complaints are about online brokers charging upfront fees.

The changes arrive following the FCA’s “significant concerns” over credit brokers who charge upfront fees to consumers, with 41% of FCA complaints received in relation to credit broking – 80% of these complaints are about online brokers charging upfront fees.

The new rules on credit broking will take effect from 2nd January, 2015, and include:

  • A ban on credit brokers charging fees to customers, and from requesting customers’ payment details for that purpose unless they meet FCA requirements.
  • Credit brokers must ensure customers are given clear information about who they are dealing with, what fee will be payable, and when and how the fee will be payable.
  • Fee-charging brokers must notify the FCA of the websites they operate.
  • Brokers must include their legal name (as it appears in the FCA Register) in all advertising and all correspondence with customers.
  • Advertising must clearly state that the firm is a credit broker and not a lender.

 

Read the  FCA’s new policy statement here.