If you think your property may be in danger of being repossessed, do not leave things until it’s too late. There are many different organisations that can help you figure things out and the banks have been warned: do not repossess a property unless there is no alternative. Mortgage lenders now have to prove how they tried helping a defaulting client.

Mortgages aren’t all they’re cracked up to be. They’re costly and not for everyone. This means that some are considering taking a break from the property market and going back to renting. They are selling their properties to invest the cash somewhere else. This could mean that your finances look healthier and your lifestyle could improve, too.

If you finances were in a poor state before, because you could not afford your mortgage payment, then you may be saved from repossession and being made bankrupt.

But many people still feel as though renting is not really an option for them, and the long term goal is to own a home of their own, without any further mortgage payments. If this is your goal but you are struggling to make your mortgage payment, now is the time to think of ways to make things financially better. Consider renting out a spare room — there should be many around, with some of them being former homeowners.

This cut is a temporary one: it will last until the end of 2009 only.

Mr Darling announced the cut in his pre-Budget report on 24 November. The report has already angered Conservatives: they are calling Mr Darling a gambler who doesn’t want to give up. However, Chancellor Alistair Darling believes the cut should encourage consumer spending: it could mean consumers receive 12.5 billion pounds back in their pockets.

The government wants retailers to pass on the saving to consumers by offering price reductions. Retailers such as Currys, PC World and Dixons, as well as Marks and Spencer are planning to cut their prices and increase consumer confidence. However, basic groceries are not liable to VAT so the average Christmas dinner will not be any cheaper this year.

The government is planning to cut VAT, boost tax allowances and offer more cash to parents and pensioners.

What the pre-Budget means for you:

• VAT is reduced from 17.5 to 15 per cent until the end of 2009.
• Those earning more than £150 000 a year will be taxed at 45 per cent from 2011.
• Motorways, social housing and schools receive £3 billion.
• The rise in corporation tax has been postponed.
• National Insurance rates increase by 0.5 per cent from 2011.
• Pensioners’ credits are increased and they also get a £60 bonus this Christmas.
• Air passenger duty will be replaced by new system and long-haul passengers pay more.
• Child benefit credits increase in January, which is three months earlier than expected.
• Taxpayers receive a £145 rebate as compensation for scrapping 10p tax band from April 2009.

The credit crunch affects everyone, even those who do not need credit to pay for food, education, transport or accommodation. Everything is influenced by this because many businesses use credit.

Property

The mortgage market is a strange place right now. While the rates may still fall further, it has now gone into reverse and buyers need to think carefully about buying property.

Banks are not willing to lend much money. Those who are lucky enough to get mortgages will pay more for it, and they will need a larger down payment. Property buyers especially should make haste to get their mortgages approved.

The Economy

Some of our economists are expecting a recession either later this year – 2008 – or early next year. The growth of the economy has slowed down and the rise in inflation hasn’t helped. Lowering the interest rates may help, though it’s not likely to help much: the money markets are in too much turmoil at the moment.

Unemployment

In just the few months between May and July, nearly 140 000 people were made redundant. This amount makes it the highest rise since the early 1990s – the total stands at 1.7 million and some think it may be 2 million by this Xmas. Workers, especially those from the financial sector all over the world, are being laid off: 7 000 Chinese workers at a toy factory; 15 000 West Java workers; and many Fortune 500s let workers go.

Finances

The credit crunch is less harsh on savers; however, even they should be careful: they should make sure that their money is in a safe place. All banks are created equal but some are better than others. One good thing, however, is that banks are trying to attract capital and are offering better rates – 6.5 per cent in some instances.
Most medium- and long-term investments should be fine and those who invest now will get more for their money’s worth. So it’s not really all doom and gloom, even though the media wants us to believe that.

If you want your relationship to survive the money woes it is important that you and your partner discuss everything.

Does your partner know how much you are worth? Even financially secure couples may not know their partner’s net worth: the wife may have emergency money stashed away or the husband may have a secret club membership. There are even books out there which encourage women to hide money from their husband, but this should not really be encouraged if you want to be financially open with your partner, not even when spending money on luxury items.

Talk about your salaries, debt, and common financial goals. Setting up a budget is important - as long as you ensure that you both stick to it.  If the other partner doesn’t know you have a lot of debt, find a way to tell him or her. And do it before things start looking financially bleak or bleaker than what they are now.

Did you realise that you need to cut back on early morning espressos and satellite television early on, or was it a late revelation?

Easy credit has been a benefit to us, but it has also created a big problem: we have forgotten what it is like to save up money to buy a big item. Instead, we use credit cards, payday loans and any other form of credit to get what we want – now.

Are you like this, or are you more prudent? We would love to hear from you in the comments section. Let us know what changed your mind about credit. Have you burnt your fingers with a credit card or an unsecured loan? And we would be very interested to hear how long did it took you to find help from a professional organisation.

1. Ask Brian Preston, the Money Guy, for advice on money that ranges from the most basic to a bit more complex.
2. We owe much to the Quick and Dirty Tips empire that started with Grammar Girl some years ago. And Money Girl, one of the most popular personal finance podcasts, now dishes out advice on money and personal finance.
3. I fell in love with MSN Money months ago but only recently discovered On The Money. They have fewer podcasts than other sites, but have a fabulous UK flavour.
4. The Dave Ramsey Show is one of the most authoritative podcasts out there. If you don’t mind paying a couple of dollars a month you can get the full show. But the free one hour long show is as good.
5. The Feed the Pig podcast teaches better household budgeting, how to fix bad credit scores and much more. It has been running since March 2007 and has already gained authority; JD Roth included it in his podcast roundup.
6. A new Kiplinger’s Personal Finance podcast is available every second Tuesday. The episodes are short – only around 3-5 minutes and the site features an extensive archive.
7. The Plain Talk on Investing podcast has a new episode once every two weeks and uses plain language to discuss personal finance.
8. Financial Aid Podcast was featured on Top 100 Personal Finance Blogs and has a wide audience: students who want to find out about scholarships, parents who need information on personal finance and financial aid professionals who get the latest industry news.
9. I am a bit biased towards The Economist, it’s true. But in a good way. Their personal finance podcast has discussions with experts and are just long enough to pique our interest.
10. Can the Financial Times do anything wrong? Matthew Vincent presents the weekly FT Money Show and discusses questions such as ‘Can it still be cheaper to buy than rent?’

Could you do it? Not spend any money for a day. How ambitious a project would it be and would it be too difficult?

It is a worthy idea, though. We do not need most of the overpriced things we buy, never mind how much marketing companies tell us otherwise. Even if you only spend money on lattes, you could be using that money to pay off debt.

Challenge yourself to one day of no spending on anything. Do this once a month or once a week. During that day, reflect on what you would’ve bought and think if helps you in any way. Create a blog or keep an old-fashioned journal for the duration of the experiment. You will be in good company.

1. No legal obligation to pay many of your debts

The process of wiping your name off all debt is called discharge of debt. The reason for this is to reduce your debt and give you a fresh, new financial start. Whether you are filing for Chapter 7 Bankruptcy (straight bankruptcy) or Chapter 13 Bankruptcy (through an organisation), most, or all your debts will usually be cleared.

2. Stop foreclosure on your house

Chapter 13 Bankruptcy will be able to help you in the event of your home facing foreclosure. Please bear in mind that filing for bankruptcy in this respect does not eliminate mortgage payments on your property, instead it will structure a reasonable plan in order to repay your mortgage arrears.

3. Prevent your car or other property from being repossessed

Filing for bankruptcy can force your creditor to return any repossessed goods, including your car. This can only happen, however, if bankruptcy is filed quickly enough. Any past payments you have missed on your mortgage will be consolidated into your bankruptcy plan. Once you have filed for bankruptcy you will no longer have to pay the finance company. Instead, you will make monthly payments to the trustee of your bankruptcy plan, who will then make sure the finance company is paid.

4. Reduce/eliminate high medical bills

There are unfortunate incidences when an untimely accident or unforeseen illness can wreak havoc on a family’s financial circumstances because of skyrocketing medical bills. Filing for a Chapter 7 Bankruptcy will help reduce the amount of medical bills.

5. Recent loss of employment

According to studies, losing a job is one of the main reasons for filing for bankruptcy. No one should dismiss the possibility of losing ones job, no matter how indispensable you may be at your company. Job loss can happen to anyone, and at the most inconvenient of times. If a family is living off of 2 salaries, and suddenly one of those salaries disappears, their living conditions will change drastically.

6. Stop harassing behaviour and demands from creditors

Sometimes creditors will take drastic steps to get their money from you. Creditors have been known to become abusive and threatening if their financial needs is not met. They will continuously phone you demanding that you pay them their money back. Not only is this behaviour unprofessional and unethical, it could reach a point of becoming illegal. If you file for bankruptcy, your creditors are forced to stop their harassing phone calls and other inappropriate behaviour.

7. Restore or prevent your utilities from being terminated

If your home faces foreclosure, your utility bill may also risk being terminated. Filing for bankruptcy can prevent the utility company from leaving you in the dark.

8. Helps repay student loan debt

Although bankruptcy will not eliminate a student loan, it can consolidate your student loan debt. This will allow the debtor to make monthly payments through Chapter 13 Bankruptcy that they are able to reasonably afford.

9. Puts a stop to wage garnishments

Chapter 7 Bankruptcy will put a stop on wage garnishment, which takes away from your weekly earnings. Filing for bankruptcy allows you to still have enough money to purchase necessities for you and your family.

10. Challenge certain claims of fraudulent creditors

Filing for bankruptcy allows you to challenge any claims from creditors that you owe more money than you do. An attorney will be able to support you in this situation. Filing for bankruptcy with an attorney can stop fraudulent reporting by a creditor.

Instead of just being a basic list of links, we wanted to take things a step further and really rank these websites.

Therefore, we have looked at the following criteria; Google Pagerank, Alexa Rank, Feed subscribers and Technorati score and give each site a score out of 10 for the ratings and present you with the following results.

We have given each category’s results a score out of 10 e.g. if you have a low Alexa rating, which is a good thing, you will get a higher score on a scale of 1-10.

Blogs by Alexa

Blogs by Feed Subscribers

Blogs by Google Pagerank

Blogs by Technorati

Blogs by Total

Of course, we think all the finance blogs are fantastic so congratulations to all who made the list and congratulations go to Get Rich Slowly!

What is not surprising is that this may lead to a clash between borrower and lender, and that nearly sixty per cent of those polled fell into this trap.

Borrowing among friends or family is something that is not properly documented. This is once again highlighted by this research. How many people lend money to a friend who is in a financial quandary? Not even financial professionals are immune to the British debt culture. Nearly eight out of every ten professionals would be forced to ask family or friends for help at some stage. Of this total, 38% would borrow up to £500 and another 25% would borrow well over £1,000.

What this poll shows is that many Britons have to borrow money to fund their lifestyles or pay off debts. Interest rates are currently at a high level and with the credit crunch starting, we might see more of this trend. Twenty-five per cent of people admitted they have been borrowing £1,000 within the last year and nearly 60% of this group had a tiff with a friend or family member over this. This poll does a good job at highlighting the seriousness of this matter.

These same respondents were asked what they would do when they need money again. Would they borrow from friends or family again, or would they consider other options? Over 65% agreed that they might.

Because we trust our family and friends, we tend to be more relaxed about repayments. The poll revealed that over 58% of people had no legal agreements in place concerning repayment. Failing to repay a friend or family member may cost them money in the short-term, but sadly, you could lose their friendship and support, which is worth far more than the sum borrowed.