DIY Bankruptcies

December 4th, 2009

Such is the extent of the mounting backlog of bankruptcy applications in the UK; the government is proposing to introduce a new system of online, self-service insolvencies. Essentially, for those people who which to declare themselves bankrupt, they will be able to avoid the trip to court and the huge queue that it entails. In some areas of England and Wales, the wait can be as long as three months between making the initial application to the court and being granted a bankruptcy order. This is a huge amount of time for those facing the most severe financial difficulties to wait for an injunction to save them from their creditors. The new measures are intended to cut this highly stressful and potentially damaging waiting time from months to days.

Of course, bankruptcy should be the debt solution of last resort when you find yourself facing the problem of mounting debt. After all, your home and other assets could be sold to help pay off your creditors. Also, after your living expenses are deducted from your earnings, the remainder might be used to make monthly payments to your creditors as the result of an Income Payments Order. Not to mention the lasting implications on any future career plans and damage to your credit rating. Bankruptcies are also listed in your local newspaper so there is the stigma surrounding insolvency to deal with too. If you were thinking that these things, as difficult as they may be, it is worth remembering that your student loan, outstanding fines, child support arrears some other debts aren’t covered. It’s essential that no-one look upon this as an easy way out of quick-fix debt solution.

There are other debt solutions out there and it is imperative that you seek out specialist debt advice as soon as you find yourself in financial difficulty. The sooner you address the problem, the less severe the solution. Everyone’s financial circumstances are different so to find a solution that suits you try the free, 15 second debt wizard at Harrington Brooks, one of the longest established financial institutions in the UK.

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IVAs and Bad Credit

December 2nd, 2009

Is a bad credit rating preventing you from getting the finance you need? Are you struggling with high levels of unaffordable debt? If so, you may find that a debt solution, such as an Individual Voluntary Arrangement, could prove to be the debt solution that you are looking for. Of course, a debt solution should not be viewed as a means of further extending your already stretched finances as you will not be borrowing any further money but instead making your existing debt more affordable.

However, so much of the modern world relies on the availability of credit; be it in the form of an overdraft at the bank, the mortgage on your home, the hire-purchase agreement on your washing machine or your credit card, and it can be tempting to fight debt by getting yourself into further debt in the hope of consolidation these into one smaller payment. The key to the control of your personal finance could be in the professional management of these credit streams and you don’t need a debt consolidation loan to do this.

Help with this is available from a number of outlets, you have the option of talking to a specialist debt advisor at Harrington Brooks, which is one of the longest established financial practices in the UK. Their online Debt Wizard can give you an outline of the debt solutions that would best suit your financial circumstances. Obviously, no two people will be facing exactly the same economic situation. They will be able to offer you insights into a personal debt solution that will hopefully help you to avoid bankruptcy.

The Individual Voluntary Arrangement, or IVA, is proving to be a popular alternative to a declaration of insolvency. This is a formal agreement between you and your creditors and it was first set out in the 1986 Insolvency Act. Its popularity has increased significantly in recent years though, as individuals have started to recognise it as a viable and attractive alternative to bankruptcy. The procedure is handled by an Insolvency Practitioner who brokers an agreement between you and your creditors. It hinges on 75% of your creditors (in terms of debt value) agreeing to a repayment schedule that will have you pay off a proportion of your total debt over a given period, usually 60 months. After this time, any remaining debt is written off. The percentage afforded to your creditors is determined by the amount that you owe to each of them.

An Individual Voluntary Arrangement has a number of key benefits over a declaration of bankruptcy. Firstly, it allows you to avoid the stigma associated with bankruptcy as it is not publicised in newspapers. Also, although you may have to relinquish some of the equity in your home, you will be able to hang on to it. For further information, please contact Harrington Brooks who will see if you qualify for an IVA which can help manage personal loan debts, outstanding credit card balances and other forms of unsecured debt amounting to over £12,000.

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Show caution with store cards

December 1st, 2009

Some distressing news has emerged from a recent piece of research by a high profile consumer group, which suggests that the rates of interest are unrealistically and even exploitatively high. Not only that, the findings expressed the view that these cards were easier to get than they should be; encouraging people to take on greater levels of debt than they can afford to service and tempting them towards serious debt problems and even insolvency. As much as this activity can be judged from an ethical point of view, in reality there is relatively little that can be done to prevent it. The only response open to consumers is to take an educated, grown-up approach to this type of credit and manage the debt efficiently or avoid it altogether.

Taking the example of a graduate with a pre-existing backlog of student debt, with earnings amounting to less than a thousand pounds over the year, they would be able to achieve £3000 worth of debt, spread across a few stores. Not only are these store cards a notoriously expensive way to borrow, some have such high rates of interest, those over 25%, that they must come with a warning to potential borrowers that cheaper rates of interest for credit are available elsewhere. However, such is the ease of qualification for this type of store credit that these warnings and high interest rates may not serve to put off individuals that have struggled to attain credit from other streams. This is an already vulnerable section of the marketplace but luckily, there are avenues of assistance open to those people facing dept problems.

Although spending on store cards is often curtailed by a lower credit limit than is available with a standard credit card, the aforementioned high rates of interest and the sale of these cards by under qualified staff in high street stores, who tend not to be interested in their customer’s suitability for credit, amounts to a risky debt scenario. It’s quite a common problem too, with Finance and Leasing Association estimating that there are almost 15 million store cards currently in circulation, amounting to about £3 billion worth of store credit. These figures are the result of the accessibility of store credit, at the very check-out where you can begin to build up the debt.

Harrington Brooks are one of the longest established financial institutions in the country and are only a phone call away if you are looking for expert advice about how to deal with your debt. If you think you need some debt advice, try the free, 15second debt wizard at Harrington Brooks to help you find the best debt solution for your circumstances.

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I am a Celebrity, get me an IVA!

November 30th, 2009

It’s a bit of a chicken and egg thing really. What came first, the debt problems or the stint on I’m a Celebrity? There’s a trend forming here. Some might argue that putting yourself up for ritual humiliation, bug-eating, creepy-crawly wearing and perpetual back-biting is itself a sure-fire sign that all is not rosy with the bank balance. However, as much as celebs hitting the self destruct button makes for great television, there is no arguing against the fact that careers can be rekindled by a gung-ho stint in the Aussie Outback. Just look at Pete and Katie. Sadly, we have also seen that these things the extent to which these things can go wrong. Just look at Pete and Katie.

The financial fallout of the show has surfaced yet again, as despite the £25,000 winnings, another of the bush-tucker alumni was facing dire financial difficulties. Ex-EastEnder Joe Swash has now joined an illustrious line up of former I’m a Celebrities in being declared bankrupt, less than a year after walking out of the Australian jungle with his winnings. He joins the once Atomic Kitten and face of frozen food, Kerry Katona and the other, other Baldwin, Stephen, in the celebrity insolvency club.

Starting with staggering £120,000 worth of unpaid tax, the news of bankruptcy proceedings against the 27 year-old became public just before he set off for the outback. Despite being able to pay off £100,000 of his outstanding debt, Her Majesty’s Revenue and Customs could wait no longer for the outstanding balance and the bankruptcy proceedings have been recently finalised, with the Official Receiver having now taken control over his assets. Could his financial circumstances have been solved by taking advantage of another potential debt solution? Did he exploit the right channels and take proper advantage of the debt help that is out there? Obviously, everyone’s circumstances are slightly different and there is no one-size-fits-all, quick fix debt solution. The insolvency application has been put down to purely tax reasons and there are no other creditors listed on his petition. It has come at a time when things looked to be improving for Swash. After the lows of being axed from Eastenders in 2006 and the resulting quite spell, the stint on I’m a Celebrity looked to have paid dividends with a run of TV appearances, including the current role opposite Pamela Anderson in Living TV’s ‘Living with my Idol.’ He had recently moved into a £400,000 flat in North London, which may not be wholly secure now that the Official Receiver is in control of his money and assets. Had he gone for an IVA, he may have had to relinquish a proportion of the equity in any property but his home would’ve been secure. However, if the property is only rented, bankruptcy might have been the right option. If you want to find out more about the different debt solutions on offer, take the free 15 second debt wizard at Harrington Brooks.

Another I’m a Celebrity icon, the onetime pop star and hawker of frozen foods Kerry Katona was declared bankrupt in 2008. This was again the result of unpaid taxes and once again, in spite of a huge effort to cut her tax bill from £417,000 to £82,000 Her Majesty’s Revenue and Customs went ahead with the insolvency petition. Katona left Atomic Kitten in 2001 but returned to the celeb spotlight in 2004 on I’m A Celebrity… Get Me Out of Here. She earns an estimated £750,000 a year from Iceland adverts and £400,000 as a columnist for OK! This is supplemented by other revenue streams, like her workout DVD and autobiography. However, unlike Swash, Katona’s bankruptcy petition did name more than the taxman. Her bouts of retail therapy have included a £1.5m luxury home in Cheshire, a £115,000 Lamborghini for hubby Mark, a £90,000 Range Rover and a £70,000 Porsche Cayenne GTS.

The Bankrupt Ex-I’m a Celebrity club extends across the pond too. Usual Suspects star Stephen Baldwin, perpetually in the shadow of big brother Alec, filed for bankruptcy revealing debts amounting to $2.3m (£1.4m). While he was appearing in the US version of I’m A Celebrity… Get Me Out of Here!, Baldwin was apparently on the receiving end of 125 insect bites and left the Costa Rican set after contracting an infection. Having obviously had his fill of bloodsuckers, Stephen decided it was time to face up to his mounting debt. He owed $1.2m (£733,000) on a double mortgage, on a property in up-state New York. Baldwin also accumulated about $70,000 (£42,766) worth of credit card debt. Now a born-again Christian, Baldwin co-hosts a radio programme with evangelist Kevin McCullough and has recently released a novel. Baldwin extended his newfound Christian charity to a homeless man who he allowed to live on his property. Sadly though, he was actually using this as a base-camp from which to sell heroin.

Perhaps the free Harrington Brooks debt wizard could offer you the debt help that you need by showing you what debt solutions are on offer which allow you to avoid bankruptcy.

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What is the right solution for Ex-Eastender Swash?

November 27th, 2009

The former Eastenders star, Joe Swash was unsuccessful in his attempt to clear a £120,000 debt to Her Majesty’s Revenue and Customs within a given time limit and as a result has been declared bankrupt. He could not keep to the repayment schedule proposed by the courts and had an outstanding debt of £20,000 by the imposed deadline. It has been claimed by Swash’s management that there are no other creditors named in the petition. However, the contributing factors responsible for the insolvency petition are not entirely clear so the suitability of filing for bankruptcy as a debt solution in these circumstances is also open for debate.

After being fired from BBC One soap Eastenders in 2006, Swash signed up for ITV’s show “I’m A Celebrity… Get me out of here!” and went on to win the competition. A period of success followed, with a few television appearances and a contract with Living TV to appear opposite Pamela Anderson. However, this rekindled fame failed to save Swash from the taxman after his apparent “oversight”. Yet, was Swash right to go for Bankruptcy as his debt solution of choice? His assets have now been seized by the Official Receiver as a result of a bankruptcy order from the High Court of Justice in London. Many individuals facing mounting debt view bankruptcy as a last resort. When facing truly unmanageable debts, there are often other debt solutions, like the Individual Voluntary Arrangement (IVA) or a Protected Trust Deed, which can be more favourable to people in financial difficulty. First of all, other debt solutions can be kept out of the press. Bankruptcy is a matter of public record and is published in your local paper. Thus, the stigma of an insolvency declaration, such as that currently surrounding Joe Swash, can be avoided.

For example, the extensive tabloid coverage of former England and Liverpool footballer John Barnes’ bankruptcy was looked upon significantly less favourably than ex-Men Behaving Badly actor Neil Morrissey’s decision to tackle his mounting debt with an Individual Voluntary Arrangement. Although the widespread employment of debt solutions and the current financial climate have resulted in far more common tales of debt woe, there is still an unhealthy stigma surrounding debt management, solutions and even a desire to seek out arrears advice and the wider subject of debt help. Essentially, taking quick action in addressing your debt is the most important thing to do. There isn’t a quick fix for mounting debt and there is no solution that will be ideal for everyone. Take the free, 15 second debt wizard at Harrington Brooks for a valuable insight into the right debt solution for your financial circumstances.

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