Drop in Forecast Reposessions

November 19th, 2009

At one stage, the Council of Mortgage Lenders anticipated that there would be 75,000 repossessions in the UK during 2009. Then the forecast was reined in by 10,000 repossessions by June of this year, to 65,000. Of course, while still no fairytale, this was taken as a very positive sign for those facing spiralling debt in the UK. Perhaps this was due to increased restraint on the part of borrowers, more responsible lending or the government’s economic measures, like maintaining the low rate of interest. However, the estimated number of repossessions has been revised once again and the latest release has set the figure some 35% lower than was originally thought, at 48,000. The message here is that, despite the perpetually bleak picture of the economic climate, the number of mortgages in arrears has fallen and with it, the number of people facing repossession in Britain.

We have also seen the recent expansion of the Income Support for Mortgage Interest scheme. This is a government initiative that simply means that homeowners have less waiting time between losing their jobs and receiving financial aid in servicing the interest on their mortgage payments. The wait has been cut from 39 weeks to 13 weeks and there is no doubt that it is a valuable asset to homeowners facing debt problems. As is the Homeowner Mortgage Support Scheme, which allows households that suffer an unexpected drop in income to defer a portion of their mortgage payment for a period of up to two years.

The earlier that you confront your debt problems and approach your creditors, whether this is your mortgage lender or other creditor, the greater your chances are of saving your home. You have to remember that the primary objective of your lender is to collect your repayments and this is not possible if you’re bankrupt. As a homeowner, you should also be striving to avoid bankruptcy as it is highly likely you will lose your home. One of the primary attractions of an Individual Voluntary Arrangement over a declaration of bankruptcy is the inherent risk of losing your home. An IVA will allow you to keep your house but it may require you to relinquish some portion of the equity that you have in it, in order to service your debt.

No matter what, you must contact your mortgage lender immediately should circumstances arise in which you will struggle to uphold your repayment schedule. There is a strong chance that you will receive a more lenient approach from your lender. Seek out professional financial assistance and debt advice too. All financial circumstances are different and there is no quick fix to you debt problems. Don’t hesitate in getting debt help. Take the 15 second debt wizard at Harrington Brooks for a personalised advice about our debt solutions.

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Debt Worries Affect Performance

November 18th, 2009

A major insurer has released figures claiming that, in the last year, somewhere in the region of 5 per cent of the UK population have had to take time off their work due to stress as a direct result of their debt problems. Even more worrying, a huge 70 per cent of people freely admit they spend a substantial proportion of their time at work, mulling over their personal finances and struggling with potential debt solutions. Obviously, a lot of these people felt that this was having a noticeable effect on their performance at work, with some even admitting to spending in excess of four on-the-clock hours wrapped up in their debt pressures.

Even though meeting their monthly debt repayments and still having enough money left over to pay the regular bills was at the forefront of their financial concerns, more than a third of those approached for comment admitted to devoting work time to worrying about the state of the global economy. However, even with all of this worrying and the ever mounting levels of stress they were under, more than half of those questioned were quite open about the fact that they spent absolutely no time on the management of their own finances each month.

This is symptomatic of the approach to debt taken by a lot of individuals in the UK and is consistently seen to exacerbate their debt problems. Rather than just worry about it, do something! The sooner you face up to debt, the sooner you can seek advice about the best debt solution for you and take real action, the better your situation will be and the easier it will be to clear yourself of bad debt.

Bankruptcies are a last resort for all concerned. Your creditors reclaim a fraction of what you owe them and you risk your home and other assets, not to mention the stigma surrounding insolvency and its impact on your credit rating. Act early and you will be able to take advantage of alternative debt solutions like a debt management plan or an Individual Voluntary Arrangement.

For more information on these potential routes out of debt or for free advice on the right course of action for you personally, take the 15 second debt wizard at Harrington Brooks.

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5000 A Year, Just To Keep Up

November 16th, 2009

A recent survey suggests that it is going to cost the average British household a whopping £5,000 over the next year, just to maintain their current level of debt and not slide any closer to insolvency. So, this is simply the level of expenditure that we are facing in order to meet the interest added to our debt repayments. It doesn’t even begin to pay off the initial debt itself. Obviously, this is on top of the regular bills and expenditures that every household faces and, as we all know, there is always going to be a host of hidden outgoings that are almost impossible to plan for.

As we head into the festive season and everyone gets into the Christmas spirit, the odds are that we’ll all look for a bit more credit. After all, it is the season of goodwill and how better to show that than by spending money. As a result, economic predictions point towards an increase in the cost of borrowing. In order to service this desire to lavish gifts on friends and loved ones, consumers are expected to increase their debt by borrowing more money, at a greater rate of interest. This increased rate of interest is due to a limited supply of finance which is in turn imposed by tighter funding constraints for lenders. So, in accordance with the simple economics of supply and demand, credit will get more expensive.

Be sure to pay close attention to the small print associated with any credit agreement. Too often, people are sucked in by introductory rates that are simply too good to be true. Well, too good to last anyway. This can have a crippling effect on your finances and push you into debt. Even though it’s tempting to over extend at this time of year, as we’re bombarded with adverts and other temptations to spend, it’s important to stay debt savvy. You don’t want to start the New Year with the threat of impending bankruptcy.

This news comes in the wake of a record number of declared insolvencies. The most recent figures show that bankruptcies in England and Wales for the third quarter of 2009 reached 35,242 people. That’s an increase of almost 30% on the same period of last year. It is a sobering fact that currently, a staggering 11,000 people are being declared bankrupt in the United Kingdom each month. This is a number that’s set to go even higher in the wake of our Christmas spending. If you’re unsure as to the best course of action to tackle your specific debt problems, particularly before the festive spending kicks in, use the 15 second debt wizard at Harrington Brooks. They’ll be able to show you a debt solution to suit your circumstances and hopefully help you to avoid bankruptcy.

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Glossing Over Your Debt Dilemma?

November 6th, 2009

One of the more subtle signs of potential economic recovery is the increased sales of emulsion paint. This is a useful economic indicator as it highlights the present state of the DIY market, which in turn gives us an insight into the state of Britain’s housing market.

On one hand, if you are facing debt problems then DIY can be a great option in making the most of your home. The old ‘make do and mend’ mindset comes to the fore in times of financial difficulty. However, for those of us with more severe debt management issues, like those facing the threat of impending bankruptcy, then selling your home before repossession can help you pay off debt and hopefully, free up some equity for you too.

The tendency to buy a few tins of emulsion paint to do up the house is a common one. This is understandable as there really aren’t any more cost effective ways of sprucing up and revitalising your home; whether you are intending to sell or not. At the same time though, it can be viewed as a bit of a frivolous expense. If the housing market is in a slump, fewer people are looking to buy, so fewer people are selling. This means that the traditional DIY boom time that follows a fruitful season of house sales has not materialised over the last couple of years.

Sales figures for tins of emulsion have been consistently falling for a while now. From the period between the beginning of 2008 and spring of 2009, for all but two months the amount of paint sold was significantly down on the same period of the year before. However, as of April 2009, we’ve seen much improved sales figures. Between April and June of this year, sales were up by over 16% compared to the same three month spell in 2008.

Essentially, this points to an increased number of people who are willing to invest in their homes. Albeit, in an affordable and relatively superficial manner. This may not necessarily mean that we are about to see a sudden revitalisation in the UK the housing market but it has should be noted that property asking prices in London have broken through the record high set in November 2007. Research has shown that the average asking price for property in London rose by 6.5% in September and October of this year, reaching a high of £461,157. The previous record was £412,731 set in November of 2007.

The improvement in sales has not been noticed across the entire DIY market though. In fact, some areas are still in decline. Bigger ticket purchases, like power tools, which tend to be linked to bigger DIY projects, have not fared so well. So, although we may not be out of the debt woods yet, we can see definite evidence of at least partial recovery. It’s all a matter of confidence. If you’re debt help, it makes sense to make small adjustments to your quality of life and carefully manage your budget. If you want to give your home a new lease of life because you’ve decided to stay put, or because you want to try to sell up, buying paint is a relatively cheap, cost effective method of home improvement.

If you’re facing debt problems and would like some advice in how to solve them, or just some pointers about how you can better manage your finances, get free and confidential debt help from a specialist debt advisor like Harrington Brooks, one of the longest established financial practices in the UK (0800 048 1764).

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Does a drop in bankruptcy numbers signal the end of recession?

November 5th, 2009

A drop off in the number of Scottish businesses and individuals that went bankrupt in the last quarter has triggered a swell in financial optimism and the first few rays of hope that the ill effects of the cold economic climate may be behind us. However, does this drop in the number of bankruptcies mean that the recession is easing? Is it a sign that there are fewer people facing severe debt problems or does it instead point to a greater awareness of the amount of debt help that is on offer to people in difficulty?

Well, in the third quarter of 2009 there were 5,767 personal insolvencies in Scotland. That was the figure released by the Scottish Government’s Accountant in Bankruptcy, which was down by 8 per cent on the previous quarter and down by 4 per cent on the same quarter of the previous year. 3,504 of these 5,767 personal insolvencies were sequestrations, the Scottish version of bankruptcy. That’s a drop of 6 per cent from the previous quarter. The other 2,263 were Protected Trust Deeds, which is 12 per cent down on the previous quarter. Essentially, the release of the current quarter’s figures will give us a much better understanding of the present trend but the initial outlook is encouraging.

A drop in the number of bankruptcies could be due to the fact that fewer of those people facing bankruptcies are applying to the Low Income, Low Asset scheme that was introduced in the spring of 2008. This is essentially a route into bankruptcy for those in need of debt help, whose debt level isn’t particularly high but cannot be serviced by their low income and low assets. Until this system was introduced, these people had very little access to assistance with their debt problem. A low income is basically a gross weekly income of no more than the minimum wage for a forty hour week, the equivalent to £229.20. Low assets means that you don’t have any asset worth over £1,000 and the total value of your assets is under £10,000. Therefore, you can’t own or share ownership of a house.

If you are facing financial problems and are in need of debt help, talk to a specialist debt advisor at Harrington Brooks, one of the longest established financial practices in the UK (0800 048 1764). They’ll be able to offer you a personal debt solution to suit your present financial circumstances. This will hopefully help you to avoid bankruptcy or sequestration unless it is absolutely necessary.

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