January 14th, 2010
The curse of I’m a Celebrity… Get Me Out of Here! claimed another poor victim as the former Radio One DJ Mike Read was declared bankrupt. He’s in illustrious company, joining former winners Kerry Katona, the ex-Atomic Kitten and queen of the freezer section, and ex-Eastender Joe Swash. Admittedly, Read didn’t reach the same heights in the competition as the other two. His case is more comparable with a contestant on I’m a Celebrity US, Stephen Baldwin. This points to a bit of a trend, being that a stint on the ITV “reality” television programme goes hand in hand with financial strife.
Mike Read, the onetime Top of the Pops presenter, has been declared bankrupt twice previously. The first time was in 2008, which was later annulled when he settled his outstanding debt with Horsham Council in West Sussex. The second time was in February this year when an insolvency petition was served for unpaid taxes. So, for the third time, an Insolvency Practitioner has taken charge of Read’s assets. Financial woes are nothing new for the former Radio One DJ, who regularly drew listening audiences of 17million in the 1980s. Having left the BBC in 1991, Read went on to pen Oscar, a musical based on the life of Oscar Wilde. This debuted in the West End in 2004 but was universally panned, closing after opening night at a personal cost of £80,000.
The latest cost to Read looks to be his prized record collection, 120,000 vinyl records with an estimated value of £1million. Many record collectors have deemed the vast collection of LPs to be too important to break up and the auctioneer’s guide price of three quarters of a million pounds is thought to be a highly conservative estimate of the collection’s worth. The Insolvency Practitioner is tasked with selling off your assets if you are petitioned with bankruptcy, regardless of your celebrity status. For most of us though, this would mean selling our home to service our debt, not our record collection. Insolvency is indiscriminate though. Celebrity debt may be big news but bankruptcy is a matter of public record anyway. If you are declared bankrupt, it’ll be published in your local paper; if a celebrity is declared bankrupt, it’s national news.
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December 7th, 2009
There have been a few stories in the media recently, telling of borrowers that have fallen victim to the unsavoury practices of some lenders. The most recent of these stories regards a mortgage lender who has been fined almost £3m by the Financial Services Authority for maltreatment of customers who had fallen into arrears with their loan repayment. Not only this, the same lending organisation has been ordered to repay almost £8m, plus interest, to 46,000 of its borrowers. The Financial Services Authority, the organization charged with monitoring and regulating the lending market, found that the lender was too quick to press for repossession of their borrowers assets. They also felt that the charges levied against borrowers who had fallen into arrears with repayments were inordinately high.
The vulnerable position of borrowers who find themselves unable to meet repayments leaves them open to a degree of exploitation from their lender. This position of power on the lender’s part can result in the pressing of disproportionate fees and charges. Essentially, the moral of the story should be that you do not enter into a contract which hinges on a repayment schedule that you cannot service. Of course, people’s circumstances can change though, particularly in the current, unpredictable financial environment. Never assume that findings of this nature will come to your rescue in adverse circumstances. As soon as you find yourself in financial difficulty, you must talk to your creditors and get some advice from a specialist debt advisor.
It is important that you fully investigate the company that you intend to borrow from. Make sure that you read all of the small print; don’t be sucked in by those advertised introductory rates. A quick search of the internet can provide some excellent word-of–mouth insights into a company’s customer service history. In this case, the Financial Services Authority examined the firm’s lending practices between 2004 and 2008. The investigation discovered that the additional charges for dealing with people in arrears were deemed to be excessive. Also, they found that in many cases, repossession proceedings had begun before other alternatives had been considered. Part of this may have been down to the staff that, it was discovered, had not had adequate training in management of arrears cases and the proper procedure for repossessions.
Although the case was investigated and refunds were made, it must again be underlined that this is not an easy way out of your debts. Indeed, there will be many other cases where this does not happen. Even in this case, we have to wonder why so much time is taken up with the enforcement process. The Financial Services Authority did know about these problems by mid 2008 but the case has only been recently settled. This is the largest fine so far levied by the Financial Services Authority against a mortgage lender and they are determined that it be taken as a statement of intent against mortgage lenders and third party administrators that are not acting in the best interests of their customers.
The Financial Services Authority revealed that they had received 1,510,000 complaints from the public between January and the end of June 2009 about the actions of some financial services firms. So the message is clear: make sure that you do your research, don’t be suckered in with introductory rates that seem too good to be true and select a lender that has an impeccable service record and a longstanding reputation. Talk to a specialist debt advisor at Harrington Brooks, which is one of the longest established financial practices in the UK. Go online to use their free debt wizard or give them a call on 0800 048 1764.
Financial Services Authority: www.fsa.gov.uk Harrington Brooks: www.harringtonbrooks.co.uk
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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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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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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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