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It's a common occurrence to spend money on a credit card with the intention of repaying the money over a longer period of time. Some of the interest rates for credit cards can be phenomenal, with the best interest free balance transfer credit card lasting almost 2 years. It can mean that you can avoid interest fees, for a short period, for thousands of pounds and help you to repay your credit card debt.

There are various ways to cut your credit card debt. For people who don't have severe credit card debt and are able to afford to repay the debt over a 12 month, or shorter, period then the interest free offer will help repay the outstanding debt and clear the balance. As long as the interest free period is live and the balance is being reduced each month then you will be clearing your credit card debt. But, if you're only making the minimum payment to your credit card debt, then whilst the interest free period will mean the debt isn't getting larger, you won't be clearing the balance in time. This means you may have to balance transfer multiple times.

An interest free balance transfer is an introductory offer to entice you to join the credit card company. Most people contact Debt Support Trust when they can no longer balance transfer their credit commitments and need a debt solution.

If you are unable to balance transfer your credit card debts then call Debt Support Trust on 0800 085 0226.

Consolidate Credit Card Debts

You can choose to consolidate multiple credit cards into one new account. This would mean one payment each month to one company and with one rate of interest. This can sometimes be the best option to deal with debts. The problems arise when the total amount of debt is too large and it's still too difficult to repay the full amount of the debt by the end of the interest free period.

Other issues which can occur is that the new rate of interest is higher than previous amounts. This means it will be more costly to borrow the money and harder to become debt free.

Sometimes, when the debt is on different credit cards it can seem hard to manage so it's best to consolidate credit card debts. If you're balance transferring to simply "tread water" and by yourself time then seek professional debt advice to help you become debt free.

Can't Balance Transfer Credit Cards

When you can no longer balance transfer you need to get debt help. Avoiding credit cards and letting the debts mount will only increase the total debt. A debt advice charity like Debt Support Trust can help you with a range of money management tools and even help organise debt solutions to have you out your debt problem in 6 years or less.

The first step is to call Debt Support Trust on 0800 085 0226 and speak to a friendly advisor. Once we know your financial situation we can advise you which debt solution would be best for you.

When searching for help regarding debt a common belief is that bankruptcy is the only advice available. In reality, there are numerous debt solutions which can help resolve money worries. At Debt Support Trust our charity advice line offers debt help on a wide range of solutions. So, if bankruptcy is the correct solution you will be speaking directly to our bankruptcy advice line and will be offered tailored advice based on your specific financial situation.

If you would like to check whether bankruptcy is the right debt solution for you, why not try the 10 minute debt test? Or you can call our debt charity advice line specialists today on 0800 085 0226.

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Should I Go Bankrupt?

Before deciding whether you should or shouldn't go bankrupt, you must seek impartial debt advice from a registered debt charity. This ensures you're not making the wrong decision which could affect your employment, assets or credit file.

If you are struggling to meet your minimum contractual repayments to your debts then bankruptcy could be the correct option. However, there are other factors to consider when determining the right debt solution for you. For example, do you have any assets with equity, such as a house? If so, you could be asked to sell your house in bankruptcy to repay the debt. In other debt solutions you could retain your property and become debt free.

If your are in employment then you could be asked to make a contribution to your bankruptcy each month under and Income Payment Order. This arrangement lasts for 3 years, despite bankruptcy only being 1 year.

There are other pros and cons of entering bankruptcy to deal with debts. Bankruptcy may not hold the same implications for one person as it does for another. There are also two routes to enter bankruptcy so speak to our bankruptcy advice line today on 0800 085 0226 to get specific bankruptcy help.

 

Typical Bankruptcy Questions

There are often questions that people considering bankruptcy have. Some of the most common questions are:

What is the cost of Bankruptcy?

Bankruptcy costs vary depending on the route you're deciding to enter. If you are suitable for a DRO route to bankruptcy then the cost is £90. Otherwise the cost is £700 at the local court. If you're on a low income then the bankruptcy application cost at your local court could be reduced to £525.

In Scotland, the bankruptcy application cost is £200.

How do I make myself bankrupt?

You can make yourself bankrupt by going to your local court or speaking to a money advisor who can help you organise a DRO. You should give Debt Support Trust a call on 0800 085 0226 to discuss which route is best for you.

Can you help me with bankruptcy?

Yes. We can help you determine whether bankruptcy is the right debt solution, which route is suitable and even help with paperwork.

You can email us for assistance contact@debtsupporttrust.org.uk or call 0800 085 0226.

Somebody else is making me bankrupt, what can I do?

When somebody else is making you bankrupt you should seek debt advice as quickly as you can. Time is generally of the essence to help you avoid bankruptcy, if that is what you want. If somebody else is making you bankrupt then you do not have to pay the bankruptcy fees, which would save you money

The latest TV ad from controversial payday loan company Wonga has been banned by the Advertising Standards Authority.

The ban comes after the ASA received 31 complaints from from viewers claiming the ad was "misleading".

Payday loan companies have been criticised for getting people into debt through high interest repayments.

Some people argue it's far too easy for people to take out payday loans, with most not doing credit checks.

The Wonga advert claims to explain how the interest rate they have to show is almost misleading about the real cost.

The advert says,

"Right, we're going to explain the costs of a Wonga short-term loan"

"Some people think they will pay thousands of per cent of interest"

Many viewers felt this was an attempt by Wonga to "trivialise" RAPR and the real cost of taking out a payday loan

The recent complaints over the Wonga advert were due to four main points; the ASA listed these as,

  1. Most complainants challenged whether the ad was misleading, because it confused as to the interest rate applied to a Wonga loan
  2. Some challenged whether the ad was misleading, because it implied that the representative APR (RAPR) was irrelevant to a short-term loan.
  3. Some challenged whether the ad was irresponsible, because it encouraged viewers to disregard the RAPR and thereby trivialised the decision to take out a short-term loan.
  4. A few challenged whether the ad breached the Code, because the RAPR was not sufficiently prominent.

The ASA agreed the advert was not incorrect but did feel it was misleading, they said,

"Whilst we acknowledged that viewers taking out and repaying the loan within the stated time period would not repay 5853% of the loan, we were nevertheless concerned that viewers would be left without a clear understanding of how the information in the on-screen text could be applied to a Wonga loan, given the ad's assertion that the representative APR was not indicative of the cost of the loan.

Before anyone takes out a payday loan it's important they have a clear strategy on how they will repay the high interest loan.

If it's possible to borrow from friends or family this route should be taken because it will save them money and is less likely to lead to debt problems.

New research commissioned by the Sutton Trust has found that almost three quarters of students completing their studies will never repay all of the money they borrowed. Most people will be repaying their student loans well into their 40s and 50s as the vast majority fail to repay their loan. While student loans are different to regular unsecured loan debt problems, it still represents a problem for society with increasing numbers of people becoming indebted.

Student loans are used to cover living costs and tuition fees in England, Wales and Northern Ireland. The Institute for Fiscal Studies wrote the recent research and considered the knock-on impact of tuition fees increasing since 2012.

The study suggested that the average student in England would leave further education owning almost £45,000.

Student Debt: What Has Changed

The cost of tuition fees has increased and this is directly impacting the amount of money students have to pay in order to gain their qualification. The change in debt has risen because of the new fee structure rising on average from £24,754 to £44,035.

The tuition fees are the main cause of concern for students in England with fees rising from £3,000 in 2011 to £9,000 in 2012.

However, students don't have to repay the loan until they earn at least £21,000 per annum, whereas it used to be £16,910. The interest rate on the loan has increased too. The new interest rate is 3% which is lower than many unsecured loans, however if the loan isn't being repaid monthly then the debt is simply increasing.

Can Student Loans Be Written Off?

The short answer is yes, student loans can be written off. A new style student loan can't be included in a bankruptcy, IVA or Trust Deed but they could still be written off.

If you have not repaid your loan after 30 years of borrowing the money then the outstanding balance will be written off. You have to pay a percentage of your income above the threshold back to the loan once you're in employment, however outstanding amounts after 30 years will be legally written off.

The new research suggests that 73% of people will have some of their student loan written off, compared to 32% of people in the old system. The typical amount of money which could be written off is around £30,000.

If your first loan was taken out during the 2005/06 academic year in England, Wales or Northern Ireland then any outstanding loan is written off aged 65, instead of the new 30 year rule.

In Scotland, if your first student loan is pre 2005/06 then any loan remaining to be repaid is written off aged 65. From 2006/07 any debt to student loans will be written off after 35 years.

We receive enquiries into the charity from time to time requesting information and one interesting question we received was, "Can I enter a short term Trust Deed"?

A Protected Trust Deed is typically a 4 year debt solution, however for some people the debt solution can be shorter. The solution used to typically be 3 years but changed in November 2013. A short term Trust Deed is also known as an equity or lump sum Trust Deed.

The Scottish Trust Deed Solution

Some people in Scotland are suitable to enter a Protected Trust Deed to resolve troublesome debt problems. The solution allows a person to make one affordable monthly payment to their debt each month, usually for 4 years and at the end of the solution any remaining debt is written off.

In a Trust Deed assets with equity must be released, however people are able to keep hold of assets like their house and car.

The interest and charges in a Scottish Trust Deed are frozen and written off at the end of the solution.

Short Term Trust Deed Solution

A Trust Deed may not always last for 48 months, although it can last for longer too. For a lump sum Trust Deed the length of time can be as short as 6 months, although it's usually around 1 year in order to conclude and close the solution.

The short term option is a proposal where you offer one payment as a full and final settlement. If you can afford to repay 70% or more of the debt in a full and final settlement you may wish to try and do this informally first by contacting each creditor and offering them a pro-rata offer. If your lump sum is less than 70%, or you want the legal protection from your creditors, you may consider entering into a Trust Deed to resolve your debts.

Example of a lump sum Trust Deed

When a Trust Deed proposal is suitable it is drafted and offered to each of your creditors. If you are unable to make any monthly contributions towards your debt because you have no disposable income each month, then a lump sum payment could be accepted.

Usually short term Trust Deed plans where a lump sum is offered to the creditors, the money is offered from friends and family or from the sale of an asset, like a house. For example, if the property is:

Debt - £30,000

Lump sum amount - £15,000

Length of time in the Trust Deed - Under 1 year

A lump sum Trust Deed would have no reason to last for 4 years because it would only add extra charges to the case without any extra money being brought in for the creditors.

If you would like specific advice on an equity only Trust Deed then you can call Debt Support Trust on 0800 085 0226, or complete our debt test to find out if a Trust Deed would be the right debt solution.

For some debt solutions, coming into inheritance can result in people being made to offer their windfall into the debt solution.

If someone knows they are going to be coming into money it can change which debt solution is best for them and should be made clear when receiving debt advice.

Inheritance & Insolvency Solutions

An insolvency debt solution is where a person is unable to repay the full amount owed or meet their monthly contributions towards their debt on time. It's these solutions which could see people lose any inheritance which is left to them by a loved one.

In an IVA, Trust Deed or Bankruptcy solution, any inheritance, lottery win or general windfall must be provided for the benefit of the creditors. This means you could repay all of the debt and any fees or charges.

Bankuptcy/Sequestration

Both the English and Scottish version of bankruptcy will affect a debtor the same way in regards to inheritance.

When someone enters bankruptcy or sequestration any disposable income or available equity must be made available throughout the term of the solution. So, if somebody enters the solution and comes into money during the term of the solution, they would likely be asked to provide this towards the bankruptcy specialist.

While the debt solution will last for 1 year in bankruptcy, any available money received within that period must go towards repaying the debt.

IVA/Protected Trust Deed

When entering either an IVA or a protected trust deed a person in debt is agreeing to repaying what they can afford over a fixed period of time. This means the payments can change during the debt solution term.

A trustee will be appointed to monitor the finances, negotiate with creditors and essentially take control of their assets.

It would be the job of the insolvency specialist to make sure the creditors got back the money they were due and anything extra, if that was possible.

Anyone coming into inheritance while in an IVA or protected trust deed will need to pay it towards the debt along with the fees for the debt solution.

The festive season is often a time to celebrate with friends and family, but it's also an expensive period which can lead to long term debt problems.

At Debt Support Trust we help people with a wide range of debt and money problems. These money problems can be anything from problems paying their rent, through to the most severe financial predicaments.

The Christmas period is often a time for celebration, but come January it can be a depressing and frightening experience being in debt. If you're already in debt and want to wait until Christmas has passed before dealing with your debt, then Debt Support Trust can help you too.

Avoiding Debt Problems

The desire to meet Christmas expectations means people can become indebted over the Christmas period. We notice an increase in the number of people using payday loans to buy Christmas presents, however they don't know how they will repay the loan in January.

When the payday lender - or any other company lending money - doesn't receive their money back on time then they will continue to contact you until they get their money. It can also impact on your credit file.

Our top 3 tips to help you have a great Christmas financially are:

1. Budget: Set a budget of what you can afford. The budget should include extra Christmas nights-out and presents too. This way you'll know exactly how much money you have available to spend.

2. Buy in advance (if possible): When you leave shopping until the last minute you may know what you want to get your loved ones, but the cheapest shops may have sold out. Buying in advance means you can get the cheapest prices.

3. Shop around: You should shop around for the best price. The high street is in competition with the internet and often the price will vary. Look around and check if you're really getting the best price.

The most important tip is not to spend what you can't afford to easily repay. The majority of people in the UK use credit, but it's whether that credit is affordable that really matters.

Call for Debt Advice

If you're unsure how you will afford to repay your Christmas spending, or think that you may have debt problems early in the New Year, then speak to a Debt Support Trust advisor.

You can phone Monday to Friday 8am - 7pm on 0800 085 0226. Alternatively, you can complete a debt test questionnaire and get some online debt help.

New changes to the way Scottish Trust Deeds are administered have been introduced for people with debt problems. For people thinking of entering a Trust Deed in Scotland, there's good and bad news.

The role of the AiB in Scottish Trust Deeds

The Accountant in Bankruptcy is a supervisory body which monitors the Trust Deeds registered in Scotland. The Accountant in Bankruptcy has been working to change how Protected Trust Deeds are administered.

The changes have meant the length of time a Trust Deed lasts is often extended. Who can enter a Trust Deed and how much unsecured debt is outstanding has changed too.

So, what are the Trust Deed changes?

We mentioned in September about the impending changes to Trust Deeds but there have also been some extra surprises.

We expected that Trust Deeds would move from a 3 year to a 4 year debt solution. This excludes people who are entering an equity only or lump sum Trust Deed. Protected Trust Deeds will now be assessed on the Common Financial Statement too.

The AiB will have more powers to reject Protected Trust Deeds which are not in the best interests of the person in debt. A 4 year Trust Deed, when a 4 year debt arrangement scheme would be more suitable, for example, would mean the trust deed would be rejected by the AiB, even if the creditors said yes.

Similarly, a person who is suitable for a LILA Bankruptcy will not be allowed to enter a Trust Deed, even if they would prefer this route. A LILA should mean a person cannot afford to repay anything towards their debt, so a Trust Deed should not be appropriate.

Trust Deeds in Scotland are advertised in the Edinburgh Gazette, however the changes mean there is no need to advertise the Trust Deed any longer. Instead, a person entering the Scottish debt solution will automatically be listed in the Register of Insolvencies (ROI).

The fees for the Insolvency Practitioners will change too. An Insolvency Practitioner will have to work on a nominee fee and then a supervisory fee. The supervisory fee will mean they will receive a percentage of what's recouped, instead of a flat fee. This should mean the creditors get more of the money back.

I'm in a Scottish Trust Deed, what will happen?

If you're already in a Trust Deed you don't have to worry about the recent changes, as it's only impacting people moving forward.

Anybody entering a Trust Deed from today onwards will be in the solution for 4 years, instead of 3. However, it's not all bad news as people can enter a Trust Deed if they have £5,000 of unsecured debt or more, instead of the typical £10,000.

The changes to Scottish Trust Deeds is an interesting development and certain to allow increasing numbers to enter a solution to resolve debt problems. There are also other debt solutions for people in debt, such as a debt arrangement scheme or sequestration.

We help people in debt across the whole of the UK with telephone and internet based support. For debt help from Debt Support Trust please call 0800 085 0226.

When debt problems occur people we help don't want pity or sympathy, they want advice, guidance and above all else, a debt solution which will help get debts resolved.

To resolve debt worries we start by introducing our debt advisors. Our debt advice team listen to financial problems so they can provide debt solutions which can help you become free of debt. Everybody we help with debt problems receives tailored debt support.

How to Become Debt Free

There are various routes to become debt free. There is always a way out of debt problems, but the best route depends on your personal and financial decisions.

Some debt solutions can help you become debt free within 1 year, while others can take 10 years, or more. The route to become debt free, which will be best for you, will depend on your financial situation. Your income and expenditure will inevitably determine how much disposable income you can afford to repay towards your debt each month.

Borrowing money and repaying that money can be easy at first, but if change happens, such as loss of employment or an over reliance on credit, then it can be impossible to repay the debt on time. When you speak to Debt Support Trust, we don't focus solely on what you have to contractually pay but instead what you can afford to repay.

Once we understand what you can afford to repay every month and how much unsecured debt you have we discuss your assets. Your assets can include a house, car, money in your bank, stocks, shares or bonds, as well as other assets with value. We consider whether there is equity in any of your assets. Equity is the difference between the value of your asset (e.g. your house) and what's outstanding (e.g. the mortgage). Depending on your debt solution, your property may not need to be included. Your debt advisor at Debt Support Trust will be able to explain what will happen with your debt solution.

Get Debts Resolved

The first step to resolve debt problems is to seek professional debt advice. You can speak to Debt Support Trust on 0800 085 0226. Our charity debt advisors will help you resolve your debt problems and regain control of your finances. We caringly listen to your problems and offer practical advice. You can decide whether you wish to proceed with our advice, or not.

To get debt help from Debt Support Trust, please telephone our advice line on 0800 085 0226.

In the last year there have been 10,000 homes repossessed in the Greater Manchester area. This is a direct result of debt problems in Manchester people struggle with.

There are debt solutions which can help people in debt keep their house and resolve debt, like credit cards and overdrafts.

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Repossessed Homes in Manchester

Repossessions occur when the mortgage repayments are not met on time. A secured debt, like a house is a priority expenditure and should be paid before unsecured debts like a credit card or overdraft.

The Council of Mortgage Lenders statistics reveal 7,700 properties were repossessed in the 2nd quarter of 2013 and that over 157,000 mortgages are in arrears too.

Repossessing a house is usually the last stage for a mortgage lender. The mortgage provider will often refer you to a charity to get debt help first, as long as they are aware of your financial problems.

If your property is repossessed and then sold, the mortgage will be repaid first, then the fees for repossession. If there is any money left you will be given this back. Should your property be in negative equity then any shortfall on the property will be passed onto you as an unsecured debt.

Contact Debt Support Trust if you would like debt help from a registered debt advice charity.

Manchester Bedroom Tax Debts

In Manchester, the bedroom tax is also impacting on people's ability to live in rented accommodation too. The under occupancy tax on social housing means people are receive 14% less housing benefit for 1 extra room and 25% less for 2 extra bedrooms.

The shortfall in housing benefit for people claiming the state support means arrears are rising. Housing associations and social landlords are being forced to take action, including eviction.

The bedroom tax means debts continue to rise for people who can't move property and don't have the available income to pay the shortfall.

Property Debt Advice

Whether you live in a rented or mortgaged property, Debt Support Trust can help. We'll assess your financial situation to understand what you can afford and provide a range of advice, tips and debt solutions.

You can receive support by telephoning 0800 085 0226 or completing our debt analyser below and asking for a call back.

Debt Test