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UK Bankruptcy Changes: Who Will Benefit

New bankruptcy rules are coming into effect from next month which should make it easier for people to enter the debt solution.

The changes to bankruptcy have been introduced to help people on low/no income and with limited assets to declare themselves insolvent.

Bankruptcy Rule Changes

Creditor Petition: Creditors are currently able to apply to the courts to have a person declared bankrupt if they owe a minimum of £750 but that will rise to £5,000.

Debt Relief Order (DRO): A DRO is considered a cheaper route into bankruptcy because it costs £90 to apply for, instead of paying the £705 for government and court administration fees.

The maximum debt allowed to enter a DRO is £15,000 and £300 in assets, but from next month people will be able to apply for a DRO if they owe up to £20,000 and have £1000 in assets.

Who's Most Suitable For Bankruptcy

While anyone can apply to be declared bankrupt through their local country court, it's not always the best debt solution everyone.

It's important to get debt advice before entering any debt solution, especially one as serious as bankruptcy because of the consequences associated with it.

If someone enters bankruptcy with assets they may lose them to recoup money for creditors and if someone is in employment an income payment order may be applied.

Standard Bankruptcy:

The changes will affect who is applicable for bankruptcy and which route into the debt solution is most suitable for them.

Anyone who is unemployed, has debts above £20,000 and who doesn't have sufficient assets which could be realised to pay the debt.


If someone has debts less than £20,000 and assets worth less than £1,000, they may be suitable for a debt relief order. Although it's worth noting if they were working and have a disposable income, they might be better suited to entering an IVA.

Considering Bankruptcy?

If you're considering entering bankruptcy it's crucial to get debt advice before starting the process because you may risk losing income, assets and more.

You can get debt advice from Debt Support Trust on 0800 085 0226.

Tuesday, September 29, 2015
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Debt Management Company Has Closed

What should you do when your debt management company goes out of business and closes? There has been some debt management providers who no longer provide the service and as such have informed their clients to seek debt advice from a registered charity.

At Debt Support Trust, we've experienced an increase in the number of people contacting our advisors seeking debt help after their debt management company closed. We help people across the whole of the UK. As a registered not for profit charity, Debt Support Trust can help you with debt advice and to enter a suitable debt repayment plan.

We're always happy to help people with debt advice through our registered charity. You can seek debt advice on 0800 085 0226.

Help with Free Debt Management Support

If you've been informed your debt management company is no longer helping people in debt it's vital to get advice.

Your creditors will be informed that your debt management plan has been cancelled and will begin to contact you again. You are able to enter another debt management plan, or your situation may have changed and you could be suitable for another solution.

There are a number of different debt routes to resolve debts and you're not alone.

What Should I Do?

When you're ready, take a positive step and seek advice and support. You can call Debt Support Trust on 0800 085 0226 and speak to a debt advisor between 8am and 7pm Monday to Friday.

You can also take our debt test application and receive online debt help.


After you complete your debt test you will be provided with options to resolve your debts.

If you've lost money because of a debt management company closing and are looking for compensation you should contact the FCA. They will be able to put you in touch with the administrator managing the closure of the firm.

What Will Debt Support Trust Do to Help?

When you contact us for debt help we will listen to your personal and financial situation. Based on your information we will then discuss every applicable debt solution, along with the pros and cons of each option.

As a registered charity we won't send you a bill for our advice, but you'll receive the help and support to get back on track and become debt free.

You can start by completing our debt test, or by calling 0800 085 0226.


Monday, September 21, 2015
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Mortgage Debt: Repaying Interest Only Mortgage

Almost 1 million people face losing their home when their interest only mortgage term finishes, according to new figures from Citizens Advice.

An interest only mortgage allows a home buyer to pay only the interest accrude each month but doesn't include the capital. If someone doesn't repay the capital by the time the mortgage term ends they will still be liable to repay the full amount owed.

While an interest only mortgage can be cheaper than a capital repayment agreement, it can also be dangerous if the loan isn't repaid at the end of the term.

It's expected by 2017 a large number of home owners will be unable to repay their mortgage, as endowment mortgages from 1990's end their term. In 2027 the interest only mortgages which were taken out in the early 2000's will reach their term, leaving many people with a large mortgage debt.

Citizens Advice are calling for mortgage lenders to do more to help borrowers who are at risk of being left with a large mortgage debt. The charity want lenders to call customers, send letters and set arrangements to have the capital repaid before the term ends.

An FCA spokesman said:

"We expect firms dealing with interest-only borrowers to discuss repayment strategies and propose solutions where there are no plans in place."

Dealing with Mortgage Debt

There are a number of options available to people who are facing mortgage debt problems and the quicker they act, the easier it will be to deal with.

  • Re-Mortgage: If someone is unable to repay the mortgage capital prior to the term ending they may have to re-mortgage. Taking a new mortgage will extend the current term and may the month repayments more manageable.
  • Set Arrangement: If a re-mortgage isn't possible, however a borrower still has enough time to repay the capital, they could set an arrangement to begin to have it repaid before the mortgage term ends.
  • Sell Property: So long as there is equity in the property a borrower may wish to sell the property and repay the mortgage. The problem the majority of people have found since the recession has been the drop in property prices since they signed their mortgage.
  • Debt Solution: If all the above options aren't possible someone may have to consider entering a debt solution. The property would need to be repossessed or sold before any outstanding mortgage arrears or debts could be included.

Get Mortgage Debt Advice

If you are worried about repaying your mortgage by the end of it's term, contact Debt Support Trust on 0800 085 0885.

We will assess your full level of debt and while we can't include a secured debt into a debt solution, we can advise on the best method to deal with it.

Monday, September 07, 2015
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1 in 4 Students Have Payday Loan Debt

Students are using payday loans to cover the cost of living and tuition fees which is leading them into debt, according to a new survey.

Student lender Future Finance surveyed 1,000 students on their financial habits and found 25% owed an average of £342 to payday loans.

More worrying was 54.5% admitted to incurring late charges due to missed payments and due to high interest rates these are often expensive.

Our experience at Debt Support Trust shows once someone incurs their first last charge they are far more likely to incur another. This is generally the point where the loan becomes a spiralling debt problem which is hard to recover from.

Payday loans were just one source of credit for students, with 24% saying they were gambling and 13% taking part in paid clinical trials. 58% were getting financial support from their mum and dad.

Although 64% of the students said they worked part-time, a sixth said they also felt it was affecting their eduction.

Help for Students with Payday Loans

While the cost of living continues to rise the temptation for students to take out payday loans will likely increase but help is available.

  • Budget: Before taking a payday loan students could find extra money by creating a budget. We know it sounds simple but just writing down a list of income and expenditure can help find methods to save money.
  • Low Interest Credit: If a someone does require additional credit, maybe for a short period, searching for a low interest rate credit facility could make it easier to repay and reduce the risk of it becoming a debt.
  • Debt Solution: When a payday loan becomes difficult to repay students may need to consider a debt solution to help deal with it.

Get Debt Advice

If you require further help or advice on dealing with a payday loan debt you can contact Debt Support Trust on 0800 085 0226.

Whether the loan has become unmanageable or you're just considering taking out a loan, we can help advise how best to deal with your financial problem.

Wednesday, August 26, 2015
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Dangers of Guarantor Loans

Guarantor loans differ from standards loans because the lenders will demand a second person assures the credit will be repaid.

Although one person may apply and use the credit facility, another must sign an agreement they will be responsible for repaying it if their friend of family member defaults.

Often companies will offer guarantor loans to people with poor credit ratings, CCJ's and on a low income, similar to payday loan companies.

The APR is usually lower on a guarantor loan than a payday loan, however they are still a lot higher than credit from high street banks.

People who are guaranteeing the loans aren't always aware of exactly what they are agreeing to and how it could affect them.

Citizens Advice have previously warned guarantor loans could be more dangerous than a payday loan, CEO of the charity, Gillian Guy said,

"Guarantor loans carry with them huge risks, and our evidence shows people are getting involved without being fully aware of the dangers."

A report by CAB highlighted guarantors as being at greater risk because they weren't viewed as customers and therefore as protected by FCA regulations.

Why Guarantor Loans Can Be Dangerous

Although the interest rate may be lower on a guarantor loan compared to credit from payday lenders, there are other factors people should consider.

  • Relationships: Whether it's a friend or family member who is guaranteeing the loan, the relationship could be tested if the borrower fails to repay the credit. When someone fails to meet their contractual monthly agreement, the lender may contact the guarantor to make the payment. If they fail to make the payment they could have a default added to their credit rating.
  • Debt Solution: Entering certain debt solutions such as an IVA, Protected Trust Deed or Bankruptcy could be difficult because the lender will likely still demand payment from the guarantor. The borrower and guarantor would both have to enter the debt solutions otherwise a separate arrangement would need to be made from other creditors.

Advice on Guarantor Loans

If you are considering taking a guarantor loan or you're  already struggling to repay a loan, please contact Debt Support Trust on 0800 085 0226.

We can offer advice and support on how to deal with the an outstanding loan or the risks involved should you decide to go ahead.

Monday, August 24, 2015
Debt Support Trust
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20% Still Repaying Christmas Debt

Christmas debt is still being repaid by 20% of shoppers, almost 8 months after the festive season ended, according to a new survey by GetPaidTo.

Out of the 2,000 people who took part in the survey, 82% of people who spent more than they earned, said they were struggling to repay their debt.

Consumers in the 25-34 year old age category were the biggest spenders with two fifths spending more than they earned.

This year doesn't appear to be starting any better either, with only 9% putting money into savings from January for Christmas 2015.

Our Christmas Debt Survey

Last year a Debt Support Trust survey found almost half of those people surveyed (42%) said they felt pressured to overspend at Christmas. While 15% of borrowers said they thought they would still be paying off Christmas debt a year later.

We found only 14% had saved money to pay for Christmas, while 61% were going to use money in their current account.

This latest survey appears to confirm our own findings from December of last year when 17% of people said they would borrow money with the intention of repaying it.

The GetPaidTo report found one in five people paid for Christmas using a credit card, while one in ten used their overdrafts to buy gifts.

Dealing with Christmas Debt

There are a number of ways people can deal with Christmas debt but it's important to do it before the festive season starts again.

Saving money for Christmas may seem extremely difficult, however with the average person telling us they would spend £433, saving £36.08 per month would cover the cost.

Finding deals early in the year when presents are discounted in the January sales can help reduce the overall cost of Christmas too.

If you already have Christmas debt you are struggling to repay please contact Debt Support Trust today and we can advise on the best debt solution for your circumstances.

You can contact us on 0800 085 0226 or take our online debt test.

Monday, August 17, 2015
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Dundee Council Now Using Debt Collectors

Dundee City Council have begun employing debt collectors to recover council tax arrears from more than 5,000 of residents.

It's common for councils across the UK to use debt collectors but national tax payers watchdog, TaxPayers' Alliance, believe Dundontians are paying too much.

A Dundee City Council spokeswomen said,

"I can confirm that debt collectors are handling more than 5,000 cases for us.

"We try to encourage as many people as possible to pay by making it easy for them to do so, for example by direct debit or by paying online.

Research by the Evening Telegraph found the average council tax arrears in Dundee is £436.88, with 5,323 households being pursued.

A Taxpayers Alliance spokesman said Dundee City Council could do more to help people:

"Everybody must pay what they owe, but Dundee City Council must do everything it can to make it easier for people to pay.

"That means being flexible about how people pay, being responsive to the needs of certain groups who may not be able to use the internet and, above all, by cutting council tax so that ratepayers can more easily afford to pay."

Dealing with Council Tax Debt Collectors

We speak to people throughout the UK on a daily basis who have problems dealing with their council and/or debt collectors they employ.

One complaint a lot of our clients have with their council is the lack of time given to resolve their arrears before being passed to a debt collection company.

The people we advise are often scared by the thought of debt collectors entering their property and taking their belongings.

There are some important things people should do we dealing with council tax arrears and debt collectors:

  • Negotiate: The first step should be to try and negotiate with the council before it gets to the debt collection stage. If the council tax arrears are passed to a debt collection agency then speak to them quickly and try to set an arrangement.
  • Entering Property: If a debt collector does visit your property never open the door or give permission for them the enter. You can speak to them through the door but many collectors won't accept this.
  • Never Ignore the Debt: Debt collectors can charge expensive fees and charges so ignoring the debt will make it harder to repay. if you are scared to speak to the debt collectors contact Debt Support Trust on 0800 085 0226.
Thursday, August 06, 2015
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5 Solutions to Debt - Take the Debt Test

Are you tired of worrying about debts? Well, that's what we regularly hear at Debt Support Trust, a registered money advice charity. That's why we help people get back out of debt, as quickly as possible.

All debt solutions need to be affordable, so that depends on how much money you have available each month after you pay your regular monthly bills. The right debt solution will also be determined from your level of unsecured debt.

Take between 5 - 10 minutes and take the debt test below. It'll give you, in confidence, an answer on how you could resolve your credit card and other debts.



You can also call Debt Support Trust on 0800 085 0226 for debt advice from a not for profit charity.

5 Popular Debt Solutions

yay-10142136There are solutions to debt problems and you don't have to be in debt forever. Many people get into debt accidentally, in fact, the most common reasons for debt are because of unemployment/ reduced income, divorce or separation or a change in personal circumstances leading to a money problem.

There are ways these problematic debts can be rectified. These include:

1.Token payments: If you are unemployed or have a low income you could consider making token payments to your debt. This is where you pay one low monthly amount to each creditor, until your situation improves.

2. Debt management plan / Debt arrangement scheme: Depending on your location, you could be suitable for either one of these solutions. You pay one monthly amount to your debt each month and it's managed by another party, so you don't have to deal with your creditors.

3. IVA: A formal debt solution in England, Wales and Northern Ireland. You pay one affordable payment, often for 5 years and at the end any interest or charges is cleared and you're debt free.

4. Trust Deed: A Scottish formal debt plan to repay what you can afford, typically for 4 years. You pay what you can afford and at the end your remaining debt is cleared.

5. Bankruptcy: A solution which can be entered via a number of routes to resolve debts you can't afford to repay.

The First Step

In taking positive action to resolve any debt problem you must first admit the problem exists. A quick checklist to determine if a problem exists is:

1. Do you struggle to make your payments to your credit cards and other debts every month?

2. Do you often have no money left at the end of the month because you have paid your debts?

3. Are you sometimes late in making your payments to your debt or have you received correspondence from the companies you owe money to saying you've not made payment?

4. Do you worry about debt in the morning or last thing at night?

If you identify yourself with any of the above statements then Debt Support Trust may have an answer to help you. You can seek professional money advice from a registered charity today through calling 0800 085 0226 or completing the debt test below.


Tuesday, April 14, 2015
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Debt stigma - let’s break it down

Frivolous spending, too many holidays or just greed are common reasons why people who are not in debt believe others get into financial distress.

I gathered a group of people round a table last week, with nobody owing any debt other than a mortgage, to ask them their thoughts about why debt problems existed. The answers were enlightening.

"Because they buy, buy, buy and don't think about the consequences."

"People just think, I'll spend it now and pay it later without having a plan."

"It's because people can't manage their money."

Some people realised it wasn't just overspending in an uncontrollable fashion causing debt problems, but a change in circumstances. However, nobody sympathised towards a person dealing with a debt problem and certainly didn't think they should offer any support.

I personally still have debt - my student loan from my time studying is still being repaid. The interest rate is low and it's being cleared slowly, but surely, from the original balance. I too have used credit cards and paid them off, but if circumstances were different, for example divorce/separation or  a drop or loss of income, then I could have had a credit card debt which I couldn't repay in such a structured way. Most people may need to turn to credit to survive at a difficult period with the honest intention of repaying the debt in the future.

The Debt Support Trust charity was established because I have witnessed the crippling social and economic destruction debt problems can cause. I've watched friends and family struggle; their plight known by nobody, with their pain, worry and stress almost being masked with a stern, emotionless façade to conceal the true gravity of the panic their situation was causing them.

In reality, debt problems occur for a variety of different reasons. It can be down to overspending on day to day life where the credit cards become a noose around your neck and you face a struggle to get free. Rarely have I ever spoken to somebody overspending on credit who has said they did it deliberately and without concern for their creditors. A debt problem can occur through a divorce or separation. The household costs, which were once paid from two incomes, have now to be paid by one. Even if somebody takes action to address the deficit each month, it will take time to put the plans in motion and all the time the total debt is increasing. Injury or illness can force a person to stop working and their pre-existing debt, which was manageable, still has to be serviced but on a much reduced income.

There are various reasons why a person could get into debt and it's not always as simple as "they just overspend and buy whatever they want".

People contacting Debt Support Trust often feel frightened, unsure and alone. Frequently people cry when they explain how they have reached this point in their life. Their partner, family and friends may not know the full extent of their money problems and speaking to our charity advice team is the first time saying out loud: "I have a debt problem".

When helping people overcome their debt problem, they don't want our sympathy or pity or for somebody to judge their situation. What people really want when they call the charity is for somebody to listen to their financial predicament and offer useful, relevant and tailored solutions so they can take control of their finances, once again.

Breakdown the Stigma

There's only one route to resolving a debt problem and it's through a direct and honest approach to the situation. It's uncomfortable and for many people they won't have opened their mail or spoken to their creditors about their financial problem for months. Taking the first step is the hardest and is often a knee-jerk reaction when contacting us for advice - "today's the day" is what we hear frequently.

Through breaking down the stigma of debt we're encouraging people to seek debt help. It may not be from Debt Support Trust but instead the team at the local Citizens Advice Bureau, but seeking professional advice is important to take the first step back out of debt. Attitudes and opinions to debt need to change as people need the encouragement and strength to deal with the debt head on.

Being in debt is a miserable experience for anybody, so when somebody is struggling to repay their debt they require support and that's what Debt Support Trust is available to offer.

Helping Dermot

Former businessman Dermot turned to Debt Support Trust for advice after he'd been made bankrupt over a £70,000 debt owed to the Inland Revenue.

The 45-year-old married dad-of-two faced financial troubles with a number of creditors after his successful business hit hard times when he lost a number of regular contracts.

Dermot admitted he got into 'severe financial trouble', making matters worse by having his 'head in the sand' over growing money worries and avoided even sharing his financial woes with his wife. His marriage broke down and Dermot faced major health issues with stress and depression.

Since being made bankrupt In 2012 he's faced further issues when legal moves began to force the sale of his family's home to release equity to reduce his debts. He's still locked in a court battle over the case.

Dermot said: "Without question Debt Support Trust has saved my life. At one stage I felt I had nowhere to turn to and I was being put under incredible pressure. Their advice and support has been invaluable.

"Their team has allowed my voice to be louder and clearer as I've faced organisations who see me simply as a case number in a file on someone's desk. They've helped me write letters and given advice at a time I wanted and needed it and I just don't know what I'd have done without them. They've never judged me - they've just supported me."




Stuart Carmichael is the Chief Executive of Debt Support Trust which is open 8am to 7pm Monday to Friday and supports people with advice and solutions to their debt problem.

Thursday, April 09, 2015
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A Friend in Need is a Friend in Deed

Last week I met with an old friend, somebody I'd known for over 20 years and knew very well, but I didn't know this about his finances.

He and his wife got married 4 years ago, purchased a house and are both working full time. Their combined income was over £60,000 per year and they had no assets like stocks, shares or bonds. They both had a car on a conditional sale agreement.

My friend telephoned to say he had "a little debt" which he wanted to resolve. So, we met and discussed the situation. We reviewed his income, expenditure, assets and debts to understand the full picture.

He confessed he didn't really know the extent of his debt problem, so it was a shock to him when he realised he owed £16,000 to 4 credit cards, a personal loan and his overdraft. He was only making the minimum payments. No matter the level of debt, there is always a route back out towards financial freedom. The couple had a disposable income - the amount they could realistically afford towards their debt - of £350 per month.

yay-10142136It was then onto the debt advice. He had heard of a Trust Deed before and thought this option would be his best option. The Trust Deed is an ideal debt solution for some people, depending on their circumstances. It lasts 4 years and you pay what you can reasonably afford each month. At the end of the solution any remaining debt is written off.

My friend would not be best entering a Trust Deed and I explained why. If he were to pay £350 per month he would be debt free in under 4 years in a debt arrangement scheme. This option freezes interest, charges and protects the property from creditors. All of the debt is repaid and I could ensure he would enter a fee-free debt arrangement scheme. After some discussion of the advantages and disadvantages of the solution, he agreed the debt arrangement scheme would be the best option.

All in all, the process took about 20 minutes.

Helping a Friend in Debt

It's not the first time I've spoken to friends, and family, about their money problems. I doubt that I'm unique in this scenario but what can you do for the best to support a person dealing with debt?

My Top Tips for dealing with debt are:

  1. Don't panic: The first feeling when a partner, friend or family member tells you they have a debt problem is to worry that there's no solution. There is always a route back out of debt.
  2. Take an income, expenditure, a list of assets and debts: Put the kettle on, make a cup of tea and grab a pen and some paper. Set aside 10 minutes to jot down the household income, expenditure, the value of any assets (and any secured loans that are outstanding) and a list of the debts with the outstanding amounts.
  3. Reassure the person in debt: The person who has been managing the debt will have been doing so for some time. It's likely to have caused them sleepless nights, trouble focussing on at work and in relationships and could have affected their eating habits. Let them know you're going to support them through the money problems - a problem shared is a problem halved.
  4. Seek professional advice: When it comes to the advice it's often best to talk through the options with a professional debt advice organisation. You can visit your local citizens advice bureau or receive telephone help from Debt Support Trust on 0800 085 0226.

Contacting a Charity

Debt Support Trust is available to provide debt advice Monday to Friday 8am to 7pm or you can take the debt test to give you an idea which debt solutions may be suitable.

You can call the charity on 0800 085 0226 where a friendly debt advisor will be able to help.



Stuart Carmichael is the Chief Executive of Debt Support Trust which is open 8am to 7pm Monday to Friday and supports people with advice about and solutions to their debt problem.

Friday, March 20, 2015
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