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UK Wide Debt Advice Charity
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Signs You Could Have a Debt Problem

It's often perceived that credit is good and debt is bad. However, every year good credit goes bad for thousands of people. Borrowing money can help you achieve your personal objectives, such as home improvements, but we explore some of the signs that you could have a debt problem because of troublesome credit.

For most people that get into debt they tell us "I wish I had something to show for the debt". The reason most people don't have a luxury house, designer clothes or have travelled the world on credit is because that rarely happens.

Credit is frequently used as a "buy now and pay it later" financial service. But, along the way, it's not uncommon for people to struggle with their once affordable credit commitments.

Reasons For Debt Problems

There are numerous reasons why a person can find themselves struggling to manage their credit commitments. Nobody ever wants to be in debt, so why does it happen?

  1. Loss of Income: During a period of unemployment many people turn to a line of credit to survive. If the unemployment continues for longer than anticipated then the debts continue to mount.
  2. Separation / Divorce: A change in circumstances, such as separation or divorce, can create a debt problem. The cost of living in a couple is often more affordable as the bills are split. This is particularly true when the debt existed while in the relationship and you're trying to repay the money borrowed at the same time as managing your enhanced expenditure.
  3. Consistent overspending:  The intent when borrowing money is always to repay it. However, debt can grow and become unmanageable.
  4. Unexpected repayments: Many benefits, among other debts, can be overpaid in error and repaying these can be difficult. Typically, repayment plans can be setup so the debt can be repaid, but if the repayment period is too long a debt solution may be required.

Debt Problem: What are the signs?

On average, it takes 7 years of accruing debt and a year of struggling to make the monthly payments, before it becomes impossible and people seek debt help.  There are signs that you may be struggling with your debt and these are our top 5:

  1. Minimum payments: Making minimal payments towards debts because that's all you can afford is a sign you need debt help.
  2. Feeling of dread: When the bills arrive through the door do you fear opening them, so they mount in a corner? Many people in debt feel unable to open bills when they know their debt has become unmanageable.
  3. Credit to survive: Continually using credit to pay for food or living costs because your salary and income is used to pay debt is a sign you could need debt advice.
  4. Consistently balance transferring: Using the balance transfer with interest free period features of a credit card is an excellent route to repay debt, without having to pay interest. However, if you're balance transferring and continuing to make the minimum payments then the debt isn't going anywhere.
  5. Family and Friends: If you've stopped socialising with friends and arguments with family are increasing, this could be a sign of debt and money worries.
  6. At Night: Is your debt often the last thing you think about before bed and the first thing you think about in the morning?

How to Deal with Debt?

Once you know you have a debt problem you can always speak to a debt advice charity like Debt Support Trust. However, if you don't feel ready to talk to anybody about your money worries you can complete a statement of affairs.

Your statement of affairs considers your monthly income and then what your expenditure is for essential items like food, mortgage/ rent, council tax and travel.

In a separate column, list the companies you owe money to and a rough balance. If you have any assets like stocks, shares, bonds or equity in your house you should list these under assets.

Once you've completed this process you will know how much your cost of living is each month and how much money you have available to repay towards debts.  You can speak to a debt advisor at Debt Support Trust who will be able to talk you through all of your options.

Alternatively, you can complete the debt analyser online which summarises your income, expenditure, assets and debts.

analyseyourdebt

Friday, March 24, 2017
Debt Support Trust
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Government Urged to Help Families

The impact of personal debt on families is unmeasurable. How do we place a value on the resulting stress and fear debt problems create? Whether it's debt collectors at the door or families arguing due to money worries, can we comprehensively measure the implications of troublesome debt?  The Children's Society is calling on the Government to provide legal protection to help families with problem debts.

The proposal would include a 12 month moratorium to help families in debt organise their finances without the pressure from creditors and with payments and interest frozen.

Interest Free Period - The Research

The Children's Society research suggests that 620,000 families are spending more money on overdue bills than on food.  38% of families are borrowing money in order to pay for essential living costs like food.

Our own research at Debt Support Trust suggests that people typically fall into the debt trap because of unforeseen circumstances. For example, separation or divorce, loss of income or a change in circumstances are typical reasons for debt problems. A debt which was once manageable can quickly become a repayment issue.

The proposed changes recommended by The Children's Society could help protect children from the societal effects debt can cause.

Managing Debt - The Effects

Debt problems often result in quick decisions. We found that people spend roughly seven years accruing debt, a year worrying about it before they make an immediate decision on how to deal with the debt.

If people had a period of protection from their creditors to help make an informed decision on their financial future, could that help guide more people towards the correct debt solution? Would fewer people enter bankruptcy because they realised they could potentially repay the debt?

In our experience, very few people want to enter a debt solution. In truth, it's the complete opposite- they wish they never had to pick up the phone and make the telephone call. If 12 month moratorium periods were submitted by debt advice charities it would encourage people to seek advice and protection, so they could consider their options without the threat of creditor action.

In any event, the safety and security for children would be enhanced. Parents would be able to budget with a charity advisor and receive necessary advice on their finances. Barnardo's estimates there are 3.7 million children living in poverty in the UK. Positive action must be taken to alleviate this social and financial crisis and it starts with changes within the Government.

Tuesday, March 07, 2017
Debt Support Trust
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Valentine's On A Budget

Love is in the air as Valentine's day is fast approaching. But, with forecasts predicting sales to topple last years estimated £470 million spend, how can you say "I love you" without breaking the bank?

A week today, we'll be romancing the people we love with gifts, dinner and our time. While the latter may be free, the cost of gifts can leave our bank balance a little unloved.  So, without being a miser at this time, we've provided our top tips to express your love and save a little money in the process.Hands-Heart

Top tips to save money at Valentines

We've got some top tips to manage your money during Valentine's day:

  1. Cook a romantic meal: Dinner out can often be rushed with set times, never mind the limited set menu. Improve your Valentine's night and save money by making a romantic home cooked meal!
  2. Buy in advance: Waiting until the last minute often means a reduced selection and what's left could be more expensive than you planned. Buy it now and keep it stored away!
  3. Personalise the day: While it's great to create a personalised card online, it can often be a more expensive process. You can buy Valentine's cards for less than £1 from places like the Card Factory and personalise it in your own words. However, if you do want to create an online personalised card you can do so at a reasonable cost with the Card Factory for around £2.50, including delivery.
  4. Set a budget: This goes for most shopping, but setting a realistic budget is vital. There's no point splashing the cash for one day if you'll struggle to survive for the rest of the month. Set your budget before you shop. It also helps to set a budget in advance with your partner.
  5. DIY Valentines: You can always keep costs down by making a gift yourself. Breakfast in bed, chocolate strawberries or a personalised gift box can show your partner you love them and manage your budget.

Remember, love and money don't necessarily go hand in hand. Diamonds may be a girl's best friend but they are pricey! And, the old adage is true, the best way to a man's heart is through his stomach and it doesn't have to be the most expensive restaurant.

Thrifty in Love

But it's not all bad news this Valentine's day - you can love your partner and your wallet at the same time! We've found some of the best deals to help you:

  1. Go to the cinema: Why not book a date to the cinema for Valentine's day? If you have 2 for 1 cinema tickets, from places like Meerkat Movies, then your Valentine's day could be action packed.
  2. MRoseFlowersHalf Price Flowers: £14.99 bouquet of flowers https://www.blossominggifts.com/midnight-rose.  Available until 13th February 2017.Use MROSE50 discount code at the checkout to save 50%!
  3. Spa Break: What about a spa day for two at Bannatyes? Groupon has some excellent deals https://www.groupon.co.uk/deals/bannatyne-s-health-club-h-o-8
  4. Eating out: If you do want to eat out, you can find deals on websites like Living Social https://www.livingsocial.co.uk/ to find deals suitable to your budget.
  5. An experience to remember: Virgin Experience days have deals https://www.virginexperiencedays.co.uk/valentines-special-offers worth considering including meals out, a night away and even tickets to comedy clubs.

Whatever you do this Valentine's day, have a great time. Love isn't measured in pounds and pence - think outside the box this Valentine's day and keep it personal to your partner. It's the thought that counts, so think about what they would like and what's personal to them. As we chat about Valentine's gifts at Debt Support Trust, some of the best and most memorable presents we've received include a mixed tape of personal songs, a picture of a happy time and a gift that was created from scratch.

Tuesday, February 07, 2017
Debt Support Trust
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Debt Causing Sleepless Nights

sleepDebt Support Trust has seen a rise in the number of people using our website to seek debt advice during the night.

It would appear from our latest statistics, debt is causing a greater number of sleepless nights than last year.

We have recorded a 32% increase in the number of visitors to our website between the hours of 12am - 8am, between Jan 16 - Oct 16, compared with the same period last year.

More concerning was the even greater increase in the number of people using our website between the hours of 3am - 5am, which saw a 37% rise in traffic.

Debt Worries Cause Sleepless Nights

We've all had sleepless nights due to stress or things we are worrying about and debt is no exception, with a number of previous studies showing it's one of the most common reasons for sleep problems.

In 2014, a study found 1 in 7 adults struggle to sleep because of financial and debt problems keeping them awake.

One of the most well-known causes for sleep problems is stress and debt is often attributed as one of the most leading causes for stress & anxiety.

Charity Trustee of Debt Support Trust, Stuart Carmichael said:

"It's common for people worrying about debt to find it difficult to sleep at night, but this research shows they are not alone. It's important to remember there are options and solutions to deal with debt problems."

"Debt Support Trust has an online debt test which can quickly give people an answer to their debt problem, should they find themselves worrying during the early hours."

DEBT HELP TO RELIEF STRESS

If debt is causing you to have sleepless nights, you aren't alone, our online debt test can be completely 24/7, 365 days of the year. Alternatively you can email us about your debt problem and we'll respond at the earliest available opportunity.

Whether it's day or night we don't believe anyone should suffer alone with debt problems, so let us help find you a solution.

 

Debt Support Trust has seen a rise in the number of people using our website to seek debt advice during the night.

It would appear from our latest statistics, debt is causing a greater number of sleepless night than last year.

We have recorded a 32% increase in the number of visitors to our website during the hours of 12am - 8am, between Jan 15 - Oct 15 compared with the same period this year.

More concerning was the even greater increase in the number of people using our website between the hours of 3am - 5am, which saw a 37% rise in traffic.

Debt And Sleep Problems

Wednesday, October 26, 2016
Debt Support Trust
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How Much Debt Do I Have?

One of the most common questions we hear at Debt Support Trust is, "I don't know how much debt I actually have".  For many people that don't have a debt problem, they may not fully understand how this can occur, but it's actually not surprising.

When the cycle begins and money is borrowed and repaid, there's no concern about the imminent arrival of a creditor statement landing on the doorstep. We know how much money has been borrowed and needs to be repaid. But, when a person becomes overstretched financially or a life changing event occurs, such as separation or loss of a job, it can be difficult to keep track of just how much money has been borrowed.

Being in debt and knowing the level of debt has grown to an unaffordable sum can result in people avoiding opening letters or answering telephone calls from creditors. This only accentuates the problem, but it's the primary reason people don't know how much debt they actually owe.

How to find out your level of debt?

The first step in any process to deal with debt is admitting a problem exists and that a solution is required if you're ever going to be debt free again. Ultimately, an issue with outstanding debts isn't going to disappear and it's best to tackle the predicament head on.

If you have moved property or have not heard from your creditors for some time, then you have two options to find out your level of debt. The first is to contact the creditor and ask for an up to date balance. Most people will find this intimidating, but it's the most accurate way to understand the outstanding debt. The second option is to apply to see your credit file via a credit referencing agency. Most credit referencing agencies will offer you a free trial, however, you'll have to cancel before the end of the trial or you'll be charged monthly for the service. One of our favourite websites is http://www.checkmyfile.com/ as it allows you to see reports from multiple credit referencing agencies in one place.

Know your debt? Get a Solution

Once you know how much debt you have, then you're in a position to understand what debt solutions are suitable for your circumstances.  Any debt advisor will struggle to give accurate debt advice without knowing how much debt is outstanding.

You may be suitable for a number of different debt solutions. It's the role of the debt advisor to explain every option, detailing the advantages and disadvantages of each solution to empower you to make an informed decision on how to deal with the unsecured debts.

You can speak to a debt advisor in confidence at Debt Support Trust on 0800 085 0226.

Friday, August 19, 2016
Debt Support Trust
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Bankruptcy Moves Online

Changes to the process for people wishing to make themselves bankrupt take effect today for people living in England, Wales and Northern Ireland.

The changes mean there's no longer a paper application and the fee has been reduced from £705 to £655.

We've outlined the changes so you're fully aware of how to make yourself bankrupt. It's important that prior to submitting an application you seek debt advice to ensure

Application to Enter Bankruptcy

Previously, the cost to enter bankruptcy was £705 and you would have to submit your paper application to the local court. However, from today the process has been simplified and it's completed online.

The fee to proceed has also been reduced to £655 (£130 application fee and £525 for the management fee). You can make instalments online to save for the debt solution.

If you need help and assistance to complete the online bankruptcy forms you can receive guidance from Debt Support Trust on 0800 085 0226.

Before Entering Any Debt Solution

It's important that prior to entering bankruptcy you seek professional debt advice. While this may be the correct debt solution, by seeking debt advice you can fully understand the implications of entering the solution to deal with unsecured debts.

A debt advisor can explain what will happen with any assets you own, what debts can and cannot be included in bankruptcy and if you will be required to make payments into your bankruptcy each month from your disposable income.

Debt Support Trust can give you advice on bankruptcy and other debt solutions on 0800 085 0226.

Wednesday, April 06, 2016
Debt Support Trust
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Getting Debt Advice

Getting debt advice is something people often do once they have exhausted all other options, including borrowing from friends and family and getting further credit.

While entering a debt solution may not always be the best solution, it is always advisable to seek advice to confirm the most suitable route forward.

The most common statement we hear from the people we help at Debt Support Trust is "I feel better after speaking to you" and that applies to people who enter a solution or simply get money advice.

A charity advisor helping you to deal with a debt problem will lift the weight and burden, which will likely have been on your shoulders for a long period of time.

A previous caller to the charity said they were in the process of having their property repossessed, something which could have been resolved with a debt solution 3 months earlier.

When To Get Debt Advice

The ideal time to get debt advice is when someone realises they are going to default on their financial obligations or immediately after. This allows the problem to be resolved quickly and often without the need to enter a debt solution.

The fear of dealing with debt can often be worse than the actual prospect of taking the first step - it's why we often hear "I got the best night's sleep in years after speaking with you". After seeking debt advice people often feel better about their financial situation, which is why we urge people not to deal with debt alone.

Getting debt advice early can help alleviate the stress which can grow and lead to more serious health concerns in the future. Debt Support Trust charity Trustee, Stuart Carmichael said,

"Rarely does anybody WANT to contact Debt Support Trust, they do so because they NEED to. People often worry about their debt problem for a year before taking steps to address the underlying issues. We never judge people and our advice team will give people the options appropriate for each individual person so they can once again be debt free."

sleep

Get Debt Advice Today

If you are struggling with a debt problem or think you will soon default on a contractual payment, contact Debt Support Trust on 0800 085 0226. Alternatively you can complete our online debt test.

Tuesday, February 16, 2016
Debt Support Trust
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Is Bankruptcy Right For You?

The majority of people we speak to will often have heard about one or two of the available debt solutions. Yet, there are a variety of different debt solutions which a person could be applicable for and consider. Each debt solution is designed to help resolve outstanding unsecured debts and regain control of personal finances.

For some people, bankruptcy is the only debt solution they are aware of so they believe they may need to enter this solution. However, in many instances bankruptcy isn't suitable and a full review should be completed before debt advice can be provide. Some people are surprised to hear that they actually have two or three different debt solutions which they could enter. So, at Debt Support Trust, we explain what these solutions are along with the positives and negatives of each route.

The consequences of wrongly entering any debt solution can be severe, especially when it's an insolvency solution, such as bankruptcy. While bankruptcy can be the best debt advice to dealing with a debt problem, it will also have a number of other effects on a persons life.

Consequences of Bankruptcy

There are a number of routes to enter bankruptcy and across the UK the process and costs will vary, but they all have the same consequences once it begins.

  • Income Payment Order: When entering bankruptcy you will be asked to provide a statement of affairs. If it's determined by the bankruptcy administrator that you have disposable income to pay towards your debt then you'll need to pay this for 3 years.
  • Assets: Any savings and realisable equity from assets could be sold to release their value, which will be paid towards the debt.

There are other negatives of bankruptcy which would apply, such as a negative credit file. Some employment contracts restrict a person from being made bankrupt and retaining their job, so it's worth checking in advance.

However, for some people the best advice is bankruptcy. The reason is often because they have little or no assets, low levels of income or solely state benefit income and an inability to repay the outstanding debts within a reasonable period of time.

Choosing Your Debt-Free Route

There are other solutions to resolve problematic debts and the correct solution will depend on your personal and financial circumstances. Debt plans like token payments, trust deeds, debt management plans and IVAs are solutions which you may be applicable for.

In a conversation with a Debt Support Trust debt advisor and a person contacting the helpline, the caller believed her only option was bankruptcy, however it was soon clear this would not be the best option for her.

She worked full time, had a property which had accumulated a substantial equity and a disposable income of over £200 per month. While the debt was £35,000, bankruptcy would have meant she would likely lose her property and be asked to repay at least some of the debt from her disposable income.

We considered all available debt solutions and explained what would happen in each debt solution. The caller wanted to retain her house and still pay back her debt. We helped to set up an affordable payment plan and get the debts back under control.

Which Debt Solution?

Before entering any debt solution it's important to speak with a not for profit organisation to give you the best possible debt advice.

They should explain each debt solution you are suitable for along with the benefits and consequences of entering it.

If you are unsure how the solution is run, the associated costs or the impact it could have on you, then seek a second opinion. You can call Debt Support Trust on 0800 085 0226 for debt advice and information about dealing with your debt.

Friday, January 29, 2016
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1 in 4 Cut Spending on Heating and Food To Afford Christmas

Nearly a quarter of Brits have said they would cut their spending on food and heating to afford the cost of Christmas, according to new research.

The report from Confused.com found 22% of credit card holders said they would spend more than they intended to during Christmas. 13% would cut down on their food expenditure, while 10% would cut down on heating to pay off debt.

Last year saw a record amount spent during "Cyber Week" with consumers spending a total of £3bn during the run up to Christmas. 12% of credit card holders said they would spend more than £1,000 during the festive season, with the average person spending £528.

Stuart Carmichael, Chief Executive of Debt Support Trust said:

"The thought that people will sacrifice food and heating to repay their debt is frightening, even more so as the majority of people contacting Debt Support Trust have children too."

Stuart implored people to seek help,

"There are options available to resolve money worries and people don't have to struggle alone. If credit cards are a problem then a balance transfer could offer time and the affordability needed to resolve the situation."

7% believe they will struggle with their finances during 2016, with 1 in 5 admitting their financial circumstances are worse than in 2014.

The report also highlighted 27% of people would cut down on eating out, 23% on holidays and leisure activities and 7% on using their car.

Credit Transfer Tuesday

New credit card data suggests January could be a record month for balance transfers, following record online sales on Black Friday last month.

The comparison website believes January 12th could see the highest ever number of balance transfers, due to the record spending during Christmas last year.

68% admitted to not balance transferring, with 12% believing it's too complicated, 5% fearing it could damage their credit rating and 7% unaware it was even an option.

Debt Advice After Christmas

While balance transferring can help some people resolve their debt problem, for many people, their financial problems require a more in depth review.

Some people may find they had a debt problem prior to Christmas, which they were only just managing and the cost of the festive period is the final straw.

If someone isn't able to deal with their debt with a single balance transfer, they may require debt advice and/or a debt solution.

For anyone who is unsure about the right solution to dealing with their Christmas debt, it is important to seek debt advice for a full financial review.

If you require debt advice please call Debt Support Trust on 0800 085 0226 or alternatively you complete our online debt test.

Monday, January 11, 2016
Debt Support Trust
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Insolvency Figures Rise For First Time In A Year

Personal insolvency figures have increased for the first time in a year, according to The Insolvency Service.

In the three months to the end of September, 19,683 people across England and Wales were declared insolvent.

While the number of people entering insolvency solutions decreased 18.5% from the same quarter last year, it increased 2.8% from the previous quarter this year.

The increase has been driven by individual voluntary arrangements (IVAs), which was the only insolvency debt solution to increase.

Insolvency Statistics

The insolvency figures produced by The Insolvency Service show:

  • Bankruptcy: 3,857 people entered bankruptcy in the third quarter of 2015, down from 3,987  in Q2 and is the lowest figures for 25 years.
  • Individual Voluntary Arrangement (IVA): 10,197 people entered an IVA, this was up from 9,333 in the previous quarter.
  • Debt Relief Orders: 5,629 people entered a DRO, down from 5,832 in Q2.

Reason for Bankruptcy Decrease

As unemployment figures decrease it's likely the number of people entering bankruptcy will also fall. If someone has a disposable income they may be more suitable for an IVA, or an informal debt solution, allowing them to repay their debt in an affordable solution.

This would also explain the rise in the number of people entering an IVA, however it could be the figures averaging out over the year.

Stuart Carmichael of Debt Support Trust said:

"While it's positive bankruptcy figures are down, it is concerning that overall insolvency figures have increased. The number of insolvency cases were declining recently and this could be a sign figures are levelling out.

It's important people seek debt advice before proceeding to enter a debt solution."

Bankruptcy Changes

In October there were changes to the traditional bankruptcy debt solution which meant creditors can only apply to make someone bankrupt if they owe £5,000 or more, up from £750.

This is likely to further decrease the number of people entering bankruptcy, as creditor applications may also fall.

Monday, November 02, 2015
Debt Support Trust
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