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UK Wide Debt Advice Charity
Call us at 0800 085 0226
E-mail: contact@debtsupporttrust.org.uk

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I am in debt and need help

How do you start the conversation when asking for debt help? It's not something most people think about. But, for many, they are the hardest words to say.

At Debt Support Trust, a registered debt advice charity, we encounter lots of different ways by which people say they need help.

Undoubtedly, the first words are the hardest so some people say, "I am in debt and need help". This enables us to explain what we do and how we do it. Other people prefer to quickly explain what's happened and you can almost feel the weight come off their shoulders just by telling someone about their problem.

As soon as somebody informs Debt Support Trust they are in debt and need help we can get to work on finding the appropriate debt solutions for them. We explain the pros and cons of each solution and what the implications would be for things like your job, house and credit history.

Asking for Debt Help at a Charity

We make it as simple as possible at Debt Support Trust to ask for help. You can email us with a query, complete a debt analyser and ask us to call you back, or pick up the telephone and call 0800 085 0226 to speak with a friendly advisor.

Telephone: 0800 085 0226

Email: contact@debtsupporttrust.org.uk

Debt analyser: analyseyourdebt

The Best way to Ask for Debt Help

There really isn't a best way to ask for debt help, whichever is best for you is the most important fact. When you call, email or complete a debt analyser our debt advisors are trained and ready to listen so we can best help you with your debt problem.  We supply you with the necessary advice to become debt free and if you decide not to take our advice that's entirely your choice. There is no judgement or pressure from anybody.

So, don't worry about what you'll say or how you'll explain it all, because it's a friendly call with the ultimate goal of helping you become debt free.

Most importantly, just get the help you need and don't struggle with debt alone. Debt Support Trust is a registered debt advice charity open from 8am - 7pm Monday to Friday. Everything you tell us is completely confidential; we don't share your information with anybody else without your permission.

They may not be easy words, but "I am in debt and need help" is the start to becoming debt free.

Friday, August 10, 2012
Debt Support Trust
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Fears about Interest Rates

Fears rise that the Bank of England will not cut interest rates, which would reduce lending.

Analysts predict that when the Monetary Policy Committee (MPC) meets on Thursday, the Bank of England will not cut interest rates to a historic low. Though there has been a worrying slump in lending by banks this will not be enough for them to cut the interest rates.

Figures out for June showed that the number of new mortgages approved were at their lowest level for 18 months and all forms of lending saw the smallest rise for two years. This has created fear that Britain could fall into an unprecedented 'triple-dip' recession.

There is no doubt the MPC will consider the benefits of cutting the interest rates to 0.25 per cent. The recovery seems further away than many people had predicted, and leading economists are warning that if Greek exit from the EU it could put the UK in financial chaos.

If the interest rates are cut analysts are concerned whether this will actually increase lending. Yes, mortgages and loans should be cheaper, however savings would not earn much interest and this could mean saver would be tempted not to bother putting their money into banks, this in turn could reduce the money they have available to lend.

Also a rates cut will reduce lenders existing assets making margins a lot less for them which will also hinder their ability to offer new loans.

UK and euro zone economist at Scotia bank Alan Clarke said 'The poor GDP data makes it hard for the Bank of England not to loosen monetary policy further.)'

'However, we judge that a further reduction in bank rate could backfire and hold back the creation of new mortgages. Hence we suspect that the further policy ease will be in the form of more quantitative easing (QE), not a cut in bank rate.'

The new £80billion 'funding for lending' scheme was aimed at kick-starting bank lending. At their July meeting the bank raised the notion that this could lessen the pressure about the impact of a rate cut.

Economist at Investec Philip Shaw said 'another QE boost was more likely and predicted a further £50billion in November when the current round is completed.

He said: 'we suspect for now the Bank will plough on with its primary stimulus tool, quantitative easing.'

Howard Archer at IHS Global said: 'The MPC indicated in the minutes of their July meeting that they had no plans to bring interest rates down from their current level of 0.5 per cent in the near term at least.'

In the Banks 318 year history if they did reduce the rate to 0.25 per cent it would be the lowest ever.

Home loans in June according to the banks own figures were 44,192 this was down from May which was 50,544 and the lowest level since December 2010.

The level was down 10 per cent on June last year, and they said it was 'exceptionally weak'. Different surveys have shown that consumer confidence is at rock bottom, and there is a big slow down on sales in the high street.

An economist at investment bank Citi Michael Saunders said the data 'looks like a precursor to continued economic stagnation rather than recovery'.



 

Wednesday, August 01, 2012
Debt Support Trust
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Get Out of Debt Free

When struggling to manage a debt problem, it's not uncommon to ask "How can I get out of debt free".

We explore how you can become debt free and what options exist to minimise the amount of money you have to pay.

Debt Advice

Debt advice can often be free. Many organisations which operate a for-profit debt advice service will ask for a payment for providing debt advice. However, other services exist.

Your local Citizens Advice Bureau can provide free face to face debt advice. Alternatively, Debt Support Trust provides a free telephone based debt advice service which you can access on 0800 085 0226.

Charities do not charge for their services and will not ask you to make any payments or donations.

The information you provide a charity is free, confidential and impartial, which is why speaking to a charity is often the best solution to a debt problem.

analyseyourdebt

Debt Solutions

While many debt advice charities will offer free debt advice, they will not be able to supply a free debt solution. It's important you are aware that some debt solutions will cost money, however many will not.

Negotiating with creditors

When you negotiate with creditors this is one solution to debt which will not incur a fee or charge. This can be a good option if your unsecured debts, such as credit cards, personal loans and overdraft debts are below £5,000.

Debt Management Plan

There are hundreds of debt management providers in the UK and the majority charge. However, there are some free organisations which will not charge you for setting up a debt management plan. This means you will be debt free quicker.

IVA and Protected Trust Deed

An insolvency solution, like an IVA or Protected Trust Deed (Scotland only) requires a licenced insolvency practitioner. These insolvency practitioners have staff producing proposals and contacting creditors. Any IVA or Trust Deed will come with fees attached. The fees are not paid directly by you, but do come from money which you have repaid each month. This means less money is returned to your creditors because the Insolvency company takes their share from the money first.

Becoming Debt Free Advice

Advice on becoming debt free is available from a free debt advice charity like Debt Support Trust. If you would like debt help, please telephone 0800 085 0226 or complete a confidential debt analyser.

analyseyourdebt

Wednesday, August 01, 2012
Debt Support Trust
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Budgets Squeezed as Food Prices Rise

Consumer group Which? has revealed that 4 in 10 people are choosing to spend less money on food as their financial budgets are squeezed.

Which? found that one household in every ten in the UK owes more than £20,000, with the average debt being around £5,000. It's one of the reasons why people are being forced to cut back on essential items like food.

The Which? survey also revealed people are choosing to remain in the UK instead of going overseas. Six out of ten people are reducing the amount of money they are spending on holidays because they cannot afford it. While people refuse to go on holiday because of the credit crunch they are maintaining their subscriptions to mobile phones, satellite TV and broadband.

As the UK enters a double dip recessions it's thought that this current standard of living has not been felt since the 1920's.

Payday Loans to Survive

The payday loan epidemic supports this problem, as people struggle to survive financially they are turning to payday loans to live day to day. The problem only arises when it becomes impossible to repay the payday loan.

Failing to repay a payday loan on time can lead to increased costs and charges, creating an even greater financial hole.

Food before Debt

We always say at Debt Support Trust you should pay your priority expenditure before you repay your debt. Priority expenditure is not Sky TV, but it does include ensuring you have a roof over your head, council tax, gas and/ or electricity to heat & power your home and food to live.

After you have paid your priority expenditure you can then determine how much money you have left to pay towards your unsecured debt.

Help with Budgeting

If you need help to budget your finances and have debt problems then you can telephone Debt Support Trust on 0800 085 0226. Our friendly advice team are on hand to support you with your money worries and guide you towards being debt free.

 

analyseyourdebt

Monday, July 30, 2012
Debt Support Trust
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British Gas Owner Profits Up

 

British Gas Owner Profits Rise 15%

The owner of British Gas (Centrica) has released their financial results for the first part of the financial year. The operating profit for the company was £1.45 billion.

The British Gas residential energy division had an operating profit of £345 million, up 23%. It's expected the reason for the increase was because of the 'colder than usual' temperatures the UK experienced between April and June.

British Gas: Costs May Go Up

Unfortunately we shouldn't expect the cost of household gas to go down anytime soon. In fact, British Gas is warning that the prices could be on the rise because wholesale gas prices are set to increase.

British Gas Profits in Context

British Gas has achieved profits in their residential energy division of £345 million for the first 6 months. That equates to £22 profit per customer for 6 months, or £3.64 per month.

Over the course of a year £44 profit per customer doesn't seem like a lot. But when it's multiplied out across the 15.8 million British Gas customers you can see how the profits are generated.

British Gas reduced their prices by 5% four months ago but on today's results British Gas is still making £2million every day!

Cost of Fuel

There are millions of people living in the UK in fuel poverty, where they can't or won't fuel their property in fear of the bill that will arrive shortly after. British Gas and other energy suppliers provide support to monitor and manage a person's bill, but knowing a person can't put the heating on because it's too expensive doesn't keep a people warm. It simply means a person won't get into fuel debt.

Steven, 45, contacted Debt Support Trust last week to ask for help with his debts. He explained that on jobseekers allowance he didn't have enough money to feed himself and fuel his house. He was eating cold tinned food and keeping his electricity off as much as possible. When the bill came in, despite keeping his fuel to a minimum, he told a Debt Support Trust volunteer he dreaded opening the letter because he knew he couldn't afford it.

A yearly saving of every £30 would help Steven on his energy fuel bills.

There's no easy answer on resolving the fuel poverty problem. The cost of gas when British Gas purchase it wholesale is too high for some people in the UK, even without the £44 annual profit. It's a fundamental problem which the Government's energy division is no doubt working tirelessly on, but in the meantime, people like Steven will have to wait for an affordable answer, struggling to survive.

Debt Problems and Fuel Costs

Gas and electricity are priority expenditures, along with rent / mortgage, food and council tax. These are all essential to help you live and as a result should be paid first, before any unsecured debt. If you have unsecured debt you should contact a registered charity.

For face to face debt advice contact your local Citizens Advice Bureau who will try and help you save money and support you with your debts. If you would prefer telephone based debt advice and help with your energy bills then you can telephone Debt Support Trust on 0800 085 0226.

Thursday, July 26, 2012
Debt Support Trust
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Struggling with Debt

Many of us find ourselves in a position where we are struggling to repay our debt. The question is what we should do?

Struggling to Manage Debt

The first thing is to prioritise our debt. There are some bills which should be paid first, for example mortgage/ rent, council tax, gas, electricity and food are all examples of priority expenditure which must be paid before even thinking about debt problems.

The next thing to do is to make sure we are not spending excessively. Is sky movies essential or could money be saved by reducing your package? When you look closely at you outgoings you can be surprised at ways in which you can cut your overheads. There are a lot of good deals on at the moment so it may be cost effective to change over some policies, home or car insurance or your gas and electricity supplier.

Another way of cutting cost is shopping once weekly and writing down what you want to buy. This means we do not purchase items that we do not need.

The next thing to do is to look at your debt. What is the minimum payment you have to make? Are you struggling to make this payment every month because the interest has grown too large? If so and you're struggling to manage debt then call Debt Support Trust for advice on 0800 085 0226.

Debt Help for Struggling Debt Problem

Once you have cut your overheads and cut your expenditure if you are still struggling with debt then it's time to seek professional debt help from a registered charity.

Always speak to a registered charity offering free debt advice. The last thing you want to do is to add anymore to your debt.

There are a number of different options out there for people struggling financially though what is best suited to you can only be advised once they have gathered information about you.

A qualified debt advisor would need to know your income and expenditure, the amount of unsecured debt you have. They will also want to know about any assets you may have, including any equity in property. Once this information is gathered they will advise you on the best way to become debt free.

For everybody the advice varies, as your own personnel circumstances have to be taken into account fully and tailored advice should always be provided.

Solutions when Struggling with Debt

It may be that our qualified advisors think you should negotiate with creditors directly. They will give you a letter template to help you do this.

It may be you are suitable for a Debt Management Plan (DMP). If this is the case they will give you details of how to enter a Debt Management Plan for free without paying fees.

The qualified debt advisor may think you are best suited for an Individual Voluntary Arrangement (IVA), to enter this solution you will need an insolvency practitioner, they can advise you of one or you can choose to find your own.

Bankruptcy may be the best solution, in which case we will help to get the paperwork, explain how to proceed and provide support in completing the documents.

There are a variety of different debt solutions available in the UK and you may be suitable for several of these options. If you are then, you are able to make a decision about which route you take. Ultimately, if you're struggling with debt you may need to speak to somebody for help. Please ensure you contact a registered charity who will not charge you a fee, such as Citizens Advice Bureau or telephone 0800 085 0226 to speak to somebody at Debt Support Trust.

We're here to help.

Wednesday, July 25, 2012
Debt Support Trust
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“I don’t Have to Pay Anything In Bankruptcy”

True Stories is a new feature on the Debt Support Trust blog. We often speak to people who have misconceptions about debt and the misunderstanding can cause fear and worry. So, we've created our true stories section for common questions we hear at Debt Support Trust, in case other people are worried about the same problems. We never reveal personal details about anyone we help.

True Stories: "I don't have to pay anything if I go bankrupt"

Bankruptcy is associated with people who cannot afford to pay their debt, but it's a misunderstood debt solution because people believe that when you're bankrupt that the debt is "wiped off", you don't have to pay anything and your credit file is damaged.

Most of this is true. The debt you cannot afford to repay will be cleared and your credit file will be damaged for 6 years from the date your default is added. However, you will have to pay something towards the cost of your bankruptcy.

Cost of Bankruptcy

There is a fee to enter bankruptcy depending on the type of solution you are entering. If you are entering a Debt Relief Order then the fee would be £90. The cost for traditional bankruptcy is £700. If you don't qualify for the Debt Relief Order but are unemployed or in receipt of benefits then your fee could be reduced to £525.

The fees are charged as standard to process your application and if necessary, will include a court fee.

Income Payment Order

If you do not qualify for the Debt Relief Order and have entered bankruptcy through a court, then your official receiver in bankruptcy will be in touch shortly after your court date. They will review your finances and determine if you have any spare money each month.

If the official receiver believes you can contribute towards you bankruptcy then you will be asked to do so for three years. State benefits will not be taken into account when assessing how much you should pay towards your bankruptcy.

If you are required to make a payment towards your bankruptcy then this will be reviewed frequently to ensure the payment is still affordable. If you earn extra money, or have a drop in income, you should inform the official receiver immediately.

Bankruptcy can only last for one year before you are discharged however the income payment order will be in place for three years.

Windfall

If you come into money during the course of your bankruptcy you will be required to pay this towards the official receiver. You will be allowed to keep any money which is leftover after the unsecured debt, along with bankruptcy fees and charges, have been repaid.

Is Bankruptcy the best debt solution for me?

If you are wondering if bankruptcy is the best debt solution for you then contact Debt Support Trust. We are a registered debt advice charity helping people with telephone and internet based debt advice. You can telephone Debt Support Trust on 0800 085 0226.

analyseyourdebt

Tuesday, July 24, 2012
Debt Support Trust
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OFT given more powers

The Office of Fair Trading (OFT) which governs the UK financial services market will be given additional powers from early in 2013.

The new powers supplied to the Office of Fair Trading will ensure they are able to act swiftly in detecting and stopping unregulated or rule breaking consumer credit licence holders.

These new powers have been granted to the OFT as fury grows from the general public and consumer groups that people are poorly protected from greedy and often financially damaging companies.

The present situation

Currently the OFT has the power to retract an organisations consumer credit licence however should a company decide to appeal the decision they are allowed to continue trading for up to two years while the investigation is completed.

The change in the law will help ensure unethical debt management companies and rogue payday loan organisations are closely monitored and stripped of their licence quicker. This ensures vulnerable consumers are protected.

However, the new regulations don't simply stop at payday loan and debt management firms, they will encompass all organisations requiring a consumer credit licence to trade. This will include organisations who lend credit as well as those providing debt collection or debt advice services.

Yes Loans

The credit lending organisation Yes Loans was up until March 2012 offering credit under their consumer credit licence. However, this licence has been suspended following claims the company were charging people up to £70 to apply for credit, which has been revealed they would never be able to obtain.

The company encouraged customers to borrow expensive short term loans instead of the products they originally asked for. Yes Loans also led consumers to believe they were providing the loans directly, whereas they were actually an intermediary.

A step in the right direction

This move is a step in the right direction in the fight to protect consumers.

Consumer Affairs Minister, Norman Lamb said "This move will put a stop to those companies who exploit vulnerable consumers whilst dragging matters through a slow legal process.

It will also give a boost to legitimate businesses, with the swift suspension of unscrupulous traders."

At Debt Support Trust our charity debt advice is provided on an upfront and honest basis. Our role is to ensure you are fully aware of the debt advice options you have and provide you with any support you require. Our trained and friendly team can be telephoned on 0800 085 0226 or you can complete a debt analyser to obtain online debt advice.

Monday, July 23, 2012
Debt Support Trust
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Bankruptcy: Can I Go to Jail?

A common misunderstanding is that somebody can go to jail for not repaying their debt. This is not true. You will never be sent to prison for failing to pay your debt.

99.9% of people contacting Debt Support Trust will have borrowed money and experienced a change of circumstances (loss of employment, marital breakdown etc) or over committed themselves on credit, over a long period of time.

Going to Jail for Debt

There are times when you can be sent to jail and it's because of a matter surrounding your debt. For instance, if you fraudulently obtain credit you are breaking the law and could be sentenced to jail for fraud, but not for the debt. If you spend lots of money quickly and have no intention of repaying the debt then a judge can decide that this is fraud.

You can be sentenced to prison for ignoring the rules which surround bankruptcy. This can be as simple as refusing to let the Official Receiver in bankruptcy know about all of your assets or trying to set up another company.

Recently in the press a man was sentenced to nine months in prison because he set up a new company and spent thousands of pounds on personal items when it should have gone into his bankruptcy. This deliberate decision to ignore the bankruptcy rules meant he was breaking a court order. If you decide to enter bankruptcy it's essential you follow the Official Receiver's demands.

Other common misconceptions about Bankruptcy

There are a few common misconceptions about bankruptcy which confuse people. Some of these are:

  1. You will only lose your property in bankruptcy if there is equity available for the creditors. For instance if the secured debt on the property is £120,000 and the property is worth £100,000 then the property is in negative equity. You must still maintain payments to your mortgage whilst in bankruptcy or you will lose your home.
  2. Bankruptcy lasts for 1 year but if you are in employment you will likely have to make a contribution towards your bankruptcy for 3 years. This is called an Income Payment Order. The amount of the Income Payment Order is decided by your court appointed Official Receiver.
  3. You have to pay to go bankrupt. As at today's date, the cost to enter bankruptcy is £700. If your debt is below £15,000 and you meet the rest of the criteria you could enter a Debt Relief Order which is £90.
  4. You can never get credit again. People who exit bankruptcy will experience difficulty in applying for credit but your credit file can be repaired over time. The trick is to borrow money carefully and repay it in full and on time, every time.
Friday, July 20, 2012
Debt Support Trust
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Debt through a child's eyes

Last week at the debt advice charity we were working with a local community group to discuss debt, budgeting and share experiences of financial hardship. On Monday we received an email from a girl who attended the event with her mother. The story provides an insight into how children begin to understand the concept of money and we found it fascinatingly honest and worth sharing on our blog.

The family agreed to share the story, however we have changed the girl's name.

My Life with Money

My name is Lynn and I am 12 years old. Every week my gran gives me £5 pocket money and I always try to save it, but somehow manage to spend it. Whether I spend it on clothes or makeup or shoes etc.. I always do spend it!

When I was little I wouldn't say I didn't get much, although I did and my parents had great jobs and could always provide food and everything for me and my sister, we also got a lot of treats. Maybe not as soon as I was born, but by the time I was 5 my mum had her own business and my dad had a very stable job and still does today. When I was little I didn't really worry that much about money, I didn't really need to, that's what the older people did. To be fair I didn't really know about money, I didn't understand that to get a new toy mum and dad had to work, I didn't understand the fact that you had to buy food and toys and clothes. My parents didn't really care, obviously I didn't get everything, but I got a few treats here and there. It was always equal between my sister and me, although it didn't seem that way because of the 5 year age gap, but it was always fair.

My sister is 5 years older than me and when she started secondary school she got the chance to go to France and I always felt it unfair as she's allowed and I'm not, but now I am at the secondary I had the privilege to go on the France trip the same as she went.

As I grew older I began to understand the concept of money but still not really the fact of working and would ask mum for money and not really think, or understand, the effort that has been put in to earning it. I still wouldn't class myself as the smartest with money, maybe I don't put it to the best of its ability and I could save it up, but I can't keep money I always feel the need to spend it as soon as I get it.

When I was eight my mum and dad announced to me and my sister that we were moving out of our small semi detached house and into a large 3 floor house with a lot more rooms and space to do what you like in, at first we didn't really like the fact of moving, leaving our friends and where we grew up, it felt like a massive distance between the houses but they were only 10 minutes apart.

My whole life we had pets, hamsters, dogs, budgies, fish, rabbits etc.. When I was younger I didn't realize that food, cages, toys and everything all added up to a lot of money but I understand now. We still do have pets just I think about the cost more.

Growing up my parents always had fancy cars but when i was nine the credit crunch started and everything started to change. We had lived in our new house for about a year and my mum was driving an Audi and everything was great, school, friends, work. My mum's work had moved to a better place. But when the credit crunch advanced and became more outstanding everything started to change, we had to sell the car, and we stopped getting as much, even the amount of groceries we bought decreased. The quality of things, all the little things was changing, the toilet paper, the soap, the lemonade, the oranges, but i didn't really care, to be fair I didn't really notice. We used to always go on holiday and the best holiday we could get was a small caravan holiday. After a while my mum's business started going down and she was acting strange. My sister's boyfriend would always fly up from London and even going to the airport she would panic and hide. After about 6 months the business went bust and my mum was out of work. My dad was fine and he has always had the same job, but he worked a lot more after my mum's business went bust so we could pay the bills and everything. Around Christmas time I would hardly see my dad for the amount of time he was working, I got to see my mum because she didn't have a job which was great because she used to work full time. My mum is now back working again.

My parents try their hardest to treat my sister and I but we do understand the fact that now everything has changed and we can't get everything. Me and my sister are both very unique for the fact we don't follow the crowds, not only are we unique our parents are too, if our parents didn't work so hard we wouldn't have a good story to tell. Also, most importantly we wouldn't be here today.

Advice

Debt and money advice is available over the telephone and internet from Debt Support Trust while face to face advice is free from the Citizens Advice Bureau.

Tuesday, July 10, 2012
Debt Support Trust
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