We live in a time when it can be difficult to decipher between what is real and what is fake, whether it’s mainstream news, social media posts or debt advice adverts. We, like many other people, read the false promises being promoted on social media and want to offer some clarity.
When it comes to dealing with debt – which is a sensitive subject – reliability and accuracy are paramount. However, some adverts claim to offer solutions which seem too good to be true.
So, we’ve had a discussion and listed the top adverts we’ve seen which make bold and often unlikely claims about resolving debt problems.
Common False Advertising Claims
“Write off up between 80% – 95% of your debt” – This is an extremely misleading statement because while there are debt solutions which allow people to repay an affordable monthly repayment towards their debts, with the potential of a percentage of their debt being written off at the end of the solution, the amount isn’t fixed. An IVA ( in England, Wales & Northern Ireland) or a Protected Trust Deed (in Scotland), allow for you to pay an affordable contribution towards your debt on a monthly basis. Often you’ll only repay a percentage of your debt, however until a person has completed either debt solution there is no way to know if there will be any debt write off. The reason for this is, if during the period of time you’re in the solution and your circumstances change then it’s possible you would repay the full amount of debt plus fees for the solution. As an example, if you inherit money or won the lottery during the term of either debt solution then you would be asked to pay this money into the estate for the benefit of your creditors.
“Be Debt Free In X Number of Years” – Until a person has spoken to a debt adviser there is no way of knowing when they will be debt free. Someone may have assets which they could sell to clear their debt within a very short period of time, while others may need a solution which will last 6 years or longer. There’s never a one solution fits all answer to personal debt problems. Consequently, advice is required and a statement of affairs collated to estimate when a person will be debt free again.
“Buy Your Debt For £1” – This is consider to be more of a scam, rather than simply misleading and it is something to be very wary of. Ads will claim you can pay just £1 and they will purcahse the debt, however despite a person often paying far more than just the £1, they will still be liable for the debt.
“Consolidate Your Debts” – Some adverts claim a company will consolidate all their debts and they can make one monthly payment. Often what happens is you pay one company your monthly payment, typically in a debt management plan, and they disperse the funds on a pro-rata basis. The debts don’t get consolidated like a loan, but the company will liaise between you and the creditors. If you leave the plan each creditor will still be owed their outstanding share of the debt. If you believe a debt management plan is the correct debt solution then there are organisations offering free debt management plans so you don’t have to pay any fees from your monthly payments.
“Write off Secured Debt” – This is just simply not true. Secured debts cannot be written off or included in a debt repayment solution. If a person sells or has the secured asset (i.e a property, car etc) repossessed and there is a shortfall or balance remaining then the debt would typically become unsecured and could be suitable for a debt solution at that stage.
These are just some of the many false claims that can be found and by no means the full list.
If You’re Unsure We Can Help
If you’ve seen an advert which sounds too good to be true then why not ask us for a second opinion? Even if you’ve entered a solution we can still offer helpful advice and support. You can speak to one of our friendly team on 0800 085 0226.
By speaking to a register and regulated debt advice organisation such as Debt Support Trust or a local Citizens Advice Bureau, a full financial assessment of your circumstances will be taken before making any claims about how to deal with your debt.
If you would like the facts not the fiction to solve your debt problem, give us a call on 0800 085 0226.
Recent statistics have confirmed that the UK Inflation rate has fallen to its lowest level for 2 years. Low inflation suggests the cost of living is lower for the things we buy. Statistics show that employment has risen too.
So, what does this all mean? Well, it suggests that more people are in employment and the cost of living has become more affordable so more people may feel we have extra money in our pockets.
The Office for National Statistics revealed the drop was largely due to energy bills and fuel falling.
Mike Hardie, ONS head of inflation, said: “The fall in inflation is due mainly to cheaper gas, electricity and petrol, partly offset by rising ferry ticket prices and air fares falling more slowly than this time last year.”
If you have debt worries, then it could be the best time to seek debt advice. You can speak to a debt advisor at Debt Support Trust on 0800 085 0226.
Unemployment Rate Falls To 2.5%
The unemployment rate fell to 4.0% – a joint 43 year low – with 32.53 million people in work across the UK.
As inflation falls and employment rises it should, at least in theory, help people struggling to afford their month to month living costs. However, for many people a small cost saving may not be enough to pay the essential bills and also contractual debt obligations. If you feel your monthly repayments to debts are too difficult and you don’t have enough money for essential living costs each month, then why not have a confidential conversation with our debt advisors?
Our debt advice team assess your income, expenditure, assets and liabilities alongside your debts. We can then make recommendations on how to improve your finances. We can recommend adjustments where your expenditure is too large or alternatively suggest a debt solution. If we recommend a debt solution we will explore all options and consider the pros and cons of each route forward.
Insolvency Rates Rising
At the end of last month it was revealed personal insolvency figures in England and Wales rose to a 7 year high of 115,229, a 16.2% rise from 2017. Insolvency debt solutions, such as bankruptcy and IVA’s both rose during 2018, however there was a much greater increase in people entering the latter.
There was a 9.8% rise in the number of people entering bankruptcy, however there was a 19.9% rise in those entering an IVA.
An IVA allows people struggling with their debts to repay an affordable contribution each month towards their debt, typically for 5 years. There are other solutions available too, such as a Protected Trust Deed or DAS in Scotland or a debt management plan. To determine the correct solutions we look at a person’s financial and personal situation, before explaining the relevant solutions in detail.
Get Debt Help
If you’re struggling with debt and find making your monthly contractual payments to your debts difficult, then you can get confidential and supportive advice from Debt Support Trust. You are under no obligation to proceed with our advice, but sometimes just sharing your concerns and worries can help.
You can speak to a friendly adviser at Debt Support Trust on 0800 085 0226 or complete our online debt test for a suggested answer to your debts.
Your credit report summarises your financial position and is used by lenders to check your rating to determine if they are willing to lend to you. However, for many people in debt, checking a credit file is a daunting experience.
It’s not uncommon to be worried about your credit score, especially if you’ve missed, or not been able to make your contractual payments towards debts. However, a credit report can be valuable for understanding just how much debt you have.
Credit Referencing Agencies
There are four main credit referencing agencies – Experian, Equifax, Crediva and TransUnion (formerly Call Credit).
The role of the credit referencing agency is to provide a lender with a review of your financial history and creditworthiness. Once the lender has your credit report they will make a decision on whether they are willing to lend to you. A credit report can be carried out for various types of lending, such as mobile phone contracts, credit cards or a car loan.
Your credit score will quickly highlight whether you have a poor, average or excellent credit rating group. The maximum number (the best) can vary depending on the credit referencing agency. For our advice team to determine the most applicable debt solutions it’s ideal to know how much unsecured debt you have, to which companies and what secured lending you have outstanding. If you’ve not been opening your creditor statements for fear of the debt, then your credit report can often give you a guide as to how much debt you currently have. This can help in determining which debt solutions you may be applicable for.
Free Credit Reports
There are resources and companies that offer free credit reports. Our favourite is Noddle from TransUnion. It’s free for life and offers you your credit rating and score, lists credit you already have, whether you’re on the electoral register, details of people you’re financially linked to and searches which have been conducted over the past two years.
Noddle is excellent because it’s free, however it only covers your credit report with TransUnion / Call Credit. Check My File offers a free 30 day trial and shows you data from all four credit referencing agencies.
We’ve tried both companies and Noddle is certainly our favourite, however, Check My File is useful if there’s a debt or two missing or you want a more comprehensive report. If you do decide to open a Check My File account and don’t wish to pay for it in the future, you will need to cancel your account. The cost is £14.99 per month if you don’t cancel.
If you would like help or advice on your credit file you can speak to Debt Support Trust on 0800 085 0226.
We regularly hear from people who have recently found out their friend or family member is in debt. At Debt Support Trust, we don’t only assist people with money issues, but friends and family who are worried about their loved ones. For most people, being in debt or knowing someone in debt is a difficult process; you have limited knowledge of the options available, it can be frightening and you may be unsure of the solutions which can help.
It’s important to remember that there are debt solutions available and options which can help alleviate money worries. Whether the debt is an unexpected bill or multiple debts accrued over a longer period of time, there are solutions which can be explored. Together, we’ll help you understand the pros and cons of each solution so that you or a friend/ family member can receive the information you need.
While many people still believe debt problems only occur because of frivolous spending, it’s not the case and in many instances the debt has arisen because of a change in circumstances. For instance, a reduction of income because of a new job/ loss of hours at work, separation / divorce or the cost of living increasing resulting in an over-reliance on credit.
If you would like to speak to a debt advisor from Debt Support Trust, please call 0800 085 0226. Any conversation is confidential and we will not contact your friend or family member without their permission. We can offer you guidance and support to be able to best help a person struggling with debt.
Top Tips to Help People In Debt
There are a number of things you can do to help a person in debt. We’ve listed our top tips below:
- Supportive – The first tip we can offer is to offer support. It may have come as a shock to you and you may initially panic and worry, however by being supportive you’re encouraging a person in debt to take the necessary action to become debt free. Remember, your friend or family member will have been dealing with this debt for some time before you found out, so they may simply just need somebody to listen and reassure them. Support them in taking steps to regain control of their finances.
- Positive – Reassurance is important for anyone in debt. Positivity breeds positivity so by saying “It’s OK, there will be options” or “don’t worry, we can get this sorted” you’re offering positive reassurance that things will improve. That often gives a person the courage to speak to a debt advice charity and seek help.
- Be Helpful – Offering emotional support is important but factual information can be useful too. Why not sit down and help complete a statement of affairs? We can help you with this. You want to list the monthly income, expenditure, amount of debt and monthly contractual repayments as well as finding out if there are any assets. This will help clarify the financial position for the person in debt and help them to see ways they could save money or whether they need debt advice from a registered charity.
- A Problem Shared – Many people struggle to tell anyone about their debt problem, never mind their family or friends. Often when people call the Debt Support Trust charity helpline the feelings of guilt, anxiety and overwhelming pressure are evident. Through years of experience we know that anybody could find themselves in debt and that what’s most important is supporting and empowering a person with money worries to be able to take back financial control. Understanding the journey a person in debt has taken to tell you about their financial situation is vital to being able to support them.
- Guidance – Offering guidance can be invaluable to a person worrying about debt. For instance, you could agree to meet them to open their mail and collate creditor statements, gather necessary information about the debts and even be there to help them whilst speaking to a debt advice charity. People in debt can sometimes feel alone – by offering guidance and clarity you’re helping them take positive steps to resolve the debt.
Try To Avoid
We’ve created a list of things you should try and avoid. These are often difficult because a debt problem can come as a shock, which you may be trying to process yourself. However, if possible, it’s best not to:
- Criticise – we often hear from parents, siblings and friends who are worried about someone in debt, where they’ll say a phrase such as “I don’t know how they could be so stupid”. While it’s not uncommon to think debt arises from overspending, it’s not always the case and it’s typically a problem which will have occurred over a number of years.
- Ignore the problem – encouraging someone to deal with their debt will ensure they’re taking steps to be debt free. By continuing to ignore the problem, it will make the issue harder for your friend or family member to take the steps they need to make to get the debt under control.
- Take too much control – from time to time we speak to people who want to over-manage a person who has debt problems. This can include taking control of their bank account and liaising with creditors on their behalf. While this can be helpful at the initial stage, it’s important to empower a person with debt worries to take control themselves. Try to act as a support but not take overall control to resolve the problem.
A Little Extra Support
Debt and money problems can occur for anybody – whether it’s a celebrity worth £20 million or a retired pensioner who is struggling to pay an energy debt. The reason for debt is always the same; there isn’t enough money to pay the necessary expenditure and cover the repayments to debts from the income available.
However, you can be a positive support to a person in debt. If they’ve trusted you to tell you about their money worries, we’re here to help too. You can call us on 0800 085 0226 if you would like some advice or email us at firstname.lastname@example.org.
Often we speak to people who have been worrying about debt for a long time before they took the decision to get in touch with our debt advice charity. The typical person worries about their debt for a year before taking action and seeking advice.
It’s normal and understandable for people in debt to choose to hide letters away in a drawer, stop answering phone calls, avoid friends and family and feel isolated, but there are things you can do to help alleviate the stress from debt.
What To Do When Worrying About Debt
We frequently hear from people who tell us the fear of being in debt and being unable to manage debts are left them feeling powerless, afraid and worried for the future. It may seem like the only answer is to ignore the problem, but that in turn only heightens the anxiety and worry. This can lead to people being unable to sleep or function efficiently in daily life.
If debt is the first thing you think about in the morning and the last thing you think about before you go to sleep, then you’re not alone.
As frightening as it can be dealing with debt, it’s the best solution to resolve the worry and anxiety. Our top tips if you’re worried about debt, are to:
- Take a moment to just realise that debt impacts on a lot more people than you may realise. Debt is a problem, but that doesn’t mean there aren’t solutions to the problem. Often people have two or three different solutions which can help them become debt free again.
- Gather together your paperwork, find out how much debt you have and face it head on. This can often sound very easy, which it isn’t, but doing this means you’re in control again. This empowers you to know that you’re taking the necessary steps to get your debt problem rectified. You may find that you owe less than you thought or it may be that you owe more, but either way you will be in a far better position to find a solution to your debt problem.
- Don’t be afraid to talk to friends and family about your debt, it might just surprise you how many people you know who have been in the same position and you could gain strength in listening to how they dealt with it. Even if they haven’t been in debt, a problem shared is a problem halved.
- Complete an income and expenditure, this will tell you how much money you have left each month to pay towards the debt or it may highlight areas of spend which could be reduced.
- Call a debt advice organisation and let an adviser go through the various options and debt solutions that are available to you. In some cases a debt solution may not be require but it’s always best to find out the opinion of a debt advice expert. Again, just speaking to someone confidentially can unburden you. The people we help often comment the next day after speaking to an adviser that they “had the best sleep of their life” after speaking to our charity advice team for support.
You Can Be Debt Free
It may seem like your situation is unique and difficult, that no one will have an answer, but the truth is, you can be debt free.
By taking the brave step to face your debt problems head on, you can start to plan for your future again, one which isn’t dominated by fear of bills or creditor statements coming through your letter box.
If you would like to speak with someone about debt worries then please don’t hesitate to contact one of our friendly advisors on 0800 085 0226 or even complete our online debt test to check which options may be suitable for you.
The feeling of being in debt is horrible. It’s all consuming, often frightening and can leave you feeling isolated and vulnerable. The truth is that resolving debts and seeking debt advice can empower you to take a positive step financially and regain control, but how do you go about taking that first important step in the right direction?
We’re often told in confidence about a debt problem – an issue family, friends or work colleagues may not even know about. This is because typically it’s easier to speak to a friendly stranger than to discuss debt problems with your nearest family and friends. The feeling of debt can become so overwhelming that just talking about the debt can make the problem seem more manageable, particularly when speaking to experienced advisors who are friendly and understanding.
Life in debt can seem lonely, but by speaking to a debt advisor about your personal and financial situation, you’re actually taking the first step. You’re sharing the problem and allowing a trained and experienced advisor to identify options you may have to become debt free again.
Often there are multiple options to resolve your debts and in those situations, our role is to give you all of the positives and negatives to each debt solution so you’re empowered to make a decision about your financial future. For instance, you could be suitable for an IVA and also a debt management plan so it would be your decision over which one you felt was right for you.
You can speak to a friendly debt advisor from our debt advice charity on 0800 085 0226 between 8am – 7pm Monday to Friday.
Debt Quote – What People Say
To help reduce the stigma of debt and open up the conversation, we’re sharing some of the most common phrases we hear at our debt advice charity onto social media. These are phrases regularly said and reflect how people feel when seeking money advice.
From worrying about being in debt forever, through to losing assets like a house, debt can make anyone feel like their options are limited, which isn’t necessarily the reality. We hope our debt quotes can help you feel like you aren’t alone, that there is a light at the end of the tunnel and that there are solutions designed to help solve money worries.
We’re trusted to listen and understand debt problems and then provide helpful, pro-active advice. We’re there throughout the entire process and always in your corner. As such, our debt quotes deliberately don’t feature people’s names. These are phrases that explain just how debt makes many people feel.
If you would like to add your debt quote to explain how debt makes you feel, you can leave your quote in the comments section below.
Debt Help & Advice
If you’re ready to take the first step and seek debt advice we’re here to listen. We’ll advise you on all of your options and discuss how you could resolve difficult debt problems. You don’t have to follow any of our advice but it gives you the chance to talk through all of the options available.
If Debt Support Trust can help you today with debt and money worries, please call 0800 085 0226.
The FCA has announced credit card companies have until September 1st to implement new changes to the way they deal with people in debt, in a bid to protect consumers.
Following a study of 40,000 consumers by the Financial Conduct Authority, it is believed customers who are persistently in debt with credit card companies are paying an average of around £2.50 in charges & interest for every £1 they owe.
The new changes will mean credit card customers who are in persistent debt will have to be offered help to deal with their outstanding balance.
Credit Card Debt: When Is Help To Pay Offered?
The initial help should start when a customer has been in persistent debt for 18 months, with the credit card companies expected to offer the customer a warning about their financial situation and that they may have their card suspended.
Should a customer be in debt persistently for 36 months, the credit card companies will be required to offer an affordable repayment plan and possibly even reduce, waive or cancel any interest, fees or charges
Christopher Woolard, from the FCA, said
“Credit cards offer customers flexibility to manage their finances and repayments, but with this there is a risk customers can build up and hold debt over a long period of time, without making much headway on the outstanding balance,”
“Under these new rules firms will have to help customers to break the cycle of persistent debt and ensure customers who cannot afford to repay more quickly, are given help.”
The FCA has estimated consumers will save “between £310 million and £1.3 billion a year in lower interest charges”, thanks to the new changes being implemented.
Charity trustee of Debt Support Trust, Stuart Carmichael, welcomed the new changes and said:
“The problem with debt is that it’s like being stuck in a hole. You want to be debt free and live a life without overbearing financial concerns, but the repayments to climb back out of debt are too steep – the problem has become too severe and it’s almost impossible. Addressing the debt and helping consumers to repay what they owe in a manageable plan will mean fewer consumers are likely to turn to other forms of lending, which can often just make the situation worse.
If you have credit card debts and want advice on how to resolve them, you can speak to Debt Support Trust in confidence today on 0800 085 0226. A charity advisor can help you with all forms of lending and offer advice on which solutions may be best to get the debt back under control.
This week we helped someone at the charity with over £30,000 of credit card debt who was looking for tips to pay off her credit card debts fast. She recalled, “I can’t remember spending the money, but I certainly know it’s harder to repay the debt now I have it”. It’s always more difficult and time consuming to repay debt compared to spending the money at the time.
For some people the debt problem started, unknowingly, at a young age of between 18-21 and the debt issues continued from there. Regardless of how the debt was accrued there are always options to help become debt free once again and live a life without debt.
Credit Card Debt: The Debt Dilemma
When your unsecured debts, like credit cards, store cards and personal loans total more than your available disposable income, what options do you have available? You may not have enough money to pay your monthly bills and your contractual payments to debt, but there are debt solutions designed to help.
You can assess which debt solution could be right for you by completing the debt test and analysing your debt. You’ll receive an idea of which debt solution could be the most applicable, but you could have two or three different options, so it’s always best to speak to a debt advisor before proceeding with any debt solution.
Tips to Repay Credit Card Debt
There is some helpful advice we can offer to help you manage your credit card debt. Everybody’s situation and circumstances are different and unique, so what will be suitable for one person may not for another.
For instance, if you’re currently unemployed and unable to make your monthly contractual payments to your debt then it may take longer to become debt free. However, you can take control of your financial future by proactively speaking to your creditors and asking for a period of grace until things improve. Your creditors will likely offer you to make token payments to your debts – this is where you pay a set amount each week / month towards the debt. It won’t be the contractual payment, but a more affordable amount. Your creditors could freeze interest and charges in the meantime so the debts don’t continue to grow.
Tip 1: Seek advice
There are multiple reasons we advise you to seek advice about debt problems, but the most important one is that it’s good to talk to someone else about the financial issues. “A problem shared is a problem halved” is very true!
The other reason is that a debt advisor could guide you through all of your options and help set you on the right path. If nothing else, you’ll receive all of your options – along with the positives and negatives – so you can make an informed decision.
Tip 2: Talk to your creditors
Your creditors may be able to offer you some financial assistance to make the process of repaying the debt easier. Your credit card company may be able to offer you a better rate or support you while you try to pay down your debts.
Tip 3: Budget
One of the best tools at our disposal is a budget. It helps demonstrate just how much money is available to pay towards debts each month. Your budget should include all incomes (earned income from employment, pensions, benefits etc) and expenditures (rent/ mortgage, food, gas/ electricity, council tax etc) for each month.
You will then be in a better position to understand how much you can afford to repay towards your debt each month. If your monthly contractual payments to debts are more than you can afford then a debt solution may be required.
If you fail to meet your monthly contractual payments to your debt then a default may be applied to your credit file, which can mean that future credit is more expensive or difficult to obtain.
Don’t Struggle Alone
Dealing with debt can be a difficult and frightening experience, but it doesn’t have to be. Support and advice is available from our debt charity. Our advisors are friendly and ready to help with confidential advice.
You can call us on 0800 085 0226 between Monday – Friday 8am to 7pm. Alternatively, you can try our online debt test.
We know that debt problems occur for various reasons and that struggling to deal with complex debts can lead to increased levels of stress, issues at work and trouble maintaining relationships.
In a recent conversation with BadCredit.org we discussed how our charity has been helping people with money worries and what options exist.
The number of British people living in poverty has reached a 20 year peak, with more people 14 million people struggling to make ends meet. Rising inflation and the cost of living certainly haven’t helped, with only yesterday the cost of rail fares being increased by, on average, over 3%. Many Brits are also finding that their rate of pay hasn’t increased in line with the cost of living, which has resulted in their essential expenditures rising faster than their earnings.
With less money available to pay creditors, it can often lead people to seek debt and money advice.
How Do We Help?
As discussed in our recent article with BadCredit.org, from the very first phone call we offer a sympathetic, non-judgemental ear. Our primary focus is to understand your personal and financial situation and consider which debt solutions would help you to achieve your objectives of once again becoming debt free.
We’ve helped thousands of people out of debt and usually there are two or three options available. When this happens we’ll explain the positives and negatives of each option so that you’re informed and empowered to make a decision on your financial future.
If you would like debt advice, please contact us on 0800 085 0226 where a trained and friendly advisor will be able to help.
You can read more about our service and our interview with BadCredit.org here.
Our debt advice team will be taking a well earned break over the festive period and as such our advice centre will be closed.
We’ve listed our opening hours below should you wish to get in touch.
Festive opening hours
Our opening hours between Christmas and New Year will be
Friday 22nd December – 8am – 12pm
Saturday 23rd – Tuesday 26th December – Closed
Wedneday 27th, Thursday 28th and Friday 29th December – 10am – 4pm
Saturday 30th – Tuesday 2nd January – Closed
We will return to normal support hours from Wednesday 3rd January where we will be open 8am to 7pm.
You can still use our website for information on debt and try our debt analyser which will give you a guide to which debt solutions you may be suitable for.
We wish you a very Merry Christmas and a happy New Year.