How to Get Out Of Debt

Being in debt is one of life’s biggest pressures, and it can be difficult for anyone to deal with. Fortunately, there are solutions and companies out there that want to help if the problem has become very serious, and you’re struggling to pay back the money you owe. It’s much better to get help; ignoring the problem won’t make it go away.

Harassment from your creditors and even debt collection agencies can be one of the most stressful aspects of being in debt. It can be letters, emails, phone calls or even home visits. One of the main aims of helpful debt management companies is to end this constant stream, to the point that creditors will only contact you when absolutely necessary. This is one of the first things that will happen when you decide to consolidate your debt, and it gives you some essential breathing space to begin resolving the problem.

Using a debt management company is actually quite simple, and it’s easy to get started. You supply them with all the information that they need, and they’ll work with you to decide how much you can afford to pay to whoever you owe. They then inform your creditors that they’ll be working for you, and will give them offers as to the amount you can pay back. In many cases, debt management companies can reduce the interest on your outstanding debt. You then pay the debt management company a set amount every month in order to settle the debt, and they deal with creditors. A fee for the service will be included in this payment, and there may be initial charges too.

There are some important considerations to make when you decide to use the services of a debt management company. The first is that defaulting upon any of your original credit agreements can have a negative effect on your credit rating. This will often happen when using a debt management. Fortunately, you will be working on getting out of debt, not buying credit products, so you aren’t likely to have a credit report in the near future. It’s also far better for your future credit profile than getting an IVA or declaring bankruptcy.

The second important point is that debt management is generally an informal agreement, which is to say there is no set contract between you and the management company. Creditors are by no means guaranteed to accept any offers from debt management companies, nor are they required to stop contacting you. In most cases however, the company helping you will be successful in reducing overall payments.

Fresh Start UK Debt Management Limited (http://www.freshstartltd.co.uk) is a dedicated debt management company which places excellent service at the top of their agenda. Not only this, but they offer some extra services which many other companies do not; if you’re self-employed or have crown debts, then they might be the ideal company for you to use.

Remember, you don’t have to suffer in silence; get help and get out of debt.

UK retailer JD Sports offloads rugby brand Canterbury in debt-only deal

British sports and fashion retailer JD Sports Fashion Plc (LON:JD) said on Thursday it had agreed to sell New Zealand-based rugby brand owner Canterbury Ltd to JD’s majority shareholder Pentland Group Plc for about GBP22.7m (USD36.1m/EUR28.7m).

As part of the deal, Pentland will pay a nominal price of GBP1.00 for Canterbury’s shares while the balance will cover the business’ debt. The transaction is pending stockholder clearance.

JD has decided to sell this business as it wants to pay more attention to its retail activities, as only a small portion of Canterbury’s products are presently sold via the group’s retail fascias. In addition, most of the business’ revenue and earnings are generated in New Zealand and Australia, where JD has limited operations. The company intends to use the sale proceeds to support further investment in its core retail activities and for working capital purposes.

In a separate transaction, JD will purchase the ONETrueSaxon brand from Pentland for GBP50,000 as part of its strategy to buy intellectual property assets that could support its core retail proposition.

Canterbury was founded in New Zealand in 1904 with the aim of producing rugby jerseys and was acquired by JD in August 2009. For the 52 weeks to 28 January 2012, the business recorded a consolidated operating profit of GBP400,000 and pre-tax loss of GBP1.1m. At the same date it had gross assets of GBP32.6m.

Necessary Family Income Risen 16% Above Inflation

Since the beginning of the recession the earnings the average family needs to maintain a minimum lifestyle has risen 16% above inflation, claims a recent report. The research, recently published by the Joseph Rowntree Foundation, shows that families need more money than ever to maintain a socially acceptable standard of living.

The report – which is an update on the foundation’s 2008 report – was conducted by interviewing hundreds of people in the UK about their finances and what they consider necessary expenses. A Large part of the inflation-busting increase, it was found, came from the rising costs of transport, utility bills and childcare. Findings suggest that whilst most are aware that times are tough and costs were rising the real-term income of many working families was falling, in many cases due to tax credit cuts.

It also found that whereas a single person now required a gross income of £16,400 per year to meet their minimum expectations, a family of two adults and two children required an income of £36,800 per year (before tax).

What was interesting is that despite the growing hardship people are facing, their expectations have not fundamentally changed since the last report was carried out in 2008.

People in urban areas (excluding London) still considered a car as an essential item, whereas a computer and the internet are now accepted as a necessity for those of working age with children. People’s expectations had fallen in relation to eating out and what constituted an acceptable budget for Christmas and birthday presents.

Most still found that a one week holiday was a necessity, although most accepted that break did not have to be abroad and for those with children a one week self-catering holiday in a resort like Haven or Butlins would be sufficient.

It is clear that whilst the financial situation for many families is difficult, attitudes towards what constitutes as a ‘necessity’ are also changing in line with many aspects of modern life.

This post was brought to you by Your Debt Expert.com, a debt management company based in Glasgow, Scotland. They specialise in providing debt solutions for people in employment, offering a wide range of products and services as well as free confidential advice.

UK home repossession levels stable in first quarter, CML reports

Home repossessions in the UK in the first quarter of 2012 amounted to 9,600, the same as in the first quarter of 2011, the Council of Mortgage Lenders (CML) reported today.

This puts a stop to the recent trend of year-on-year increases in repossessions, although the CML noted that such stability could be disrupted by continuing pressures on household finances, changes to welfare benefits and rising mortgage rates.

Repossessions in this year’s first quarter were higher than the 8,700 registered in the fourth quarter of 2011, but this is said to reflect normal seasonal patterns.

Previously the CML has forecast that repossessions in 2012 will number around 45,000 but the organisation now believes that this figure may be revised down when its updated housing market forecasts are published later in the year.

Seeking to reassure people who are having trouble meeting their mortgage payments, Paul Smee, CML director general, said that repossession is a last resort for lenders and the number of repossessions remains relatively low. “Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as this is a realistic prospect,” he added.

A separate report released today by the CML on the buy-to-let sector reveals that the number of buy-to-let mortgages in arrears fell slightly in the first quarter of 2012, and the arrears rate on buy-to-let mortgages continues to be lower than in the owner-occupied sector.

Conversely, the buy-to-let repossession rate is higher than in the owner-occupier sector, where the focus is on trying to keep home-owners in their homes. The repossession rate on buy-to-let properties has remained virtually unchanged for more than a year, standing at 0.12% in the first quarter of this year, compared with 0.08% in the owner-occupied sector.

70% of Britons Have Debt Problems, Say Co-Op

Statistics have shown that 70% of Britons have experienced a debt or financial problem. This was shown by research conducted by the Co-Operative Bank.

If you have ever found yourself in a financial mess, more debts than money to pay them, struggling to repaying a loan, or had a collector phone you to ask why you haven’t paid, or worse yet, had a vehicle repossessed, or even worse a property repossessed or bailiffs sent out to your home??

If you have not, then you probably know someone who has, even if they have not disclosed this to you.

Here are a few more stats you may find interesting (based on 4th Quarter 2011 trends):

  • 318 people are declared insolvent or bankrupt every day.
  • 1,473 CCJ’s or County Court Judgments are issued everyday.
  • 93 properties were repossessed everyday.
  • Average household debt in the UK, not counting mortgages is £7,975.

So each of us on average, owes almost £8K in debt.

And many of us, for many reasons, struggle to repay these debts/loans.  We may struggle due to losing our jobs, or it may be through poor money management, or simply being overextended by living beyond our means.

There is a whole business, industry to help you do this.

There are companies and charities set-up, founded, bringing in profits, hiring people, creating jobs, etc, all to help people get out of debt.

This all makes up the debt industry.  An industry and business, just to help people who are in debt.

Many years ago being in debt was not only stressful due to owing money, but it also was a crime.

We all have probably heard about debtor’s prisons, where if you were insolvent or could not pay your debts, you were tossed into prison for a period of time to learn the errors of your ways.

This really makes no sense as while you are imprisoned there is no way you would ever be able to repay anyone.

But that is what they would do.

The Marshalsea prison from the 1300’s until the 1800’s it housed men who had committed or should I say were accused, of various crimes, including London’s debtors.

Supposedly in the mid 1600’s there were 10,000 people imprisoned for being in debt.

Later in the 1700’s, hanging was introduced for finding oneself in debt.

Then in 1869 a Bankruptcy Act was passed which abolished debtor’s prisons and going to prison for being in debt.

And lastly we have the Insolvency Act of 1986.

And so a whole new business or industry was born.

Currently there are hundreds of debt management companies/agencies out there, all wanting your debt business.

Jon from debtmanagement.co.uk who has been in assisting people with financial difficulties both in American and In the UK for the past 18 years has seen many changes over that time. “ What I am currently seeing is people who are struggling financially due to the rising cost of just getting up to live each day.  Petrol and home heating fuel, food, electricity have risen so much that people who previously could service the debt they had, now need the money for the debt payments, just to cover the basics of life.”

So what are your options if in debt and struggling and looking for help with a company in the “helping those in debt” business?  Let’s look at them.

  • Token Payment Arrangement:  This is where you make ‘token payments’ to your creditors each month of £1 or £5 to each account.
  • Debt Management Plan:  A DMP, is an informal arrangement similar to a token payment plan in that you make payments each month of what you can afford towards the debts, but these payments are a higher amount than just a few quid each month.
  • IVA/Individual Voluntary Arrangement:  This is a formal arrangement between you and your creditors where you make payments of what you can afford each month, this is a formal arrangement.
  • Insolvency: Bankruptcy or a Debt Relief Order depending on your circumstance.

So as you can see, it is not just the banking and the lending industry that is big business, but also the not being able to repay those loans, and being in debt as well.

This article was written by Nick Zapolski of www.debtmanagement.co.uk

Where will you be next year?

It’s hard to predict the future, but the past is already set in stone – there for us to review whenever we want to. When you look back, it’s easy to see how your decisions worked out: you can see which ones you regret, which ones really paid off and which ones didn’t really make much of a difference.

With that in mind, says a press release from financial solutions company Think Money, a thorough review of the last 12 months can be an excellent planning tool when it comes to figuring out your financial approach for 2012.

There are many ways to do that. Some people use budget planners; others make a point of keeping receipts and invoices; still others take a ‘combination’ approach to reviewing their finances.

However you choose to look back at 2011’s financial decisions, the important thing is that you learn from them. If you see any indications that you could have handled your finances better last year, how can you apply that understanding to this year? How can you make sure you learn from any mistakes you’ve made, rather than running the risk of repeating them?

Turning to debt problems specifically, the press release stresses the importance of taking the right approach to budgeting and debt management. One thing that can help here is getting some professional debt advice. A debt adviser can help you go over your finances and suggest ways of tackling any issues you’re facing – and the sooner you face up to those issues and find out what guidance a professional can offer you, the less time your problems should have to turn into something worse.

Finally, some generic advice. Whatever situation someone’s in, setting up direct debits can be a good way to make sure payments are made on time, avoiding the late payment charges and possible damage to their credit rating which could otherwise ensue.

As for people who feel they’re comfortably in control of their finances, it helps to bear in mind that no-one knows what the future will bring. You may have spare money on a monthly basis today, but that could change, however unappealing that thought may be. One tried-and-tested way of preparing for the future is to put money aside whenever possible, creating a ‘safety net’ that could make all the difference if your finances take a turn for the worse further down the line.