Insolvencies in England and Wales continued to rise in the first quarter of 2010 according to new statistics from the insolvency service.

 

There were 35,682 individual insolvencies in the first three months of the year 17.9% higher that the 30,253 seen in the first quarter of 2009.

 

Bankruptcies actually fell by 10.7% compared with a year earlier, whist individual arrangement increased by 20.1% over this time.

 

The statistics clearly show that debt is still a big problem for many people despite improvements in the economy as a whole.

 

UK interest rates held at 0.5% record low  12/5/2010

The bank of England monetary policy committee kept interest at the record low of 0.5% today a decision which had been expected.
Experts are expecting no interest rises any time soon, and certainly not as the economy continues to recover.  The record low 0.5% rates will be kept on hold to boost the recovering UK economy.

 

Experts are predicting that interest rates will be kept low to compensate for the new government’s spending cuts, which cannot be avoided to tackle the budget deficit.

 

Unfortunately low interest rates don’t really help people already struggling with debt problems as they may have missed payments and incurred charges.

Nearly 5 million 'getting into debt to pay bills' 28/5/2010

Store Cards: 59% didn't know about interest on debt 18/5/2010

When MyVoucherCodes.co.uk asked people about the store cards they were carrying a full 59% of them said they hadn’t realised they be charges interest on the debt, but thought the card would simply let them defer payment, The Telegraph reports.

 

About 39% of people have a store card, according to the website: 62% of women and 34% of men.

 

However, the survey indicates that many people didn’t take out those cards under ideal circumstances.  While 59% said they were not aware that the cards would accrue interest 42% said they felt pressurised by shop staff into taking out- and a further 19% claimed they were actually tricked and didn’t realise what it was they were signing up to after being promised a discount if they took out a card.

 

Today while the average interest rate on credit cards stands at 18.8% the interest charged on a store card debt can be 29%.

 

Farhad Farhadi of My VoucherCodes.co.uk made the following comment ‘sales staff in shops often lead customers into a false sense of security by getting them to sign up to a card, which they say will give them discount on their spend.  The customer hears the word ‘discount’ and is automatically sold on the idea.

 

People should think carefully before signing anything as this is the sort of thing that can lead to a string of debts.  

 

Get professional advice about debts urge Insolvency Practioners 18/6/2010

Research commissioned by R3, the insolvency trade body, reveals that more than four in ten (44%) individuals who admit struggling to pay their debts have not sought advice because they do not believe that their problem is big enough to need help.

 

R3 President, Stephen Law commented:

 

It is worrying that individuals are not seeking professional advice at the first sigs of financial difficulty because they don’t think their problems are severe enough.  While it may be the case that these problems are resolved without help, there is a risk that they might snowball out of control.  Professional advice does not mean immediate bankruptcy.  Ir could simply result in advice on budgeting”.

 

R3 estimates that nearly 1 million people struggling with debt have not sought help, and the reseach found that close to 10%  of individuals were reluctant to seek advice because they ere afraid of being made bankrupt.

 

The findings show that the stigma of admitting to ddebt problems remains as more than one in ten (14%) have not sought help because they are worried about what people would think, with (11%) concerned about the effect it will have on their families.

 

It is vital that people who are struggling seek professional help as soon as possible. 

 

Holidaymakers 'will spend seven months paying back debt' 03/08/2010

Over two million holiday makers have turned to debt to pay for their holidays, according to insolvency body R3, and will spend an average of 7 months paying back.

 

The average borrowed comes to more than £1,000.

 

R3’s findings follow a number of similar reports which highlight the willingness of consumers to take on debt in order to fund holidays.

 

Frances Coulson, R3 Vice-President, said “That people are prepared to take on a substantial amount of debt for such a long period of time in order to afford a holiday is worrying, especially as these are still economical uncertain times.  Personal insolvency hit record levels in the first quarter of this year and looks set to rise- so we are urging people not to spend more than they earn”.

 

An expert R3 “ A lot of people who use debt to pay for holidays are perfectly capable of paying it back, but equally there will be many people who are less confident about their ability to repay.

 

“It’s essential that people only borrow as much as they can comfortably pay back, and have a back-up plan in the event of financial difficulties”. 

 

Credit card debt: good news and bad news 06/08/2010

There’s good news and bad news in the credit card market,moneysupermarket.com reports, with interest free-introductory periods lasting longer than ever, but interest rates climbing steadily.

 

For people carrying credit card debt, both of these factors are important when they are thinking about transferring that debt into a new card.

 

So they will be pleased to see the average interest free introductory period (among the top best balance transfer cards) reach a record 15.4 months.  Three years ago, in July 2007, the average length was just 12.8 months, so this is quite an increase.

 

On the other hand, the top 24 cards now come with an average rate of 17.32%  which isn’t such good news.

 

When it comes to purchase cards, the average interest-free period now stands at an impressive 12.2 months-again, a significant increase on the 10.8 months we saw back in July 2007.

 

“An interest-free balance transfer card or purchase card can be a great option for people with existing debt who need flexibility, or for those who have a big purchase coming up and need some extra time to pay it off” said Kevin Mountford, head of banking at the comparison site.

 

According to the latest ‘lending to Individuals’ figures from the Bank of England, Consumers took an additional £100m of credit card debt in the month of June.  This was lower than average of £200m in the previous six months.     

 

Four in Five people 'changed lifestyle to cut costs' 06/08/2010

More than four in five (81%) Brits have taken steps to reduce their outgoings as worries about the economy and personal debt continue, according to Santander.

 

The banking group’s survey found that over half (55%) of Britons now shop around to get the best deals on groceries, while just over one in four (27%) have switched to cheaper supermarkets.

 

28% of people have turned to second –hand items from eBay and charity shops instead of buying every thing new, and 12% have even started to grow their own vegetables  to save money.

 

An expert at R3 have said.  “one positive thing we can take from the economic downturn is that people have started to take much more care of their finances, and the survey highlights many of the ways are people are doing this.

 

“Budgeting well and looking around for the best prices are two of the most effective things people can do to help them afford to repay their debts, and to lesson the risk of debt problems in the future”.

 

Debt, Divorce and death' strain family finances 20/07/2010

An article in the Guardian highlights how the financial costs of the 3D’s debt divorce and death, can put enormous strain on families.

 

The article runs through several figures regarding the ‘3Ds’ highlighting how easy it is for families to find themselves in financial trouble if something major happens. For Example:

The paper then goes on to offer some advice about debt, and stresses that ‘prevention is the key’.

 

‘Budgeting is the tried and tested way of keeping on top of your outgoings’ the article continues. ‘but realistic about how much you need for essential items, and cut down on non essential expenses.’   

 

More than a third in debt would rather be dead 10/09/2010

In a survey of 1000 people in debt the charity Christians against poverty found that 33 per cent had seriously considered suicide with a further five percent already attempted to kill themselves as a way out.

 

Figures show 1,666 people are being made redundant each day and a home is repossessed on average every 14 minutes.  People in the UK now owe more than the country produces in a whole year.

 

Yet CAP says that issues like being in debt and losing your home still remain hard to talk about so feelings of isolation increase the suicide risk.

 

Now, in marking world suicide prevention day Friday September the 10, the charity is appealing for people to look for the signs of those struggling financially.

 

Chief executive Matt Barlow said typically, those desperate with debt will be hard to reach, avoiding the phone, leaving post unopened and afraid to open the door.

 

They may have got into debt through Job loss, poor health, funeral expenses, relationship breakdown or financial mismanagement.     

 

DEBT REDUCTION: TIPS TO GET RID OF HORRIFYING DEBT 23/09/2010

 Debt reduction is the key to all your debt problems. The current situation in every country is that people are getting into more and more debt situations. One issue that these people have to understand is that getting more money from somewhere else wouldn't help them clearing off their debts. You need to make strategies. Thinking about your debt problems?? You surely need reduction plans to come out of this disease. If you surely don't go for proper debt reduction schemes your financial future will be in hands of jeopardy. So here are some solutions:

*       OPT FOR EASY STRATEGIES

When the weight of debt is no more bearable, below are some strategies you can look forward to:

       1.      Credit cards are one thing that can be bringing your debts up to neck level. You should know that you have to pay interest rates of the bank whenever you use credit cards. Don't just go and buy anything without knowing its importance. Try your maximum to purchase with your money. If you can't then check the necessity of the thing to be bought. Just remove credit cards from your life for some time or you can contact credit card companies and check low interests schemes.

       2.      Go for proper Budget and just stick to it. Calculating your monthly expenditure is very important. Check all the items on the bills and think which ones are more necessary. For example, you can go for less budget services for car maintenance or internet. The lesser you pay in form of bills larger the debt amount is paid off.



*       GO FOR DEBT REDUCTION PLANNER

These planners help you consolidate your debt payment into one monthly payment that is affordable by you. All you have to do is just compile up all the debt money till then and submit it to them. They will create a unified file for you. The planner will understand all your problems and give you the solution accordingly. You may go for a planner service provided by your own bank.

You can even go for online debt settlement programs. These are similar to planner services. These programs can successfully eliminate bankruptcy. Basically once you provide them with your account details on toll free number, they contact the creditors and barter them for a settlement amount.

*       CUT MONTHLY PAYMENTS

If monthly payments are horrifying you just go for a sensible act and get enrolled in debt Management Company. These companies just take your time and list of creditors and work for your benefit. These charge minimal fees. For using this service you need to have a specific amount of debt at least $5000. They make settlements with the creditors and find the best alternative. Your income will be considered first.

So, now you can go for any measure well suited to you. Debt reduction is really important when nothing seems working.

Contributed by Debt Community Member.