Simple Debt Solutions

Remortgage – Some points to remember

Wed, 27 Feb 2008 10:34:55 +0000

Always shop around to find the best rates – you may find that it’s not always the bigger lenders that offer the best deals. And remember that remortgage offers change all the time so keep looking!
Some Internet sites and national newspapers often publish best “buy tables”of mortgages - these can be a useful information resource.

The disadvantages of remortgaging

Wed, 27 Feb 2008 10:31:58 +0000

When you remortgage, there is sometimes the temptation to release some of the equity from your home - especially if you are looking to consolidate some existing loans.

However it is important to remember that in doing so you are turning a short-term unsecured debt (credit cards are an example of unsecured debt) into a long-term secured debt (secured on your house) and if you get into problems in the future with mortgage repayments, your home could be at risk.

Why remortgage?

Wed, 27 Feb 2008 10:31:16 +0000

These days, most mortgages are fixed for a certain period of time. Typically this will be 2-3 years. When this fixed period comes to an end, mortgage holders will have to choose a new mortgage deal or their mortgage will automatically revert to the mortgage lender’s standard variable rate. This is usually considerably higher than any special deals on offer.

What is a remortgage?

Wed, 27 Feb 2008 10:31:20 +0000

When you choose to remortage your property, you are simply switching your mortgage to another deal and most usually another mortgage lender.
People choose to remortgage for lots of different reasons. Some of the most common are:

They are just looking for a better remortage interest rate that will reduce their monthly payments.
By remortaging they can consolidate any outstanding debt that they may have. This can make their budgeting easier although in the long term it can increase the amount of interest paid.
Remortaging allows people to release some capital in their property to fund home improvements or other large capital expenditure.

What happens to any debts incurred after I have been made bankrupt?

Thu, 07 Feb 2008 15:50:32 +0000

Bankruptcy deals with your debts at the date of the bankruptcy order. After that date you should manage your finances more carefully. If you incur new debts this could result in further bankruptcy order and prosecution if, when you incurred the debts, you did not disclose that you were bankrupt.

The above information is provided by The Insolvency Service and is also available at The Insolvency Service website

How long does bankruptcy last?

Thu, 07 Feb 2008 15:49:00 +0000

If you were made bankrupt on or after 1 April 2004 you will be automatically freed from bankruptcy (known as “discharged”) after a maximum of 12 months. This period may be shorter if the Official Receiver concludes his enquiries into your affairs and files a notice in court.

If you have been an undischarged bankrupt at any time during the 15 years before the current bankruptcy (unless the previous bankruptcy has been annulled) you will be discharged automatically on 1 April 2009. Or you may ask the court for a discharge 5 years after the date of the bankruptcy order, but the court may refuse or delay your discharge, or grant it conditionally on terms requiring you to make some payments out of your income. You will also become free from bankruptcy immediately if the court annuls (cancels) the bankruptcy order; this would normally happen when your debts and the fees and expenses of the bankruptcy proceedings have been paid in full or the bankruptcy order should not have been made. On the other hand, if you have not carried out your duties under the bankruptcy proceedings, the Official Receiver may apply to the court for your discharge to be postponed. If the court agrees, your bankruptcy will only end when the suspension has been lifted and the time remaining on your bankruptcy period has run.

How will bankruptcy affect me?

Thu, 07 Feb 2008 15:48:21 +0000

a. In relation to your creditors

If you are made bankrupt, you must not make payments direct to creditors. Creditors to whom you owe money when you are made bankrupt make a claim to your trustee (that is, either the Official Receiver or an insolvency practitioner). They should not ask you directly for payment; if you receive any requests, pass them immediately to your trustee to deal with and tell the creditor that you are bankrupt. There are some very limited exceptions to this non-payment rule. The main ones are:

secured creditors, such as creditors who have a mortgage or charge on your home Note: If mortgage payments are not made, the lender may sell your home.
non-provable debts, such as court fines and other obligations arising under an order made in family proceedings or under a maintenance assessment made under the Child Support Act 1991. Non-provable debts are not included in the bankruptcy proceedings and you are until responsible for paying off such debts
benefit overpayments, where the Department for Work and Pensions (DWP) can recover any benefit overpayments from any further benefits you receive
Student loans, since 1 September 2004 all outstanding student loans cannot be claimed in bankruptcy. They remain the responsibility of the (former) student to repay within the terms of the loan arrangement.
If you were made bankrupt before 1 September 2004 you may until have to repay your student loan. Clarification should be requested from the Official Receiver who is dealing with your affairs. Suppliers of services to your home (gas, electricity, water and telephone) may not demand from you payment of bills in your name which are unpaid at the date of the bankruptcy order. But they may ask you for a deposit towards payment for further supplies or could arrange for the accounts to be transferred into the name of your spouse or partner. You must pay continuing commitments such as rent (if you rent your home), together with any debts you incur after the bankruptcy.
b. Payment to creditors

The Official Receiver will tell your creditors that you are bankrupt. He or she may either act as the trustee or may arrange a meeting of creditors for them to choose an insolvency practitioner to be the trustee. This happens if you appear to have significant assets. You may have to go to this (or any other) meeting of your creditors.

The trustee will tell the creditors how much money will be shared out in the bankruptcy. Creditors then have to make their formal claims. The costs of the bankruptcy proceedings are paid first from the money that is available. The costs include fees that the Official Receiver or the insolvency practitioner charge for administering your case.

At least part of the claims from your employees (if any) may be preferential and are paid next, along with any other preferential debts. Finally, other creditors are paid, together with interest on all debts, as far as there are funds available from the sale of your assets. If there is a surplus, it will be returned to you. You would then be able to apply to the court to have your bankruptcy ‘annulled’ (cancelled).

When your trustee makes a payment to your creditors, he may place an advertisement about your bankruptcy in a newspaper asking creditors to submit their claims. Depending on how long it takes your trustee to deal with your assets, this advertisement may appear several years after the bankruptcy order.

c. Your assets

You will no longer control your assets. You can keep the following items unless their individual value is more than the cost of a reasonable replacement:

tools, books, vehicles and other items of equipment which you need to use personally in your employment, business or vocation
clothing, bedding, furniture, household equipment and other basic items you and your family need in the home.
All these items must be disclosed to the Official Receiver who will then decide whether you can keep them. The Official Receiver/trustee will take control of all your other assets on the making of the bankruptcy order. He or she, or any insolvency practitioner who is appointed as trustee, will dispose of them and use the money to pay the fees, costs and expenses of the bankruptcy and then your creditors. If appointed, the insolvency practioner’s fees for acting a trustee are also paid from the money raised by selling your assets. The trustee may apply to the court for an order restoring property to him or her if you disposed of it in a way which was unfair to your creditors (for example, if before bankruptcy you had transferred property to a relative for less than its worth). The trustee may claim property which you obtain or which passes to you (for example, under a will) while you are bankrupt. A student loan made before or after the start of a student's bankruptcy is not regarded as an asset that the trustee may claim, if a balance of the loan remains payable. If you have made a claim against another person through court proceedings, or you think you may have a claim (a right of action) against another person, the claim may be an asset in the bankruptcy.

How am I made bankrupt?

Thu, 07 Feb 2008 15:47:46 +0000

A court makes a bankruptcy order only after a bankruptcy petition has been presented. It is usually presented either by yourself (debtor’s petition); or by one or more creditors who are owed at least £750 by you and that amount is unsecured (creditor’s petition).

A bankruptcy order can be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditor’s claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order has been made is both difficult and expensive.

What is bankruptcy?

Thu, 07 Feb 2008 15:46:55 +0000

Bankruptcy is one way of dealing with debts you cannot pay. The bankruptcy proceedings free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are shared out fairly among your creditors.

Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.

Six Steps to a Debt Management Plan

Thu, 07 Feb 2008 15:46:40 +0000

Step 1 – One of our debt advisors will work with you to assess your financial situation.This is 100% confidential. We’ll need to know your income and expenditure, who you owe money to and any other relevant information about your situation.

Step 2 – Your information will be collated into a Financial Statement, so that we can determine how much you can afford to offer each of your creditors.

Step 3 – The Debt Management Company will approach your creditors and ask them to accept the reduced payments.

Step 4 – You make a single monthly payment, which is distributed to your creditors.

Step 5 – A member of the Simple Debt Solutions Debt Management Team will work with you throughout the plan period should you experience any difficulties whilst the arrangement is in place (very rare).

Step 6 – We will review your Debt Management Plan regularly to ensure that it until meets your circumstances.

The plan will continue until your debts are cleared or until you wish to end the arrangement (for example if your income improves and you can afford to revert to the original monthly payments).

To get ethical, professional advice on a Debt Management Plan, call us now on 0800 389 5959 or fill in our online form and we’ll call you back.

Is a Debt Management Plan right for me?

Thu, 07 Feb 2008 15:45:54 +0000

A Debt Management Plan is a good option if you can afford to make regular payments to your creditors and you want an organised, simple way to pay. It can be the best option if you:

simply need a short term solution to your debts
have unsecured debts that you can't afford to repay
have significant equity in property but prefer not to remortgage or take out a secured loan
owe money to only one or two different companies
do not qualify for an Individual Voluntary Arrangement (IVA)
do not want your wife, husband, partner or spouse to find out about your debt
prefer to use a third party to deal with your debts
could pay your debts in full but don't want to change your lifestyle.

What are the general criteria required for acceptance of an IVA?

Thu, 07 Feb 2008 15:44:55 +0000

The requirements for acceptance of an IVA have changed over time but generally they are now the following:

Step 1 – You have debts that are greater than £15,000

Step 2 – You have three or more different creditors.

Step 3 – You have disposable income of over £200 per month, assets to release or a 3rd party who is willing to contribute into the IVA arrangement.
You must be able to pay creditors at least 25 pence in the pound. In our experience, many IVA cases fail because payment of a decent monthly amount is not feasible.

Step 4 – You have a regular income stream as some IVA cases can fail because an applicant's income is irregular or unreliable.

Step 5 – You have been able to show that you have allowed for reasonable necessary living expenses such food, council tax, water, gas etc.

Our fully trained debt advice team are available 9.00am until 9.00pm 7 days a week on 0800 389 5959.

Will my lifestyle change dramatically if I do an IVA?

Thu, 07 Feb 2008 15:44:27 +0000

No. Nobody will force you to change your lifestyle if you enter an IVA (providing it's not excessive). Your creditors will want to be sure you have a reasonable standard of living, and there are a series of guidelines that are in place to ensure this.

However things such as a social life, lottery, and smoking are not seen by the creditors as essential living expenditures and you will be expected to live within your budget as much as possible, which is why it is essential that you cover all the normal household living expenses on your financial statement.

Our fully trained debt advice team are available 9.00am until 9.00pm 7 days a week on 0800 389 5959.

Can I keep my car with an IVA?

Thu, 07 Feb 2008 15:43:58 +0000

It's usually possible to keep possession of your car, especially if it is required for work or family reasons. However, if your car is financed in some way (for example on a Hire Purchase agreement), the outstanding balance cannot be included in the IVA because the finance company would just repossess the car. In our experience, more often than not, an IVA can take place even while you are making Hire Purchase payments. When the Hire Purchase agreement is completed, the monthly payments must become a contribution towards the IVA instead.

We've found that in some cases, the best course of action is to sell the car back to the Hire Purchase finance company straightaway. If doing this leaves you with a debt to the finance company, this debt can then be included within the IVA.

Our fully trained debt advice team are available 9.00am until 9.00pm 7 days a week on 0800 389 5959.

Will my creditors agree to an IVA?

Thu, 07 Feb 2008 15:42:52 +0000

Most creditors - particularly banks, credit card and loan companies and other financial institutions are fully aware of the IVA process. If 75% of your creditors by value vote in favour of your IVA, then all creditors are bound by its terms. Creditors can suggest modifications to your proposal and you can choose whether to accept them or not. If your creditors vote against your proposal you have the option of an informal arrangement or bankruptcy. Our fully trained debt advice team are available 9.00am until 9.00pm 7 days a week on 0800 389 5959.

Advantages of an IVA

Thu, 07 Feb 2008 15:36:17 +0000

• There's no stigma or publicity unlike in bankruptcy
• You are always in control as the IVA is your proposal and (with our help) it is your choice which of your assets are included
• You'll always know where you stand and can be confident that you are taking a positive step to deal with your debts
• Your creditors will get a greater return as IVA costs are lower than in bankruptcy
• You can continue to be a company director (unlike in bankruptcy)
• An IVA does not affect professions such as the Police or Armed Forces
• If job security is a concern, an IVA is private and your employer has no need to know about it

Disadvantages of an IVA

Thu, 07 Feb 2008 15:34:54 +0000

• Usually only suitable if you've got unsecured debts of at least £15,000
• All your assets and liabilities must be disclosed
• Any windfalls (including inheritance) must be declared
• On occasion, some equity in your property may need to be released
• You credit rating can be impaired for up to six years

How does an IVA work?

Thu, 07 Feb 2008 15:32:46 +0000

One of our friendly, trained debt advisors will assess your financial position and, if an IVA is the best option for you, they will work with you throughout the process

Step 1 – You nominate one of our experienced licensed Insolvency practitioners to work on your behalf (by simply instructing us to act).

Step 2 – We will assist you to create an IVA proposal that can be presented to your creditors.

Step 3 – When you are happy with the IVA proposal, we’ll send a copy to each creditor who will then vote to either accept or reject the IVA proposal. If the majority (at least 75% of those who bother) vote in favour, then all creditors are legally bound to accept (even those who rejected it!).

Step 4 – Once your IVA is accepted, all letters and phone calls from your creditors will stop. We will deal with all your creditors – all you need to do is pay the agreed monthly amount.

Step 5 – Once your IVA has been concluded, you won’t owe any money to anyone but your credit rating may be affected for up to 6 years.

Why should I choose Simple Debt Solutions?

Thu, 07 Feb 2008 15:32:17 +0000

We are licensed Insolvency practitioners – unlike many debt management companies who are not.
To set-up an IVA, you must use the services of a licensed Insolvency practitioner. Simple Debt Solutions has a number of licensed Insolvency practitioners and our highly trained staff are all on-site and on hand to offer up-to-the-minute debt advice to all our customers....

What is a debt consolidation loan?

Thu, 07 Feb 2008 14:29:32 +0000

Depending on the size of your debt, a debt consolidation loan could be a solution worth thinking about. This type of loan is one that is used to pay off other loans or lines of credit and we have many customers for whom this has proven to be the best solution. If you are considering consolidating your debts, you’ll probably benefit from reading this short article on the advantages and disadvantages of debt consolidation.

Debt - The Hard Facts (Compiled 1st February 2008)

Fri, 01 Feb 2008 15:26:36 +0000

Total UK personal debt Total UK personal debt at the end of December 2007 stood at £1,409bn. The growth rate increased to 9.3% for the previous 12 months which equates to an increase of ~ £120bn. Total secured lending on homes at the end of December 2007 stood at £1,185bn. This has increased 10.0% in the last 12 months....

Debt - The Hard Facts (Compiled 4th January 2008)

Fri, 04 Jan 2008 14:32:49 +0000

Total UK personal debt Total UK personal debt at the end of November 2007 stood at £1,400bn. The growth rate increased to 9.5% for the previous 12 months which equates to an increase of ~ £120bn. Total secured lending on homes at the end of November 2007 stood at £1,177bn. This has increased 10.2% in the last 12 months....

Christmas / New Year Season (Special Report)

Thu, 20 Dec 2007 12:00:00 +0000

There were 669 million plastic card transactions in December 2006, six per cent more than during December 2005, equating to a record 250 transactions per second - day and night - through the month. Spending on plastic cards accounted for 63 per cent of total retail sales...

Debt - The Hard Facts (Compiled 1st August 2007)

Thu, 07 Feb 2008 15:36:02 +0000

Total UK personal debt Total UK personal debt at the end of June 2007 stood at £1,345bn. The growth rate increased to 10.2% for the previous 12 months which equates to an increase of £107bn. Total secured lending on homes at the end of June 2007 stood at £1,131bn. This has increased 11.2% in the last 12 months.

Debt - The Hard Facts (Compiled 1st June 2007)

Fri, 01 Jun 2007 16:28:21 +0100

Being in debt isn’t something you should feel ashamed about. It can (and does) happen to anyone. In our experience (and we have plenty) most people who get into debt difficulties are just like you and me. They’re normal people doing normal jobs who, as a result of unforeseen circumstances (divorce, mortgage rate rises, unemployment, illness etc) find that their finances run away from them and sooner or later, they need sensible advice and an ethical debt solution. That’s where we step in to help...