Is this year going to be the biggest Christmas debt hangover?

January 3, 2008 on 11:06 am | In Debt Management

There has been a massive increase in the number of people spending online and using credit and debit cards to do their Christmas shopping. The answer to the question, ‘Is this year going to be the biggest Christmas debt hangover?’ has got to be YES.

We have spent our way into debt. Personal debt will be the biggest political topic this year and with interest rates at a six year high things are not going to improve, especially when you read that paying off our debts and mortgages are way down on our priority list.

The first bills are going to hit shortly and when they do have a look at how much of your disposable income is being used to repay your debts. If more than 35% of your income goes on servicing debt then you’re in trouble.

 

Post Christmas Options

December 11, 2007 on 11:15 am | In Debt Management, Remortgages

What never ceases to amaze me is the number of people who do not think that their mortgage is a debt. So it follows that when they remortgage to consolidate unsecured debt they see that as a license to run up further large bills on their credit cards and obtain unmanageable loans.

This is all well and good in a buoyant property market and when lending is cheap. However, when the lenders decide to withdraw products which allow remortgages over 75% loan to value (‘LTV’) and interest rates creep up, then remortgaging to repay debts is no longer a viable option.

There are in the region of 1 million people due to come out of the fixed rate mortgages in the coming weeks. Their monthly mortgage payments will sky rocket. Christmas spending is set to be at a record high with the majority of spending on credit cards. Banks have cut interest rates marginally but this will not repair the damage done by the credit crunch.

When the first credit card bill hits in the New Year it is essential you get good debt advice.

 

UK Debt

November 1, 2007 on 9:13 am | In Debt Management

Staggering new debt statistics have been issued today……..

Britons are incurring debt at a rate of £15million per hour, £373million per day.

Accepted loan applications decreased by 15% and are getting lower month on month as lenders withdraw products that are no longer viable.

You don’t need to be a professor of economics to work out that we are heading for disaster.

 

Stress

October 12, 2007 on 3:12 pm | In Debt Management

Credit card debt, personal debt, bank debt, mortgage debt, car finance, loans, consolidation loans … debts, debts, debts …. it’s all you hear and even moreso over recent years as society becomes more indebted to meet individual wants.

Never in the history of our country has there been so many people in debt or more to the point, unmanageable debt. What does debt cause? STRESS! Even Northern Rock’s key man, Keith Currie is off with stress, the Telegraph tells us today. If Northern Rock’s treasurer is off with stress what is the average man in street suffering?

The problem with stress is most of the time you don’t know you are suffering from it and that’s why it’s a killer.

Debt or financial worry is probably the biggest cause of stress and quite honestly facing up to a problem by getting sound advice is the first step.

 

How did Northern Rock get into trouble?

October 3, 2007 on 1:29 pm | In Debt Management

Banks lend more money than they keep in their vaults. If everyone decided to empty their bank accounts, (a ‘run on the bank’) then this would create problems.

Put simply, most banks get money to lend out by attracting savings. You give the bank money as a saver and it lends that money to someone to buy, say, a house. It gets more back in interest on the loan than it pays you in interest to get you to save.

Northern Rock’s problem was that it got its money from international money markets (other banks) at a cheaper rate than it lent it out. Following the hit the banks took when the USA’s housing market collapsed, they put up the rates they lend to other banks.

Your money is only safe with Northern Rock because the Bank of England stepped in to support it. They probably wouldn’t have done so if Northern Rock’s assets covered their risk.

Your money is safe with them for now but their problems mean that lending money in future will be not be as easy and definitely more expensive. So if you are looking to consolidate your debts think about your options.

Remember a prime golden rule ……… ‘Don’t borrow money to pay off existing debts without getting advice first’.

 

The Credit Crunch – How will it effect you?

September 18, 2007 on 9:42 am | In Debt Management

How do problems in global money markets effect me and you? Well, I have a mortgage and it is likely that you do too. You have to ask yourself where your mortgage company gets money to lend to you. Simplistically, from global money markets; one institution to another.

Also ask yourself, what if the rates on which the banks lend goes up? Well you guessed it, they pass the increase onto their clients ….. our mortgage payments go up.

The recent problems in global money markets have been termed the ‘Credit Crunch’ or ‘Credit Crisis’ and we have seen, in the last week or so, lenders putting their rates up. Abbey is the most notable, with Halifax and Standard Life looking set to follow.

If high street lenders are feeling the pinch, sub prime or secondary lenders are likely to be in turmoil ….. you need to work out the cost to you.

 

Getting a loan to live?

September 13, 2007 on 2:19 pm | In Loans

Consumers are running into trouble as a combination of rising costs and tighter lending criteria squeeze their spending powers.

Provident Financial has reported that more and more people are borrowing money from them and it blames food and fuel prices. It is worrying that people are borrowing money to live and not just to buy luxury items.

Clearly something has to give. Mainstream lenders are seeing bad debt soar and they are no longer willing to give money to anyone. In fact lenders such as Provident are not a soft touch and in the past six months it has rejected 7 in 10 credit card applications.

I am concerned about those people who make applications to look for credit to live. If that is you, you need debt advice.

 

Christmas is coming

September 12, 2007 on 3:31 pm | In Debt Management

I know it’s early but some people are already buying presents for Christmas. ‘How organised’, you may say and given that we are already thinking about the run up to Christmas it may well be a good sign for the retailers. However I think retailers maybe in for a grim Christmas.

Consumers are feeling the squeeze as the Citizens Advice Bureau (CAB) reports handling a record 6,600 debt enquiries a day. If you need to enquire about debt at the CAB you need financial help … and with Christmas round the corner……

 

Are your creditors threatening court action? Getting good early advice could save you £££’s and heartache.

July 30, 2007 on 10:39 am | In Debt Management

Well I was right about the impending interest rate rise. Bank rates went up to 5.75% in early July and I see no reason why they will not rise again to 6%. Here at Simple Debt Solutions, we’re now seeing the early effects of this rise - our debt advice team have already registered an increase in call volume from people seeking help.

They’ve also noted that an increasing amount of callers are reporting that their creditors are resorting to court action rather than negotiate to settle outstanding debt. I’ve had a look into this and it seems that the number of county court judgments (CCJs) for non-payment cases has risen to a near 10-year high. A total of 247,187 consumer debt related CCJs were issued in the first three months of the 2007 - the highest quarterly total since the summer of 1997.

This is very concerning. Court action adds greatly to the costs and distress faced by people in debt, so it’s vital that you seek debt advice as soon as possible - please don’t let the problem snowball out of control. We know from experience that the longer you leave your debt problem, the worse it will get.

To cope with the increase in demand for our debt advice, we’ve extended the opening hours of our call centre. You can now call our team all weekend from 9.00am until 9.00pm on 0800 3895959.

 

Bank of England Governor warns of major debt crisis

June 22, 2007 on 10:22 am | In Debt Management

I’ve just been reading a transcript of Mervyn King’s speech at the annual Mansion House banquet and it doesn’t pull any punches. It looks like there could be another rate rise in the next few months which could tip millions of household budgets into the red. He went on to urge families to “be cautious about how much you borrow”. All the advisors I talk to expect rates to be up to 6% by the end of the year which means someone on a typical £125,000 mortgage will be paying an extra £100 per month compared to last year. When you consider that we are already seeing rises in council tax, water and food bills, the combination could have devastating effects.

But if you are reading this and think you could be affected, there is something you can do - Get some good quality debt advice as soon as possible. It only takes a discreet phone call and the sooner you do it, the sooner you’ll be able to get back on your feet. Advice is free - make sure you get it.

 

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