Personal debt advice in the UK has become an enormous issue for all kinds of reasons. Unfortunately it has had a stigma attached to it in the past which may stop some people dealing with their debt problems. This has the effect of actually making the situation worse when it would be relatively simple to get under control with the right advice on debt.

There are several signs that your personal debts have gotten out of control.

• Are your monthly outgoings starting to outweigh your monthly income?

• Are you scared to answer the phone and open your mail?

• Do you have debt collectors chasing you for money?

There are many possible routes to take when dealing with advice on debt. Every situation is different and a tailored solution needs to be discussed. Any one of the following could be the solution for you to find help with personal debts.

• IVA (or TRUST DEED in SCOTLAND)
• DEBT MANAGEMENT PLAN
• BANKRUPTCY
• DEBT CONSOLIDATION LOAN

If you are a bit wary of committing to a fixed term financial solution like an IVA or Individual Voluntary Arrangement, then debt management can help you restructure debts in the short term. A debt management plan constitutes an informal agreement between you and your creditors.

Loans to consolidate your debts, taking out a consolidation loan to pay off all your current agreements (loans,credit cards etc) is often the simplest option as it can reduce your monthly repayments.

• REMEMBER ADVICE on DEBT SHOULD ALWAYS BE FREE
• Do NOT Pay for advice calling HIGH rate phone lines.

Individual Voluntary Arrangements

With an IVA, all interest and penalty charges are STOPPED! You will be given one affordable monthly repayment to make and this should stop all the creditor phone calls and letters you may currently be receiving.

An IVA will prevent court proceedings and even stop bankruptcy and after what is normally 60 months (5 years). Read about a Trust Deed in Scotland as laws differ there for financial help and assistance.

Bankruptcy is the end of the road as far as debt management or debt help. Once you reach bankruptcy, your finances will be sorted out by the courts. In a nutshell, if you reach the stage where you need to become bankrupt, it will mean that you will get a fresh start and normally your debts will be written off, conditions and restrictions do apply though.

Let one of our trained professional advisors call you today to help give advice on debt and find a solution to your debt problems. Peoples debt problems are rarely unique and we may be able to help you clear debt.

• Call 0800 018 6868 free from landlines, call charges from mobile phones may vary.

• It seems to be getting harder and harder to be accepted for a personal loan in the UK.

This is due to a number of factors as follows:

• Purely and simply, banks have tightened their criteria for lending
• There is a smaller pot of money that banks are using to lend out to customers
• Previous credit records are being more closely scrutinised

Which to be honest is all underpinned by the fact that banks are looking to fundamentally change the structure and the risk reflected in their balance sheets.  Having re-read this a number of times, your blogger is in danger of sounding like an ultra boring accountant, so lets look into what this actually means in more detail.

1. Banks are being asked by the coalition government (and the EU) to reduce the overall risks taken in their lending, to avoid a repeat of the recent financial crisis.  In the longer term, this may see some banks be ‘split’ so that there retail divisions (everyday banking for you and I) are split from their investment arms.

NB: When the papers talk about ‘grotesque bonuses’ it is very rare for anyone in the Retail divisions to be in receipt of these substantial sums.  Therefore, try not to get too angry with the customer services clerk who serves you in your local high street branch!

• The banking crisis and bonus culture cannot be attributed to he or she!

2. In response to being asked to reduce overall risk, the executive boards of major banks have decided that the overall amount of money available to lend to individuals and to small and medium sized businesses should be reduced.  This means that there is the same amount of people competing for a reduced pot of money.

Specifically in response to reducing the ‘risky’ lending, it is considerably easier to tighten up lending scorecards to personal customers and small businesses.  These scorecards are basically a list of questions, where the responses are used to make decisions on granting a personal loan or approving an overdraft or credit agreement.  For retail customers these scorecards can prove to be very accurate predictors of what constitutes a ‘good’ lending decision.

During the height of personal borrowing in the UK,  these scorecards were ‘loosened’ slightly, which meant that banks accepted that there may be a higher volume of cases which default, in exchange for obtaining an increased overall lending pot (and increased interest payments to fuel profits).

3. Finally, the executive management of many of the large UK banks have decided to go ‘back to basics’ and instead of borrowing money from international markets, in order to lend to retail customers, they would go about things in the traditional way.  Encourage more savers to deposit with them, prior to lending out a safer proportion of saver’s funds.

Whilst this is a noble response, it also doesn’t take a genius to work out that when the average savings deposit account on the high street pays less than 1% gross interest (and the UK inflation rate soars towards 5%), depositing funds into a high street bank is a less than attractive proposition.

• So, where does this leave you, the borrower, looking to obtain funds to allow you to purchase that new car, or build the extension at the back of the house?

At Lewis Alexander, we specialise in debt management advice and advice if refused a loan, we may be able to help you obtain access to borrowing if you qualify.

One free call to our personal debt and personal loan advisors on 0800 018 6868 could help you understand how you can restructure your existing borrowing or rectify your credit rating.

• Our advisors are all professionals and will treat your call in the strictest of confidence.
• So call us FREE today to see if we can assist you in your borrowing plans for 2011!
• Call 0800 018 6868

Sound familiar?

During the late nineties and the early naughties, credit card companies were only too keen for us to have ever larger credit limits, more accounts and more authorised users.

This, coupled with the introduction of balance transfers to the UK meant that consumers had increasing opportunities to borrow more and increased scope to move these borrowed funds around the various UK credit card providers.

• This practice was given the somewhat seedy title of being a ‘rate tart’, but has become increasingly harder in recent years owing to a number of factors.

Firstly is the recent tightening of credit risk policies that has followed the credit crunch.  This has meant that constantly rising credit limits has halted and in some cases account limits have been reduced.  There has also been a reluctance on behalf of the credit card companies to open accounts to customers who already hold several credit facilities with other credit providers.

Indeed a report published by PaymentsCM in 2007 suggests that the volume of accounts, cards issued and active accounts was on the decline towards the end of the naughties, a trend that a report by Datamonitor supports which highlighted a drop in value of £10.9 billion in the UK credit card market in 2009 and 2010.

In recent years it has also become harder to benefit from low-interest or interest-free balance transfers as increasing numbers of credit providers apply a percentage charge to balance transfers, meaning that whilst you avoid interest, you can typically pay between £100 and £200 to transfer a balance of £5,000.

Whilst the interest rates are still low or zero, these charges do make the overall cost of credit more expensive.  There are also increasing terms and conditions that accompany such deals, meaning that if you miss your monthly repayment or are the mere matter of a day late in making a payment, then the promotional interest rate is revoked in favour of the standard rate of interest.

• So what should you do if you are caught in the trap of stable or increasing credit card balances?

First and most importantly you should seek to understand all of your credit commitments across credit cards, personal loans and overdrafts.  Once you have a clear picture of these and the amounts that you are paying or transferring each month, you can start to review your approach to repaying credit card debts and improving your financial health.

• One call to our financial management consultants at Lewis Alexander can also help.

Lines are open 24 hours a day and you can call free using 0800 018 6868, our debt consultants can help you start to make progress towards reducing a debt problem.  By completing a financial healthcheck, we can assess your financial situation and provide recommendations for intelligent monetary management.

It may be more beneficial for you to prioritise your repayments and repay certain creditors first.  It may also be possible to consolidate some of your borrowings into one loan, or even renegotiate the credit terms that you are currently committed to.

• The above options could help you to repay your debts more speedily and may also reduce the credit balances that you owe.
• Remember our debt management advisors are only one free phone call away on 0800 018 6868.

Call Lewis Alexander now to start making improvements to the way that you manage your financial health!  Our specialists are waiting for your call, so contact our personal debt helpline using 0800 018 6868 today!

Personal debt has been driven up by our previous government allowing banks to basically over lend, just like the previous government increased the countries own debt level.  It all has to be repaid at some point and now we find the banks are unable to lend against property unless people can provide a deposit, in some cases being up to 35% of the desired property value. Interbank lending reductions are also showing signs of returning.  This means money becomes even shorter in supply generally throughout the entire economy.

If we look at consumer personal debt levels, these have been created via irresponsible lending and irresponsible spending, but not in all cases.

Some people have also consolidated their personal unsecured debts such as credit cards and loans, store cards and catalogues into either a new secured loan against their home or into the existing mortgage by remortgaging the money from available equity in their home.

This is very risky when you think that in the very near future, interest rates will have to start going up again and that will mean that people again will feel the squeeze in their monthly budget as their mortgage or home repayment costs go up.  Some will be able to manage the increase and some will not, these are the people that really should be looking in their most trusted crystal ball at the moment.

When lending by banks against property reduces it can also mean that house prices in turn may fall, this is because people have to be more realistic about the value of their house for sale purposes if they really wish to move quickly, banks will only lend money against a property for what it is worth, not for what a vendor feels they have spent on it which actually becomes perceived added value.  The perception of increased value is not always there in the eyes of the banks at the point of lending!

International investment from outside the UK from people moving here or buying second homes here, coupled with the fact that demand in the UK for new affordable housing is outstripping supply and has done for the past couple of decades, means that this supply and demand issue for new affordable housing could be the only saving grace to our UK housing market, if the international money which usually goes directly into London stops due to global issues and the banks don’t inter lend, then the only people buying houses will be first time buyers with very large deposits, therefore a reduction in most house prices would follow.

If you have unsecured personal debts and a mortgage to pay each month you should make sure that the credit repayments are not eating up the majority of your income, if they are it is time to seek some personal debt advice.  If you think things could get out of control for you financially if you suffered a change in circumstance, then you should be planning ahead just in case.

When you repay credit cards and loans, sometimes you are servicing the debt by only paying interest that is accruing, this is as good as renting your debt off of your creditor, you must get into a debt reduction plan as soon as possible if this is the case.

• Taking the first step to sorting a financial problem is usually the hardest, as with most unfamiliar things we do in life.

If you need professional advice regarding your outstanding personal finances then call our personal debt helpline today in confidence using 0800 018 6868, lines are open 24 hours and your call is free.

A lender or loan company makes a decision to lend based on the risk that you personally present to them regarding your ability to repay the credit you are applying for.

Examples of factors that lenders take into account when scoring your application for credit could be some of these that follow;

• Are you working or not?
• If employed is this full time or part time?
• Do state benefits make up 100% of your income?
• Do you have a UK bank account?
• Does your employer pay you in cash?
• Has a bad credit rating affected you from obtaining credit or loans recently from other lenders?
• Will you be able to repay the loan if you suffer a change in circumstance, such as loss of job, split from partner or less hours at work?
• Have you ever been declared Bankrupt, subject to an IVA or Debt Relief Order?

There are many factors that lenders will take into account when deciding to lend money to an individual and you should accept that each lender has different requirements that the proposed customer or client should be able to meet.

• A lender does not have to inform you of how they decide on approving or declining your loan or credit application.

Different loans require people to qualify in differing ways.

For example, a debt consolidation loan could be secured against a home, this would require the individual to usually be a home owner because if they were not, there would be no property for the lender to secure the new loan against should the person fail to repay.

An unsecured loan requires no security but rates of interest are usually higher to balance a lenders risk of loss due to none repayment or an unexpected time delay to recover the money leant.

If you have been refused a loan and then made further applications for credit within a short space of time, you may be surprised to learn that multiple declines for credit within a short period can mark your credit score down further.  This is then an alarm bell to other lenders when they search your credit file to see if they are happy to lend to you because they see all the other lenders declines.

You need to realise that more credit is not usually the best route and by obtaining free financial advice from a trained debt advisor, you will be able to clear your personal debts without another loan!

Debt solutions such as an IVA or Debt Management Plan could assist you.

• Some loan companies will charge you fees for an online loan search – be careful!

Can you really afford to part with another £50 or £60 without a guarantee of a loan? Some companies are making large gains from taking advantage of consumers in a vulnerable financial position.

When you have no other income apart from state benefits, it is hard to get a loan.  People on maternity leave can find it particularly difficult as they have a job but the income is reduced, creating extra risk to the lender.

If you think would benefit from a free telephone consultation with a trained loan advisor who can help you identify your best solution, call Lewis Alexander free using 0800 018 6868, our free from a landline personal debt helpline is open 24 hours a day 7 days a week and all calls are confidential.

In our business of managing hundreds of clients finances and helping them with their debt consolidation, we have found that the biggest cause of stress in families is always regarding their personal debt and how best to manage the debt problem that can spiral out of control very easily.

We find that many people are not aware of the debt help that is available for people who genuinely want to reduce their debt and be able to cope with managing their income and expenditure.

There are many financial companies who have an excellent track record in helping people in this situation and these companies are able to ease their clients’ worries very quickly.

Debt consolidation is one method that can be used very effectively to reduce your outgoings and balance it with your in comings, especially with expert help.

• Many people need educating in what one needs to do in this situation!

Contacting a debt consolidation company will help and educate them as to what decisions need to be made to effectively manage the current situation in the best possible way.  This in itself is a way that a client can receive immediate relief from the worries of not being able to cope financially and the ability to sit down or talk to a consultant over the phone will have long term benefits for the individuals financial future.

Over the many years of managing and clearing clients debts, our experience tells us that once a client contacts a debt management or debt consolidation company, they are put at ease, knowing that that they will not have to deal with a bailiff or collection agent knocking on their door demanding monies that they cannot afford.  The fact that the debt agency is there to help in this situation makes a huge difference.

• What Is Debt Consolidation?

In the simplest terms, debt consolidation means that you take all of your individual unsecured or secured repayments such as credit cards, overdrafts, loans and catalogues etc and put them all together as one full amount owed. This full amount is the amount that is then arranged into one consolidated loan, offering the benefit of making one lower, affordable and reduced monthly repayment over a longer period initially, if necessary with the effect of reducing ones monthly outgoings.

• The main purpose of this is to;

1)  Reduce the total amount of debt – this can be achieved effectively when you work closely with one lender who will pay off all your outstanding debt and consolidate it into one monthly repayment.

2)  Create one new payment to a new lender that is far smaller than all the individual payments to various lenders. Debt consolidation companies have much more experience dealing with lenders in this scenario and can also negotiate a much better rate of interest, effectively reducing your overall personal debt.

3)  Allowing you in time to reduce your overall debt if you can make slightly larger payments in due course will have the net effect that you would pay much less in interest over the whole period.

• One of the benefits that occurs as a result of the above is that you end up with a much better organized financial statement regarding your income and expenditure.

We all find that many bills to pay means you have to be so much better organised and able to meet all the various payments at the due dates or end up paying penalties for late payments, causing you to pay much more in the long run and also affecting your credit rating along the way.

One outgoing for a loan is much easier managed than 10 different payments to various lenders!

• What are my options when Consolidating my Debt?

1)  If you own your own home and have a reasonable amount of equity in your home you may consider the route of refinancing your existing mortgage to pay off other debts which will reduce your overall interest paid.

2)  If you have a fairly good credit rating you may be able to obtain a personal loan and many people would favor this as the equity in their homes has been drastically reduced in the last few years. You can find out more information about these specialist loans from good debt consolidation companies or debt counselors.

3)  If you have credit cards with large balances then you may opt to transfer all your other debts onto one single card, but you will end up paying higher interest or charges with this method.

4)  Many times you may be able to get help or assistance from family and friends, however, when one wants to keep a certain amount of privacy with financial affairs, most people are swayed against this course of action unless they have very good and open relations with family.  You are also likely to create tensions in family when the last thing you need is further tension, lack of privacy and stress.

5)  Seeking out a professional debt consolidation company – For many people this would be the best option, working closely with a time served and reputable company who have specialists in debt consolidation, debt management and debt reduction will really help you. The advantage is in the fact that they have an in depth knowledge of the areas concerned and also have very good working relationships with banks, credit card companies and general debt collectors and lenders. It is possible in many cases that they are able to negotiate better rates of interest and settlements.

It is important to note here that lately, there has been a surge in new companies operating in this debt arena, many of whom have very little track record and your interests are, shall we say, not their first priority!  It is very important that you do your homework and work with only the best companies that are prepared to look after your interests first, not their own.

Lewis Alexander Financial Management offer a first class personal Debt Management Service, nationwide throughout the UK. We are based in Manchester and we have helped thousands of client’s in our history.  We have in house specialists who concentrate on debt management and loan consolidation and we have been looking after a great number of our clients for many years now.

Call Lewis Alexander on their personal debt helpline using 0800 018 6868, our lines are open 24 hours a day, 7 days a week and your call is free.

IVA or Debt Management

The most difficult decision when trying to clear personal debts can be which debt solution to choose after doing all your homework on the options available.

• Debt Management Plans or
• IVA – Individual Voluntary Arrangements
• are usually the two solutions that people have to decide between. When faced with the two options, there are many factors that influence the choice of informal debt management over an IVA and likewise, an IVA over a debt management plan.

It is very important that you understand the differences between these debt solutions, as if you do not, you could easily have the wool pulled over your eyes by a clever and unscrupulous debt advisor that wants to earn extra commission for placing you onto an IVA as opposed to an informal Debt Management Plan.

A professional debt management company such as Lewis Alexander will offer you advice tailored to your personal situation and if you are better suited to a debt management plan rather than personal Insolvency or an IVA, we will tell you, however, you make the final decision based on the debt advice given to you.

It is your choice no one Else’s!

When you are in debt it can feel like everyone else does not understand your particular situation and that you feel that your debt problems are some how different to all others.  This is not true, it is actually a mental stigma associated with being in personal debt, you are not alone and your financial problem is usually pretty much the same as others around you, it is your personal change in circumstance that will differ to other peoples, this is what creates the problem of being in debt in the first place.

Some people split from partners or others suffer a death in the family, others may have hours at work reduce resulting in less income, the list is endless but what is the same is the debt problem that people find themselves with due to being set back financially by the change in circumstance they may have suffered.

The main difference between an IVA and Debt Management Plan (DMP) is that

• An IVA is a legally binding agreement
• A debt management plan is not.

With a debt management plan you can expect to repay much of what you owe.  With an IVA, the debt that is not repaid within a 60 month period is then written off by your creditors, this is agreed at a creditors meeting prior to the IVA commencing.

The IVA will guarantee to freeze any interest or charges being applied to your accounts, a debt management plan will not and it is down to the hard work and efforts put in by your chosen debt management company as to how quickly your debt is reduced, make your selection regarding your chosen debt company or debt service carefully!

• The cost of choosing or selecting the wrong debt company or agency to solve your debt problems can be as high as the interest being applied by your creditors to your accounts.
• The wrong debt company will have no concern on actually getting the job done, they are more concerned with extracting funds from you and fobbing you off with none truths.

For honest, genuine, debt advice and help in the UK, call our free from a landline personal debt helpline today using 0800 018 6868, your personal details are dealt with in absolute confidence and your call is free!