INTEREST RATE CUT WON’T EASE PAIN OF DEBT

Callers To Free Debt Helpline Use Credit Cards To Pay For Basic Needs

Today’s interest rate cut will do little to ease the pressure on people in debt, according to leading free debt solutions service, Payplan. Callers to Payplan’s free debt helpline are growing increasingly concerned at the rising cost of living and the impact this is having upon their ability to pay back what they owe to creditors.

Managing director at Payplan, John Fairhurst, said:

“The cut in interest rates, whilst welcome, won’t have any immediate impact upon the cost of living for most people in debt.”

In the nine months since the credit crunch began, callers to the free debt helpline have seen a nine per cent increase in their monthly spend on utilities.

Mr Fairhurst went on:

“While monthly bills have been going up, the money that people have available to repay their creditors has decreased by 14 per cent. This is placing families under huge pressure to meet their monthly commitments.”

A survey of new callers to Payplan’s debt helpline found that a third of people have paid priority bills, such as mortgage payments or utilities, using a credit card.

Mr Fairhurst urged:

“People who are struggling to see a way out of their financial situation should seek good advice from a free organisation. If you are paying for the roof over your head with a credit card, alarm bells should be ringing, and help is quickly needed before debt problems get any further out of control.”

Information for Editors

Payplan provides free, ethical and immediate debt help to over 100,000 people every year, working closely with organisations in the field of money advice and consumer and employee welfare.

Payplan Press Office

For further information please contact:

Jane Jenkins,
Payplan PR Manager
Email: jane.jenkins@payplan.com
Telephone: 01476 581 279

Contact Payplan

Call Payplan free on 0800 280 2816 six days a week to speak with an experienced debt adviser. Lines are open 8am to 9pm Monday to Friday and 9am to 3pm on Saturdays. Or visit the Payplan website to submit your debt problem online.

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Payday Cash Crunch – Payday Loans and Same Day Fast Cash

The New Consumer Credit Crunch? Payday Loans for Sameday Cash Prove Very Expensive

As creditors begin to reduce the amount of money available to consumers for mortgages and loans, many UK households are applying for credit from quick payday loans services to provide short term fast money to help meet their expenditure commitments.

Payday advance loans, an American import, have seen a boom in business in the UK since the beginning of the worldwide credit crunch, recent rises in the cost of living and mortgage rates. Unfortunately, they don’t come cheap, and often hide an underlying debt problem.

During an interview for BBC Radio 2, John Fairhurst from Payplan, the free debt advice organisation said:

“Often the sums are quite small, just a few hundred pounds, but the interest rates charged are enormous. A thousand per cent APR is not uncommon.”

At these rates, for every £100 borrowed, debtors could be paying back an extra £25.

John Fairhurst explained that for someone who was employed and had a cheque book bank account, ‘instant cash advance loans’ or ‘payday loans’ were relatively easy and straightforward to obtain. He said:

“…you can walk in, write a post-dated cheque for payday for the amount and interest and walk out with the cash.”

The problem with short term loans or ‘quick money’ from payday loan companies is that once a person becomes reliant on same day cash loans, their debt problem can spiral out of all proportion to the original amount that was borrowed.

For those that are struggling to meet their bills and pay their mortgages, rent and council tax, payday loans cannot be the best way forward. Payplan, who offer free debt advice and free debt management plans, can also offer budgeting advice to enable debtors to prioritise their costs and help deal with their debts without the need to rely on emergency cash advances from payday loan companies.

Call Payplan free on 0800 280 2816 or, submit your details confidentially online using their Debt Calculator or Quick Debt Enquiry.

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Bankruptcy Threat From Creditor For House I No Longer Own

Debt Question of the Week

One of my creditors has advised that they are going to make me bankrupt and state that it is a matter of public record that I own a house. However I sold the house 5 months ago and now live in a rented property. I have no other assets, so what can I do?

1) You should let the creditor know that you are no longer a home owner, and ask whether they would withdraw the threat of bankruptcy, as you have no assets from which they may receive some benefit.

2) You should then send proof of the sale such as the Copy of Sale documentation from the solicitor.

3) Next, contact the solicitor who handled the sale for you and advise them that the Land Registry don’t appear to have updated their details acknowledging that you are no longer the home owner. Your solicitor should have notified them of this. Perhaps the solicitor has failed to make them aware.

4) If there is no other reason why you wish to avoid bankruptcy, such as job being at risk or the need to avoid it becoming public knowledge, then having a creditor petition for your bankruptcy would at least save you the need to find the fee yourself and it would rid you of all unsecured debts in one go. We would advise that you check your tenancy agreement to ensure this isn’t at risk if you are made bankrupt.

5) If you wish to avoid bankruptcy, then Payplan can offer alternative debt solutions such as completely free debt management or an IVA. Call Payplan free on 0800 280 2816 or submit your details online for free debt advice.

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