Free yourself from debt today.

DEBT HELP NOW
In 5 Minutes Or Less

What does the double-dip recession mean for the UK?

As we enter into a double dip recession, many of us will still have painful memories of the last one in 2009. Some of Britain’s biggest businesses folded, such as Woolworths and many sectors including construction and banking struggled. So what does the double dip recession mean for the UK?

The UK economy shrank by 0.2%* over the first quarter of 2012. This follows a fall of 0.3%* over the final quarter of 2011. The definition of a recession is when we have two consecutive quarters that report a negative growth.

The economical state was partly due to a sharp fall in construction output, as production fell by 0.4% over the first quarter of the year and construction decreased by 3%. Others say that the Eurozone had an impact which could have been a factor in the recession.

As we enter the second half of 2012, growth is expected to pick up. Inflation is predicated to drop, meaning that people will have more money to spend, and unemployment figures are already dropping as more people return to work.

Joanne Elson OBE, chief executive of the Money Advice Trust explains “While the technical recession might have only just returned, unfortunately the people’s recession never really went away.”

To make sure that you protect yourself during the recession you can keep your outgoings down by budgeting and beginning to build up a pot of savings.

*According to official figures released by the Office for National Statistics 

Filed Under Debt News, Financial News  |  Trackback  |  Leave a Comment

The Real Cost of Driving

There is no hiding from the fact that the cost of driving is going up. From fuel to insurance to on-going maintenance – driving a car costs us hundreds of pounds each year.

Fuel prices regularly hit the headlines as prices continue to soar. As this blog is published the average price for a litre of petrol and diesel is at a record high at 142.42ppp and 147.93ppp respectively. In the recent budget people urged Chancellor George Osborn to scrap a planned increase in fuel duty tax, unfortunately for motorists the Chancellor ignored the calls and decided to go ahead with his plans to add a further 3.02ppp (pence per litre) to fuel on 1st August.

It isn’t just fuel that has hit the headlines, as recently judges at the European Court of Justice decided that it was unfair for insurers across the EU to continue charging different premiums for people depending on gender. This will mean that from 21st December 2012 when the ruling comes into action, many will see their policy increase, especially women. Traditionally women paid less for their insurances as statistics show that men are more likely to be involved in an accident.

Other costs associated with driving include road tax, MOT and maintenance. The diesel car costing £15,000 new currently costs £165 per year to tax, with a petrol car of the same value costs £245 according the figures released by the AA. An MOT currently costs £54.85 and general maintenance can cost anything up to thousands depending on the make and model of the car.

If you have a car, why not work out how much it is costing you to run over the course of the year? The AA has a break down for different vehicle types that may be able to help you, why not have a look by clicking here

If you find that you are spending too much, or can no longer afford the cost of driving, why not look at alternatives like:

Walking

Biking

Public transport

Car sharing

And see how much money you can save.

Remember if you are struggling with your finances and are in need of debt advice then please call us on 0800 2945205 or fill in our online form and we will call you back.

Filed Under Budgeting  |  Trackback  |  1 Comment

Dealing With Debt and Divorce

In spite of all the good intentions you might once have had, sometimes two people in a married relationship simply have to accept that it’s the best for both parties if the relationship is ended and the marriage dissolved.

A marriage (or civil partnership) is a legal joining of two people, and therefore if the two parties decide to legally seperate then they must apply to the court to do so.  This process is known as divorce, and while the divorce process is much simpler than it was many years ago it can still cause complications, particularly if the split isn’t amicably approached by one or both of the parties concerned.

You should think carefully before proceeding with a divorce.  As well as the emotional upheaval that is felt before, during and after such a split, many people find that a divorce is a very costly exercise.  Even if you are eligible for Legal Aid, you’re still expected to divide any financial (i.e savings, debts, pensions) and physical assets (i.e., house, car) in a manner that is fair and reasonable.

What Are The Steps To Divorce?

A divorce usually begins when one person decides to formally end the marriage, although in England & Wales you must have been married for more than one year before you’re allowed to apply for divorce.  Someone who initiates the divorce procedure is called the petitioner (because they need to file a petition to the court) and the other person is called the respondent (because they are required to respond to the court during the process).

You need a legal reason to get divorced and the divorce will proceed more smoothly if both parties agree on the reason for the divorce, so it would make sense to discuss this fully between yourselves.  If the respondent were to contest the decision in court this can result in expensive and unnecessary delays that could be avoided had you agreed this from the offset.

The petitioner normally appoints a solicitor to represent them during the divorce.  If there are children involved in the marriage, a formal arrangement to state how the children will be looked after during and after the divorce must be agreed before the petitioner then applies to the court to acknowledge that a divorce has been requested.

After the respondent has formally accepted the petition, the petitioner can then request to the court that a decree nisi is issued.  This is in effect a legal announcement of the intention to divorce.  Six weeks and one day after the degree nisi is issued, the petitioner may apply for a decree absolute, which is the legal order that finally dissolves the marriage. However, if there are complications and disagreements between parties this could take longer.

You may qualify for Legal Aid to assist you during your divorce, although depending on your circumstances you may have to repay this at some point in the future.  If you think you are eligible for legal aid, telephone Community Legal Advice on 0845 345 4345 (calls are not free).

Division Of Assets

When a couple divorce, they are expected to formalise their financial and support arrangements for any children, and then divide the assets that are held by both parties in a responsible and fair way.  As people have many different personal circumstances these days, there are no hard and fast rules employed by courts to assess how the assets of a marriage should be split.

Instead, a couple are encouraged to discuss and agree how assets should be divided between themselves, and the court will generally only become involved if it feels that the division as presented to the courts is significantly unfairly biased towards one person.  You could use a family lawyer or some other professional mediator to help you decide on how to split assets, but obviously if you can agree on a fair split yourselves then this works out much cheaper than if you needed professional help to agree on what assets you will each take from the marriage.

There aren’t any hard and fast rules when it comes to the division of assets, so the court generally hopes that a common sense agreement can be made in most cases.

Bank Accounts

Most married couples these days have a joint account that both use for joint purchases such as weekly groceries and consumables for the home.

Once you’ve both agreed to divorce, it may make sense to change any joint accounts and make other arrangements to deal with such expenses, as both parties are liable for any overdraft on the account.  If the divorce is not amicable, then it’s possible for an irate partner to run up an overdraft in that account with no intention of repaying it.  The other partner would then also be liable for repaying this.

In order to separate any money in any bank accounts, you’d need to discuss who is entitled to what.  Bear in mind who pays into the various accounts, money needed for children’s expenses, and any money that may have come to one person in particular such as inheritance money.

Child Maintenance

Child maintenance is a court-approved regular payment that the child’s main carer is paid by the other parent in order to help maintain the day-to-day care of a child whilst they are in full time education.  Child maintenance is intended to help to provide things like clothing, food, and leisure expenses, and such financial arrangements can also encourage both parents to stay actively connected to their child’s upbringing and development.

Contrary to popular belief, the amount paid as child maintenance is not usually set by a court at a fixed rate for everyone.  In fact you’re encouraged to agree a child support arrangement amicably between yourselves, and such an informal arrangement is commonly known as a ‘family arrangement’.

A child maintenance family arrangement needn’t be a set amount of money that’s paid regularly, an estranged parent may agree to take responsibility for school uniforms, sports equipment, leisure expenses or anything just so long as both parents agree to the arrangement.

If a family arrangement can’t be made, perhaps because the relationship between the parents is particularly bad, then you can still look at making a child maintenance arrangement through the Child Support Agency (CSA)

A Final Word…

This is a guide only.  As everyone’s circumstances are different, we unfortunately can’t cover all aspects of divorce in this guide but we hope we’ve given you some helpful information to get you started.

As a general rule, the more amicable you can proceed through the divorce process, the less it should cost you.  But even so, all divorces will involve some sort of expense and division of assets, so you need to be prepared for at least a temporary loss of income, or increased expenditure, or even a complete change in circumstances.

Filed Under debt advice  |  Trackback  |  Leave a Comment

Understanding credit reports and how they are affected by DMPs

By James Jones from Experian

Credit checking is a mystery to some, so how does it work?

Basically, lenders obtain your consent to share and access information about your credit agreements through credit reference agencies like Experian. We combine these records with others, such as court judgments and insolvencies, to create what is called your credit report. We can produce a credit report for most adults in the UK.

You will usually give the lender permission to check your report when you apply for credit. If your report shows that you’re a reliable customer then it can help you get the credit you ask for. Most lenders use a technique called credit scoring (or ‘credit rating’) to help them work out the chances of you repaying credit, based on your credit report and any other information they have about you.

Despite frequent reports of an impending debt meltdown, the credit report data Experian hosts show that the vast majority of people continue to meet their credit repayments. The average Experian Credit Score – which is a guide you can get with your own credit report – is 783 out of 999* and this has increased steadily over the past few years. However, it’s clear that many people are worried about repaying their debts and, from the increasing workload of free debt advice providers like Payplan, that more people are seeking help.

If you’re in this boat, you might be considering a Debt Management Plan (DMP) to help get your debts under control. The state of your credit rating is likely to be way down your list of priorities, but you might still wonder what effect a DMP will have on your creditworthiness.

DMPs aren’t themselves registered on credit reports, but lenders can add a marker to your credit agreements to show you’re repaying your debts using a DMP. They can only do this for debts that haven’t already defaulted (see below), to demonstrate that you are proactively repaying your debts at an acceptable level.

The DMP marker should show your old and new monthly payments. Unfortunately, the monthly updates your lenders make will usually show the accounts falling into arrears (i.e. you getting behind with your original repayments). But as long as you keep up the new payments through your DMP, the arrears registered on your credit report will never exceed six months and, importantly, each account will stay out of default. Defaulted accounts show that the lender/borrower relationship has broken down, which is very bad news for credit scoring.

Once you complete your DMP, each account can either be returned to good order or closed, in which case it will stay on your credit report for a further six years. Credit assessment tends to focus on your most recent credit history and should take account of the age of any late payments, plus the fact that they occurred while you were taking positive steps to deal with your debts.

You can add an explanatory statement (a ‘notice of correction’) to your credit report and you could use this to explain why you got into difficulties in the first place. You could also use this to flag up a current DMP if your debts have already defaulted, or will default because you are only able to make very small repayments. There is guidance on how to word your notice on the Experian website.

The key issue is that, if you stick with your DMP, you’ll be back in control of your debts. And no matter how severe a credit scoring hangover you are left with, time is a great healer and your credit record will soon recover.

*www.creditexpert.co.uk – January 2012

Filed Under debt advice, Debt News, Guest Blog  |  Trackback  |  Leave a Comment

Next Page »