Regular debt management blog readers might think I have a bit of a dim view of high street banks which isn't really the case, but its not easy  to show them in a good light when news such as this keeps on appearing!

Both the Lloyds Banking Group, and RBS have received large sums of money from the UK taxpayers over recent monthstotalling £60bn.  The UK government now has a controlling stake in both banking groups.

So it may come as a kick in the proverbials to many consumers in the UK struggling to find decent mortgage deals, that both banks offer much cheaper deals in The Republic of Ireland! RBS offer similar products both here and in Ireland, at a cost of 2.95% in Ireland, and 5.99% in the UK!

Its not just debt management clients that are affected, the whole UK housing market could benefit from a boost, and the sort of rates being offered in Ireland could go a way to helping that boost materialise.

If you are feeling the pinch, and in need of debt help or advice, then call MRA Debt Help on 01424 777156, where one of our debt counsellors will be happy to help.

The Royal Bank of Scotland has this week been ordered to drop reposession and debt collection proceedings against a family from Hastings.  The Financial Ombudsman Service (FOS) has ruled that RBS was unfair in its attempts to regain the loan to the Addyman family, after they had kept up to date with all their payments.

The Bank informed the Addyman's last september that it intended to reclaim the debt, and that the family should arrange a remortgage or face repossesion.  The Addyman's had no arrears, and it would seem that there was no reason for the Bank to take this stance.

The FOS has ruled that it was "not satisfied" by RBS' explanation of the case, and that the Bank had not treated the family "fairly or reasonably''

Claire Mortimer, the ombudsman, judged that RBS had caused a "serious amount of distress and inconvenience" and ordered RBS to cease the repossesion and pay compensation to the Addymans

You may remember me talking a little while ago about 1st Credit, the debt recovery agency.  Now, im not one of their biggest fans, which means I was very pleased to find out more information on them!

It seems that the OFT investigation of them, prompted by complaints by the CAB and CCCS, has had wider repercussions for the unscrupulous debt recovery firm.  HBOS, has announced tha it stopped selling its debts to 1st Credit at the end of last year, and Citigroup followed suit soon after, ending its agreement in January. 

Citi would have been a large source of income for 1st Credit, as they owned Egg Banking, with a 6% share in the UK Credit card market.  HBOS would have been extremely valuable to 1st credit too, as the biggest mortgage provider in the country. 

This is good news for debt management clients and debt counsellors, who now have a much reduced chance of dealing with 1st credit.

If you have had problems with 1st credit, or have any debt problems, then call MRA Debt Help on 01424 777156 to speak to one of our debt counsellors.

Reporters in wales have recently found rersearch suggesting that the most indebted among us are paying the most for services including credit cards, loans utilities and telephone contracts.

This is the sot of thing that financial inclusion organisations such as Transact are trying to change.  To some it may seem obvious that poor households, as well as those facing debt management or similar debt solutions are charged more for services due to being a higher risk, but are the charges really proportionate to said risk?

Save the Children, and the Family Welfare Association are among those heading the research into the cost of being a 'high risk'.  They have found that poorer households are paying approximately £1000 per year more than low risk consumers. 

The Welsh assembly has acknowledged that something needs to change, particularly as 23% of the welsh population live below the poverty line. 

If you are struggling, and in need of debt advice, the call MRA Debt Help to speak to one of our debt counsellors on 01424 777156

In the UK, the debtors act 1869 abolished sending people to prison for being in debt, yet the United Nations Human Rights Comittee is still recommending that The Republic of Ireland does the same.

A recent report in Ireland by the Free Legal Aid Centres (FLAC) has found that Irish citizens are more likely to go to jail for non-payment of debts to Credit Unions than the major banks.  Yes you read right, Jail!  1000 people have been incarcerated for this reason in the last 5 years, with an average 21 day spell in prison.   The longest spell was 90 days for "non-payment of debts to banks or other financial institutions".

The debtor can qualify for early release if they make a full payment whilst in prison.  If they do not pay, then on release from prison, the debtor still owes the debts.

Luckily, here in the UK, it appears that we decided that this wasn't a particularly useful solution to debt problems 140 years ago! 

For free, unbiased debt advice, call MRA Debt Help on 01424 777156 to speak to one of our debt counsellors

Yesterday saw the official introduction of Debt Relief Orders in the UK.  Eagerly anticipated by insolvency practitioners all over the country, they promise to add an extra debt solution for those facing bankruptcy.

A debt relief order will be available to those with debts of below £15,000.  Other stipulations include a maximum disposable income of £50 per month, and assets of less then £300. Debt relief orders are not available to homeowners. 

Many insolvency practitioners have viewed DRO's as a replacement for debt management plans, yet with so many differences between them it is easy to see how they can work in conjunction with each other. 

Some clients will feel at ease with the formality of DRO's.  If all the criteria are met then the client could be free from their debts at the end of the period (which will normally be 12 months).  The order is binding on most creditors, giving the client a break from any enforcement action by those creditors.  The formality does however have some drawbacks.  The debtor may not be involved with promoting, managing or forming a ltd company, and can only enter one DRO every 6 years.  If then debtor is dishonest or otherwise at any fault, then the official reciever can increase the restrictions for up to 15 years.

Some clients however will prefer the flexibility of a debt managment plan.  It may not be legally binding on the creditors, but a reputable debt management company will have built up good relations with many of the creditors.  A debt management plan may also last longer, but there are no official limits on income, assets, or total debts, and the client does not have many of the restrictions associated with bankruptcy or debt relief orders.

As you can see there are pro's and con's for both debt solutions, and speaking to one of MRA Debt Help's debt counsellors on 01424 777156 can help you decide on which is the more appropriate solution for you.

The Taxpayers Alliance have spent many many man hours compiling a list of the greediest Town Hall workers in the country.  The Town Hall Rich List 2009 is a 137 page document detailing the salaries and other payments made to the highest paid staff.

The list is obviously an embarrassment for many councils, as even after receiving requests under the freedom of information act, a few decided not to disclose any details.  1022 local authority staff are now earning in excess of £100,000 - at a time when council tax increases are becoming an even more bitter pill to swallow. 

Heading up the town hall fat cats is Wakefield Chief Executive John Foster.  Leaving the council was a shrewd move for Mr Foster, as his £10,000pa wage increase was boosted by £345,000 'other' payments on leaving in March 2008. 

With 5 other staff on the Town Hall Rich List, Wakefield Council was embarrassed enough to be one of the councils that refused to give exact figures or even names of its staff, instead opting to give wage brackets. Spending an estimated £920'000 on its top 4 staff for the 2007-8 tax year is an insult to its constituents. 

If you are having troubles with any form of debt, including council tax arrears, then call MRA Debt Help on 01424 777156, where one of our debt counsellors can help you find the right debt solution for you.

Last week an agreement was reached between the Credit Services Association and the government regarding the new 30 day rule.  The CSA (not to be confused with the other CSA, who sort out child maintenance payments - why cant organisations choose different acronyms!) represents debt collection agencies in the UK.

The 30 day rule introduces a cooling off period, where, if a debt collection agency is informed that the case has been referred to a debt management company, then they will allow 30 days for the debt management company to take control.

It is hoped that this will give the debtors, and debt counsellors breathing space to work on the account and arrive at the best debt solution for the client without being bombarded by debt collection agencies.

Kurt Obermaier, who is the Executive Director at the CSA said "We have an agreement to allow a 30-day breathing space in the hope and expectation that this will ease the pressure on the debtor and more likely result in a positive outcome for all."

Debt collection agencies will now have to inform people of how to get help from debt advice services. 

How much notice the debt collection agencies take of this new ruling is yet to be seen, but we can hope that this will result in less stress and bombardment from them on the debtor.  However, after having seen some examples of debt collection agencies blatantly flouting current legislation, I hope I'm wrong in thinking that the ruling will make no difference until the industry is properly regulated. 

If you are struggling with debt, call MRA Debt Help on 01424 777156 to speak to one of our debt counsellors

I know, I know, March's statistics from Creditaction didn't quite make it onto this blog for some reason, but I'm going to make amends with an extended look at Aprils debt management statistics.  Regular readers of this blog will know that we like to keep an eye on creditaction and their regular updates on the state of the debt nation.

So, with interest rates plummeting, more institutions falling, more job losses, and the country officially falling into a recession, how has this affected the debt statistics?

UK Personal Debt

The total personal debt owed by the nation at 28th February was £1458bn.  This is an increase of £34bn, but does show a slowdown, as the amount increased by £116bn during January.  Lending has also slowed recently, with Unsecured lending slowing by 3.4%, to £231bn.  Secured lending also slowed by 0.5%, leaving a total of £1227bn.  Consumer credit lending actually decreased by £200m.  Total lending grew by £1.3bn in February, compared with an £8.4bn growth in January.

The average owed by every household that has some form of unsecured credit is £21640, with the total interest repayments reaching £72.8bn in the UK for the last 12 months.  Thats £199m every day!

Unemployment

3% of people in work are estimated to become unemployed during 2009.  In the 3 months to January 2009, 2915 people were reported to have been made redundant every day.  2.029m people are reported to be unemployed, the highest since July 1997.  This is expected to rise to 2.9m

Consumer Credit

33600 credit applications have been turned down every day in the past 6 months.  People are less and less able to service their debts, with 35% being able to commit to a debt management plan in 2008, compared with 42% in 2007 and 46% in 2006.  The numbers of affluent households seeking debt advice has risen, with the CCCS reporting that 12% of enquiries were from households with incomes over £30000.  The average credit card interest rate is 17.92% - 17.42% above base rate.  According to the BBA, the proportion of credit card balances bearing interest rose 74.2% in January 2009.

Housing/Mortgages

The average house price for a first time buyer had decreased to £138089, an annual decrease of 15.4% in January 2009.  The typical deposit for a first time buyer was 24% (£23280),  the largest on record.  The Council of Mortgage Lenders estimate that 205 properties will be repossessed a day throughout 2009.  304 landlord possession claims will be made every day, and 500000 buy to let mortgage holders are estimated to be in negative equity. 

If you want any form of debt advice, then call MRA Debt Help on 01424 777156 to speak to one of our debt counsellors.

A CCJ, or County Court Judgement, is an order from the County Court to repay a debt owed by a debtor.  It is either an amount agreed by the creditor and the debtor, or if they cannot agree, then the amount is set by the court. 

The CCJ is set up following a County Court Claim.  A County Court Claim is made in writing by a creditor to the court in order to reclaim the money owed.  If the debtor pays the amount outstanding, they can avoid a hearing or judgement.  If they don't then there will be a private court hearing.  The client does not have to attend, and can send the information required by post. 

The court will send the debtor a 'Claim Form'  which gives details of the amounts that the creditor says that they are owed and any further details.  They will also enclose an Admission Form, which the debtor can use to detail their income and expenditure, and make an offer to repay the debt.  The debtor has 16 days to do this.

The debtor can pay in full, and must remember to include the court fees in their payment.  They can also request to pay the amount back in installments, and send back the admission form directly to the creditor/claimant.

They can dispute the amount owed, by filling the Admission Forms part N9A and N9B and returning them to the court within 14 days.  The debtor can defend against the claim if they wish, and/or ask for more time to respond.  The debtor can also make a counterclaim against the debtor if they feel that they are owed money that they could offset against the claim.  Responding with an admission or defense is free, but the debtor may be charged for making a counterclaim. 

If there are judgements from more than one creditor, the court can combine the debts into an administration order, requesting a single payment to be shared out amongst the creditors. 

If you have recieved County Court Claims, or are in need of any form of debt help, then call MRA Debt Help on 01424 777156 to speak to one of our debt counsellors.