Recently in Debt Counselling Category

In a worrying statement, Provident Financial revealed to the Daily Mail (my favourite harbinger of doom) this week that they are now receiving 2700 applications every day for their Vanquis Credit Card. 

The Vanquis card is a sub prime credit card, aimed at consumers with bad credit ratings, and potentially high existing debts.  The Vanquis card has a 'typical' APR of 39.9%, nearly double that of the uk average.  This however is their 'headline' rate, with APR's rising to 59.9% if they think you're particularly risky to lend to. 

Provident have approximately 426,000 customers on Vanquis cards and has rejected around 830,000 applications.  The fact that consumers are that desperate for more cash is the worrying factor.  It would be quite reasonable to suggest that many of these consumers would be better off tackling their existing debts and getting free debt help, than taking on more credit.

If you are considering applying for a Vanquis card or even a Payday loan to keep up repayments with other debts then call MRA Debt Help for free debt advice.  MRA can offer you the best solution to your debt problems, whether it be Debt Management, Bankruptcy, or even just better budgeting!

The Bank of England collates figures on the amount of debt that is written off by Lenders.  This year has seen the figures reach a record high with nearly £10bn of lending to individuals written off over the course of 2009.

Bad debts on credit cards were actually down in the last quarter of 2009, but loans and overdrafts saw a jump of a third, up to £1.36bn

In the last 3 months alone, over £6bn of debt was defaulted - the highest level since records began in 1993.  Lenders recorded a loss of £4.12bn of credit card debts that will never be repaid. 

This loss could be partially attributed to the way in which debt management companies are able to negotiate with the lenders on behalf of our clients.  Free debt management companies do not often offer the service.  MRA Debt Help have forged good relations with many lenders and can negotiate with your creditors, not only to set up your debt management plan, but also to negotiate settlement figures if your circumstances change. 

To speak to an independent debt counsellor for free debt help and advice, call MRA Debt Help on 01424 777156.

A recent consultation document by the Ministry of Justice could make some important changes for debtors in the UK, including debt management clients.  The document centres around charging orders, specifically the order for sale that may follow.

The Ministry of Justice is looking to impose a minimum level of debt for which a creditor can ask for an order of sale.  There are a small number of charging orders that result in an order for sale, but the MoJ expect this to increase due to the current economic situation. 

The MoJ are looking to ask whether people think that there should be a minimum level of debt before an order for sale can be issued, to act as a further safguard against debt management clients with smaller credit card debts (as an example) losing their homes. 

The consultation ends on 30 April 2010, and offers several solutions to the potential problem including removing CCA (consumer credit act) debts from orders for sale completely - which would be seen as unworkable.  Introducing a limit appears to be the favoured option, and one that lenders and debt management clients would be equally at ease with.

It has been widely reported that the numbers of people seeking free debt advice has continued to rise over the past few months.  The CCCS, CAB and National Debtline have all reported an increase in the numbers of people waiting to see their advisers, leading to an increase in waiting times.

During the same period, it has also been revealed that the number of Britons dipping into their overdrafts has decreased.  Moneysupermarket.com released the information based upon surveys it has conducted. 

12 months ago it released figures stating that 17% of people it surveyed were permanently in their overdraft - even after their salaries had been paid in.  A further 52% of people had used their overdraft in the previous year. 

The latest update to these figures has been released, and reveals some encouraging facts.  The number of people who said they are permanently overdrawn has decreased to 10% - with a further 12% that have used their overdraft facility within the last year.

It is possible that this reduction could be down to the numbers of people receiving free debt advice from companies such as MRA Debt Help and organisations such as CCCS.  MRA Debt Help can offer you free debt advice and aid you to make the right decisions to get out of debt.

Moneyfacts have revealed this week that the average credit card interest rate is at its highest in over 10 years.  This comes despite the Bank of Englands base rate being at its lowest ever, and staying at this rate since March 2009.

The current level of credit card interest rates has not been seen since 1999, at a time whrn the Bank of England base rate was 6%.  Average credit card rates are now a whopping 18.8%.

Customers with £5000 of credit card debt would, on average, be repaying £2289 more than 3 years ago if they only maintain the minimum payment.  The renewed tightening of lending criteria has meant that customers have not been able to switch to 0% offers in the way that they were used to.

The news also comes a week after Capital One sent letters to their credit card customers informing them of a doubling in their interest rate - from 8.01% to 15.31%.

Customers who are struggling to make repayments on their ever increasing credit card debt should seek debt help asap.  Free debt advice from MRA Debt Help can offer solutions to your debt, and help you work towards becoming debt free.

The recent rise in people asking for debt help from organisations such as the CCCS has lead to a rise in waiting times to see debt counsellors face to face.  But this rise has come at a time when repossessions have dropped.

Unsecured debts, such as mortgages have serious repercussions if the payments are not met.  It is possible that not keeping up with repayments on a mortgage or other secured loan can lead to your property being repossessed.  The number of Britons facing repossession over the last quarter of 2009 dropped, and was lower than the Council of Mortgage Lenders (CML) expected.

10,200 properties were repossessed by lenders in Q4 2009, showing a 13% drop from Q3 2009.  The numbers of voluntary repossessions - where the homeowner has given back the keys, also dropped - from 3400 to 2500. 

The Ministry of Justice cover legal proceedings to repossess homes, and according to their figures not only did the number of mortgage possession claims reduce, the number of claims that resulted in an order being made reduced too.

The increase in Britons seeking debt management plans may have contributed to this drop.  Tackling your unsecured debt, and spending time creating a proper income and expenditure form can help you to prioritise your expenditure - and keep up to date with your mortgage repayments.

Debt management plans are one of the debt solutions available from MRA Debt Help.  For more information call 01424 777156 to speak to one of our debt counsellors.

Wednesday saw a press release by the Consumer Credit Counselling Service regarding fee charging debt management companies.  The press release extolled the virtues of free debt management, and cited price comparison website moneysupermarket.com as supporting their views.

Moneysupermarket.com's article in question is an unbiased and highly educational one, and one that MRA Debt Help support fully.  The CCCS press release touched on a couple of comments by the price comparison site, without acknowledging the entire story.

The original article provided a structured and informed breakdown of the pros and cons of free debt management vs fee charging debt management.  The article highlights the obvious benefits of dealing with a free debt management company, whilst also reminding consumers of the different benefits of using a fee charging debt management company.

Moneysupermarket say -

"Unfortunately, many of the free advice agencies are facing significant backlogs as debt problems mount, with CAB claiming to deal with an average of 7,241 new debt problems every working day and people in some areas having to wait up to three weeks for an interview.

By contrast, fee-charging debt management companies can often deal with problems quickly and the advantage they offer is that they administer payments for you - you pay your money over to them and they pass it on to your creditors. You will be charged a fee for this service - typically in the region of 15% of your regular payment. However, some debt management companies may be able to negotiate better terms with your creditors which could mean the fee is worth it."

MRA Debt Help do charge a fee for administering your debt management payments, and  maintain that our services are a worthwhile investment.  Our negotiation rates are an indicator of our worth to our debt management clients.  It is not uncommon for us to achieve a discount of over 50% to make a full and final settlement towards our clients debts. 

MRA Debt Help would NEVER recommend a debt management plan to a client who would not benefit fully from our services, and as such have referred many clients to the CCCS, National Debtline and local CAB offices when their services would be better suited.

There are fee charging debt management companies in the industry that sadly take huge sums as upfront fees.  MRA Debt Help take one initial monthly payment to cover our costs in setting up your debt management plan, and 1.765% of your debt per year, spread over your future monthly payments.  MRA Debt Help fully support moneysupermarkets warnings to steer clear of debt management companies that wish to charge more than this.

Other unscrupolous debt management companies may try to charge you for debt advice.  MRA Debt Help will NEVER charge for debt advice.  All of our debt help and advice is FREE, we only make administration charges for our debt management plans. 

You can be assured that if MRA Debt Help are prepared to help you, then we firmly believe we can offer you the fastest, most effective way to become debt free. 

News broke yesterday of the struggle faced by Debt Advice Charitites to cope with demand for their services.  The Times and The Telegraph both ran stories with information from the National Audit Office about the Free Debt Management Charities.

In the report, the National Audit Office revealed that some Britons struggling with their debts are waiting up to a month for debt advice from the charities, leading to opposition MP's calling the government led initiatives "a triumph of bureaucracy over practicality".

MRA Debt Help are proud of our speed and skill at providing debt advice, and our unique position in being able to negotiate early settlements.  Unlike the free debt management charities, we are able to offer you free debt advice from the very moment you contact us, whether it be online, by telephone or face to face.

Very often when people come to us with debt problems, we have to act as quickly as possible in order to offer the best possible solution for them.  Waiting a month for debt help is often a luxury our clients do not have!

If you are struggling with debts and want free debt advice NOW then call MRA Debt Help on 01424 777156 or fill in our budget form.

How did I miss this!  Back in August a blog called 'online debt consolidation' published a post about making the most of the Car scrappage scheme.  All sensible so far then, if someone is going to give you £2k for a car thats only worth a few hundred, then it makes sense.

Thats where the sensible comments stop though!  All the time I've been writing this debt management blog, I never would have thought I'd see a supposed debt consolidation advice website suggest that someone go and buy a BMW, and remortgage their house, just to take advantage of the car scrappage scheme!!!

The first thing that struck me was that a debt based informative site would suggest spending money on a new car.  I di some research, and the cheapest 3 series BMW is currently £22155 otr.  So, they are suggesting that people suffering with debt problems, paying off debt management plans or living with IVA's should go and blow £20k on a car.  Brilliant.

I then looked at the 'benefits' of spreading the cost of the car by adding it to your mortgage.  So, to start with you've got your £2k scrappage money, so we'll take that off.  £20155 to add to your mortgage then.  Lets have a look at how much that would cost If we remortgage over 25 years, and get a pretty good rate at the Nationwide at the moment of 4.5% APR.

Borrowed - £20155

Timescale - 25 years

APR - 4.5%

Monthly repayment - £112.03

Interest - £13453.41

Total paid - £33608.41

In a nutshell, it would cost you £13453.41 over the period of your remortgage to save yourself £2000 in scrappage.

Doesn't sound so brilliant now, does it!  Most of our debt management clients, and people that come to us for debt advice understand that when times are tough, and the debts are building, buying a brand new BMW isn't really on the agenda.  But there are some that would fall for this ever so slightly flawed advice.

If you are struggling with debts - don't buy a BMW, call MRA Debt Help to speak to one of our debt

Debt Management plans could hold the key as more and more Small business owners across the UK are resorting to personal insolvencies to keep hold of their businesses.  CreditPal and the Forum of Private Businesses have both corroborated official figures that suggest the trend.

Credit Cards, personal savings and loans from friends have all been used by small businesses to keep their company afloat.  This has lead to a rise in personal insolvencies, due to the business owners being unable to keep up repayments on the personal debts taken out for business reasons.

41% of those surveyed by the Federation of Small Business said that they had used personal savings to fund their business, with 43% using overdrafts and 21% using personal credit cards.

15% of business owners had sacrificed family holidays, and many have raided pension funds in order to make their debt repayments.  Free debt advice from MRA debt help would point business owners in the right direction, and offer a suitable means of getting out of debt.