debtsupporttrust

The festive season is often a time to celebrate with friends and family, but it’s also an expensive period which can lead to long term debt problems.

At Debt Support Trust we help people with a wide range of debt and money problems. These money problems can be anything from problems paying their rent, through to the most severe financial predicaments.

The Christmas period is often a time for celebration, but come January it can be a depressing and frightening experience being in debt. If you’re already in debt and want to wait until Christmas has passed before dealing with your debt, then Debt Support Trust can help you too.

Avoiding Debt Problems

The desire to meet Christmas expectations means people can become indebted over the Christmas period. We notice an increase in the number of people using payday loans to buy Christmas presents, however they don’t know how they will repay the loan in January.

When the payday lender – or any other company lending money – doesn’t receive their money back on time then they will continue to contact you until they get their money. It can also impact on your credit file.

Our top 3 tips to help you have a great Christmas financially are:

1. Budget: Set a budget of what you can afford. The budget should include extra Christmas nights-out and presents too. This way you’ll know exactly how much money you have available to spend.

2. Buy in advance (if possible): When you leave shopping until the last minute you may know what you want to get your loved ones, but the cheapest shops may have sold out. Buying in advance means you can get the cheapest prices.

3. Shop around: You should shop around for the best price. The high street is in competition with the internet and often the price will vary. Look around and check if you’re really getting the best price.

The most important tip is not to spend what you can’t afford to easily repay. The majority of people in the UK use credit, but it’s whether that credit is affordable that really matters.

Call for Debt Advice

If you’re unsure how you will afford to repay your Christmas spending, or think that you may have debt problems early in the New Year, then speak to a Debt Support Trust advisor.

You can phone Monday to Friday 8am – 7pm on 0800 085 0226. Alternatively, you can complete a debt test questionnaire and get some online debt help.

New changes to the way Scottish Trust Deeds are administered have been introduced for people with debt problems. For people thinking of entering a Trust Deed in Scotland, there’s good and bad news.

The role of the AiB in Scottish Trust Deeds

The Accountant in Bankruptcy is a supervisory body which monitors the Trust Deeds registered in Scotland. The Accountant in Bankruptcy has been working to change how Protected Trust Deeds are administered.

The changes have meant the length of time a Trust Deed lasts is often extended. Who can enter a Trust Deed and how much unsecured debt is outstanding has changed too.

So, what are the Trust Deed changes?

We mentioned in September about the impending changes to Trust Deeds but there have also been some extra surprises.

We expected that Trust Deeds would move from a 3 year to a 4 year debt solution. This excludes people who are entering an equity only or lump sum Trust Deed. Protected Trust Deeds will now be assessed on the Common Financial Statement too.

The AiB will have more powers to reject Protected Trust Deeds which are not in the best interests of the person in debt. A 4 year Trust Deed, when a 4 year debt arrangement scheme would be more suitable, for example, would mean the trust deed would be rejected by the AiB, even if the creditors said yes.

Trust Deeds in Scotland are advertised in the Edinburgh Gazette, however the changes mean there is no need to advertise the Trust Deed any longer. Instead, a person entering the Scottish debt solution will automatically be listed in the Register of Insolvencies (ROI). This debt advice Scotland solution is only applicable if you’ve been in Scotland for the past 6 months.

The fees for the Insolvency Practitioners will change too. An Insolvency Practitioner will have to work on a nominee fee and then a supervisory fee. The supervisory fee will mean they will receive a percentage of what’s recouped, instead of a flat fee. This should mean the creditors get more of the money back.

I’m in a Scottish Trust Deed, what will happen?

If you’re already in a Trust Deed you don’t have to worry about the recent changes, as it’s only impacting people moving forward.

Anybody entering a Trust Deed from today onwards will be in the solution for 4 years, instead of 3. However, it’s not all bad news as people can enter a Trust Deed if they have £5,000 of unsecured debt or more, instead of the typical £10,000.

The changes to Scottish Trust Deeds is an interesting development and certain to allow increasing numbers to enter a solution to resolve debt problems. There are also other debt solutions for people in debt, such as a debt arrangement scheme or sequestration.

We help people in debt across the whole of the UK with telephone and internet based support. For debt help from Debt Support Trust please call 0800 085 0226.

When debt problems occur people we help don’t want pity or sympathy, they want advice, guidance and above all else, a debt solution which will help get debts resolved.

To resolve debt worries we start by introducing our debt advisors. Our debt advice team listen to financial problems so they can provide debt solutions which can help you become free of debt. Everybody we help with debt problems receives tailored debt support.

How to Become Debt Free

There are various routes to become debt free, from debt consolidation to bankruptcy. There is always a way out of debt problems, but the best route depends on your personal and financial decisions.

Some debt solutions can help you become debt free within 1 year, while others can take 10 years, or more. The route to become debt free, which will be best for you, will depend on your financial situation. Your income and expenditure will inevitably determine how much disposable income you can afford to repay towards your debt each month.

Borrowing money and repaying that money can be easy at first, but if change happens, such as loss of employment or an over reliance on credit, then it can be impossible to repay the debt on time. When you speak to Debt Support Trust, we don’t focus solely on what you have to contractually pay but instead what you can afford to repay.

Once we understand what you can afford to repay every month and how much unsecured debt you have we discuss your assets. Your assets can include a house, car, money in your bank, stocks, shares or bonds, as well as other assets with value. We consider whether there is equity in any of your assets. Equity is the difference between the value of your asset (e.g. your house) and what’s outstanding (e.g. the mortgage). Depending on your debt solution, your property may not need to be included. Your debt advisor at Debt Support Trust will be able to explain what will happen with your debt solution.

Get Debts Resolved

The first step to resolve debt problems is to seek professional debt advice. You can speak to Debt Support Trust on 0800 085 0226. Our charity debt advisors will help you resolve your debt problems and regain control of your finances. We caringly listen to your problems and offer practical advice. You can decide whether you wish to proceed with our advice, or not.

To get debt help from Debt Support Trust, please telephone our advice line on 0800 085 0226.

In the last year there have been 10,000 homes repossessed in the Greater Manchester area. This is a direct result of debt problems in Manchester people struggle with.

There are debt solutions which can help people in debt keep their house and resolve debt, like credit cards and overdrafts.

Repossessed Homes in Manchester

Repossessions occur when the mortgage repayments are not met on time. A secured debt, like a house is a priority expenditure and should be paid before unsecured debts like a credit card or overdraft.

The Council of Mortgage Lenders statistics reveal 7,700 properties were repossessed in the 2^nd quarter of 2013 and that over 157,000 mortgages are in arrears too.

Repossessing a house is usually the last stage for a mortgage lender. The mortgage provider will often refer you to a charity to get debt help first, as long as they are aware of your financial problems.

If your property is repossessed and then sold, the mortgage will be repaid first, then the fees for repossession. If there is any money left you will be given this back. Should your property be in negative equity then any shortfall on the property will be passed onto you as an unsecured debt.

Contact Debt Support Trust if you would like debt help from a registered debt advice charity.

Manchester Bedroom Tax Debts

In Manchester, the bedroom tax is also impacting on people’s ability to live in rented accommodation too. The under occupancy tax on social housing means people are receive 14% less housing benefit for 1 extra room and 25% less for 2 extra bedrooms.

The shortfall in housing benefit for people claiming the state support means arrears are rising. Housing associations and social landlords are being forced to take action, including eviction.

The bedroom tax means debts continue to rise for people who can’t move property and don’t have the available income to pay the shortfall.

Property Debt Advice

Whether you live in a rented or mortgaged property, Debt Support Trust can help. We’ll assess your financial situation to understand what you can afford and provide a range of advice, tips and debt solutions.

You can receive support by telephoning 0800 085 0226 or completing our debt test below and asking for a call back.

An IVA is a debt solution for people with debts above £10,000 of unsecured debt to two or more creditors. Contacting an IVA helpline can be a route to enter an IVA, however it can also mean you miss out on other debt solutions, which may be more applicable.

Debt Support Trust and our UK charity advisors provide a full range of debt solutions, from general debt and money advice, through to IVAs and Bankruptcies.

Our advice team is trained to provide helpful tailored advice regarding all applicable debt solutions you could be suitable for.

IVA Helpline

When you contact an IVA helpline, that only recommends IVAs, then other debt solutions can be overlooked. Our not for profit advisors focus on empowering you to make an informed decision so you can decide which debt solution is best for you.

To do this you can complete a debt analyser to get in touch, or call 0800 085 0226.

We don’t solely focus on IVAs, although it is one option we discuss with you. There is also debt management plans and other informal arrangements. In some instances, bankruptcy is the best debt solution, which our advisors can explain too.

Some IVA helplines solely focus on IVAs when other solutions may be more appropriate. It’s our intention to ensure you get every available advice. Once you’ve received the advice you can ask your debt advisor as many questions as you wish to help you determine which debt solution is best.

The Importance of Debt Advice

There are 5 top reasons to speak to a charity before entering any debt solution, such as an IVA

1. Confidential: We never share information with anybody else without your permission. Our telephone calls are confidential.
2. Qualified advice: The debt advice team is trained to a high standard in debt advice and are extremely knowledgeable about debt solutions.
3. Full range of advice: We include every available option to understand which debt solution is best. We offer you every possible option so you can decide which option is the best.
4. Not for profit: Debt Support Trust is a charity providing debt advice on a not for profit basis.
5. Quick: You don’t have to wait in a queue to speak to Debt Support Trust. Our debt advice team is available to help across the UK between 8am and 7pm Monday to Friday. Our debt analyser can provide online advice instantly.

Debt Helpline

Our debt advice charity helpline provides support on every debt solution including debt management, IVA and bankruptcy, among others.

You can telephone our charity helpline on 0800 085 0226, via email contact@debtsupporttrust.org.uk or with our debt analyser.

All advice is confidential and the final decision on your debt solution remains your own.

A payday loan or short term loan can often seem like the perfect financial solution to relieve a problem quickly. However, when the situation changes then repaying the payday loan can be difficult and help may be required. Payday loan help from our charity, Debt Support Trust, is confidential and supportive to help you resolve outstanding short term loan problems.

If you would like to speak to a debt advisor about your payday loan, please call us on 0800 085 0226 or complete our debt test.

Help with Payday Loan Debt

A payday loan is generally a high interest short term loan. The interest rate can be as high at 5,000% APR. Failing to repay a payday loan can mean the loan spirals out of control and a £300 debt can easily reach £2,000 – £3,000 very quickly.

If you are unable to negotiate with your payday loan provider then speaking to a charity can often provide you with opportunities to gain valuable advice. We will listen to your complete personal and financial situation, including any other unsecured debts, like credit cards, overdrafts and store cards etc.

Once we understand your situation we can provide you with all your options and help you with your payday loan debts.

Payday Loan Help Advice

Our charity advisors are specially trained to help with payday loan debts. The short term loans can often increase the quickest, particularly when payment isn’t being made.

Payday loan companies may encourage you to rollover your debt into another loan, however this may not resolve the fundamental problems. Our charity advisors will be able to guide you along the process to resolve your payday loan debts. If you have other debt problems then you may be applicable for a debt solution, or perhaps a token payment agreement will be the best option.

By speaking to our charity advice team you can receive help and support in dealing with payday loan providers.

Debt Advice on Payday Loans

All advice provided by Debt Support Trust is confidential and qualified. It usually takes 15 minutes to understand your financial and personal situation so we can give you specific advice tailored to your situation.

Our advice team is available on 0800 085 0226 or alternatively you can email our advisors on contact@debtsupporttrust.org.uk

If you would prefer to simply ask a question about your payday loan debt you can also use our Debt Advice Forum.

On occasion, a debt solution can change from its standard approach and be adapted to meet a specific person’s situation. It’s for this reason that a “one-size fits all approach” doesn’t work when giving debt advice. This can be demonstrated with a lump sum Trust Deed or IVA. This is also known as an equity only IVA or Trust Deed.

The lump sum IVA and Protected Trust Deed is a one off payment plan when a sum of money is used to repay outstanding unsecured debts. This usually involves offering creditors an asset, like equity from the sale of a house or redundancy money to settle the debts.

Lump Sum Debt Solutions

A one-off payment is only suitable for people in specific situations, such as people who may have an asset, but have recently became unemployed.

An IVA usually lasts for 5 years and a Trust Deed is typically a 3-4 year debt solution in Scotland. However, this is because a monthly contribution is required for the fixed period of time. At the end of the solution any remaining debt is written off.

Some people may not be able to contribute each month towards their debt because of ill health or redundancy, however, they may have a lump sum available. This money could be proposed towards the creditors as a full and final offer.

For example, if £30,000 is owed to 5 different creditors and a person were to be ill and unlikely to return to work, but they had £10,000 in their bank, then a lump sum debt solution could be proposed. The full and final offering would be similar to the traditional IVA and Trust Deed; protecting a person from their creditors, however it wouldn’t usually last as long. Often a lump sum IVA or Trust Deed would last up to a year before the solution is closed. This is a Scottish debt advice solution only.

Informal Lump Sum Debt Plans

If you only owe one or two creditors then you could consider writing an informal payment plan to each of your creditors. Your creditors may be more willing to accept the plan because in the IVA or Trust Deed the Trustee will take a percentage of the money for managing the solution.

You should speak to our charity debt advisors if you would like help putting a lump sum informal payment towards your creditors.

You should offer creditors a pro-rata amount of your lump sum and agree to the plan once every creditor has responded in writing. The payment should be confirmed in writing that it will be a full and final settlement, with the remainder of the debt being written off.

Hot Points

There are some hot points to remember with an equity only debt solution.

Remember,

1. If you can afford to make a monthly contribution then your Trustee in the IVA or Trust Deed will still want you to contribute this.
2. Some people borrow money from friends and family in order to do the lump sum solution. Ensure you get debt advice before proceeding with this as bankruptcy may be a better option.
3. If you make the lump sum payment, but then your situation improves while still in the IVA or Trust Deed, you could be asked to pay a monthly contribution for the remainder of the debt solution.
4. The reason the IVA or Trust Deed closes early in a full and final solution is because all assets and contributions have been gathered in. If the Trustee believes there is other assets they will have to investigate these too. For example, it’s the Trustees responsibility to check the PPI has been claimed and, if appropriate, returned to the creditors.

If you would like debt help on lump sum IVAs or full and final Trust Deeds please contact our charity on 0800 085 0226.

Alternatively you can ask any IVA questions you have in our Debt Advice Forum where our advisers are on hand to help.

Statistics released by the Insolvency Service show that bankruptcies in England and Wales have declined by 21% compared on the previous year. Year on year bankruptcy insolvency solutions have declined including debt relief orders (a cheaper route into bankruptcy).

However, IVAs increased in the last three months, compared to last year by 5.7%. The number of Individual Voluntary Arrangements (IVAs) increased to 13,394.

Number of People Entering Bankruptcy

The number of people deciding to enter bankruptcy to resolve their money problems still remains high, however the figures do continue to fall.

Bankruptcies in the last three months were 6,004 (21.4% less than the same time last year) and 6,632 debt relief orders (14.7% less than the previous year). The debt relief order is a route into bankruptcy costing £90, instead of the usual £700.

To enter a debt relief order a person must meet a specific criteria, otherwise they will have to enter bankruptcy via their local court. The number of court bankruptcies are falling but the debt relief order route is becoming more popular.

Bankruptcy Alternatives

There are solutions which are alternatives to bankruptcy, which many people may be suitable for. Debt management plans are informal debt solutions and are not registered anywhere. It’s thought that there are 500,000 debt management plans active in the UK.

An IVA is an alternative debt solution for somebody to enter in order to resolve debt problems. The IVA debt solution typically lasts for 5 years and at the end of the solution the remaining debt is written off. A bankruptcy will only ever last for 1 year, however, if it’s determined a payment plan is applicable then the monthly repayments could last for 3 years. The official receiver in bankruptcy will decide if a payment plan is suitable and how much should be taken every month.

Bankruptcy Debt Advice

If you think you are suitable for bankruptcy then talk it over with a qualified debt advisor. The money and debt advisor will have the knowledge and experience to explain the full process and tailor the advice to your exact situation. This means they can discuss income, expenditures, what debts can be included and assets, like houses, cars, stocks, share and savings.

The debt advice team will also explain if you would be suitable for other debt solutions so you can become debt free.

You can speak to our charity debt advisor on 0800 085 0226 or by completing our debt analyser and requesting a call back.

After receiving debt help you may decide an IVA is the best option to resolve debt problems. The IVA will typically last for 5-6 years and at the end of the solution, any debt which has not been repaid is written off. The best IVA companies can make the process simple and straight forward.

If you need help with an IVA or wish to receive debt help you can call our not-for-profit charity advice team on 0800 085 0226 or complete our debt test.

IVA Debt Companies

An IVA is a legally binding contractual agreement whereby the person in debt pays one monthly payment which they can afford. The IVA will require any realisable equity to be released near the end of an IVA. Usually this means the equity from a house, car, stocks or shares. If the equity can’t be released in a house through a remortgage or third party payment, then the IVA will typically last for 6 years and you will keep your property.

To propose an IVA, an insolvency practitioner is required. The insolvency practitioner (IP) will work for an IVA company and will propose the plan on your behalf. The IP will be responsible for managing the IVA and will become the IVA supervisor once the IVA has been accepted. There are many IVA companies able to propose an IVA on your behalf throughout England, Wales and Northern Ireland. Your IVA company doesn’t have to be local, however sometimes it can be beneficial if your insolvency practitioner is nearby.

Applying for an IVA via an IVA Company

If you enter an IVA the interest and charges are frozen. The proposal usually takes 10 -14 weeks to gather paperwork and create the plan. The creditors are given the option to accept, reject or negotiate the proposal. Often creditors will accept the proposal as long as they feel it’s the best offer they can get.

If the creditors decide to modify the arrangement it doesn’t mean the proposal won’t go ahead, however there is sometimes extra information required during the creditors meeting. You don’t have to attend the creditors meeting as you IVA company will do this for you.

The IVA company will let you know what happens after the IVA creditor meeting. If the IVA proceeds then you stop paying your unsecured debt (credit cards, overdrafts, payday loans etc) and pay one monthly payment to the IVA company. This payment continues until the plan is finished. At the end of the solution any remaining debt is written off by your Insolvency practitioner.

Lump Sum IVA

The other type of IVA is known as a lump sum IVA or full and final IVA. Sometimes a person will want to enter an IVA and offer what they can. However, if they are unemployed then they may not be able to make a monthly contribution. But, if there is a lump sum, for example a redundancy payment, divorce settlement or inheritance, this could be used as a one-time payment towards the creditors.

For instance, a £10,000 inheritance could be proposed towards the creditors to cover a £30,000 unsecured debt. The IVA company would take their fees from the monthly payment, or in this case the lump sum payment, then divide the remaining sum of money among the creditors on a pro-rata basis. Usually a lump sum IVA will last for a shorter period than a traditional contribution based IVA.

Get IVA Advice

For debt advice and support on an IVA or help with IVA companies speak to our charity advisors. We can help ensure the IVA is the best advice for you and point you in the right direction to get the IVA established. We’ll take every care to guarantee you’re given every piece of important IVA help.

You can call our advice line on 0800 085 0226. This is a free number from a landline. If you’re calling from a mobile please let us know and we’ll call you back.

Our debt analyser can help you understand whether the IVA is the best option for you too. It takes 5 minutes to complete and can point you towards suitable debt solutions you may qualify for. You should always speak to a professional debt adviser before entering any debt solution.