Debt advice blog

The charity was setup to deliver life changing solutions to money problems and we’ve managed to support thousands of people with their debt worries throughout the UK. We do this via our telephone and internet based debt advice centre.

Our debt help team provide support on a confidential and non-judgemental basis.

Debt Support Trust is available to provide debt advice on 0800 085 0226 or you can complete our debt test below.

Debt Support Trust

Recently, Debt Support Trust has been helping an ever increasing number of people battle their debt problems. From assisting with guidance on creating token payment plans with creditors through to helping people complete bankruptcy forms, we’re taking an active stance to help people become debt free once again.

One of the reasons for our increase in enquiries is due to being featured on BBC radio and on TV. Many people didn’t realise that a charity like Debt Support Trust was available to help with debt issues. The charity is a supportive ear to listen to problems associated with money and provide relevant and timely advice.

Stuart Carmichael from Debt Support Trust said “Our radio and TV appearances have helped to bring Debt Support Trust to people in need of debt advice. The charity supports people between 8am and 7pm Monday to Friday and our debt test is available 24/7. We’re answering 97% of all our calls to the helpline within 10 seconds so people can receive immediate debt support.”

Debt Plans to Become Debt Free

There are a range of debt solutions a person may be applicable to enter. Each debt solution will have its own benefit and negative. Through receiving tailored money advice you can understand how each solution will affect you and make an informed decision over which route to take in order to become debt free again.

Some of the debt solutions include

Negotiating with creditors: Many people think that their creditors will be aggressive if they mention they have a debt problem, which is not necessarily the case. Some creditors will be happy to negotiate and support you through a difficult financial problem. We can help you with this.

Debt management: A debt management plan is an informal debt solution where you pay one set amount each month to one company and they pay your debts for you. You won’t be making your contractual payments so the debt management company will ask for the interest and charges to be frozen too, although this won’t be guaranteed. We can help you with a free debt management plan so you don’t have to pay any setup or ongoing management fees.

Debt arrangement scheme (Scotland): You repay all of the money you borrowed via the debt arrangement scheme (DAS) but do so in an affordable payment plan. The interest and charges will be frozen on your debt to help you achieve your goal to become debt free.

IVA: The Individual Voluntary Arrangement is suitable for some people who want to repay what they can afford over a set period of time. Any remaining debt will be cleared at the end of the solution.

Trust deed (Scotland): The protected trust deed is usually a 4 year debt solution and will allow you to pay one affordable amount to your debt every month. The debt which is not repaid at the end of the solution is written off and you will be debt free again.

Bankruptcy: There are a few ways you can enter bankruptcy. The different processes will depend on your statement of affairs which a debt advisor can complete for you. The cost to enter bankruptcy will vary depending on the route you take.

There are individual pages on each debt solution which fully explain the pros and cons of each route.

Debt Support Trust has surveyed the opinions of 1,055 people across the UK to find out about their Christmas spending habits. The most prominent results were:

• 17% of people will borrow to afford their Christmas
• 15% of borrowers will still be repaying this year’s Christmas debt next year
• 42% of people feel pressured to overspend on Christmas
• Almost one third (32%) of people feeling pressured to overspend wish they could cancel Christmas because of the financial burden
• The average amount being spent on gifts is £230 but Christmas will cost each adult £433, including travel, gifts, food and alcohol.

Christmas: An Expensive Day

The cost of Christmas is such that many people wish they could cancel the festive holiday.

At the charity, we help 40% of people in debt in the first three month’s of the year as people start the New Year wanting to resolve their financial problems.

One Christmas of overspending is unlikely to translate into serious debt problems however consistent overspending could cause financial difficulties.

We found that 42% of people felt pressured to exceed their budget and spend more than they had in order to meet their Christmas expectations. Of the people that felt pressured to overspend at Christmas 32% wish they could cancel Christmas because of the financial burden.

The average cost of Christmas is £433 per person, which includes food, gifts, travel, alcohol and decorations. These costs for some people (17%) will be borrowed with the intention of repaying at a later date.

Credit Cards at Christmas

Some people will turn to credit cards to afford Christmas this year. While 61% of people will use money in their current account and a further 14% will use their savings to pay for Christmas, 14% will turn to credit cards, 2% will borrow from friends and family and 1% will take out a loan.

Borrowing on credit cards can help pay for the costly Christmas period and most people will have their Christmas debt repaid within 6 months. For some (15%), they will still be repaying this year’s Christmas debt next year.

Stuart Carmichael, Chief Executive of Debt Support Trust said, “Borrowing to afford Christmas isn’t necessarily a problem as long as there is an affordable repayment plan in place to clear the debt.

“It’s important to set a realistic budget over the festive period and decide prior to spending if you want to take up to 12 months, or longer, to repay debt borrowed to afford one day.”

* Survey was conducted by Populus on 10th & 11th of December 2014.*

The industry regulator, the Financial Conduct Authority (FCA), has said that they are imposing strict regulations on payday loan companies from 2nd January 2015. The new laws will change the way fees are charged by payday loan organisations.

There will be a price cap on the amount of money a payday lender can charge per day and the total amount which can be charged in late fees or repayments.

If you have a payday loan which you are struggling to repay speak to Debt Support Trust on 0800 085 0226.

Changes to Payday Loan Fees

The fees charged by payday lenders was previous unlimited. This meant that a company could charge what they wanted to for missed or late payments and the interest rate could be as much as they wanted.

People in debt to payday loans would contact Debt Support Trust seeking our debt help. We would frequently hear about a £100 loan which had risen to £1,000, or more, because of late payments and rolling debts over.

The new legislation will mean that debts in a payday loan will be capped at double the initial loan. Also, the interest rate is going to be capped at 0.8% per day. Previously, a loan of £100 would typically cost £125 to repay at the end of the month. If the person was unable to repay the £125 then the debt would be rolled over and a fee may be charged too. This further compounded the debt problem for the individual.

New legislation will protect people from short term lenders offering 30 day loans. The total amount of money which can be repaid will be equal to double the initial loan. The fees for late payments will be capped at £15.

Impact on Changes to Payday Lending

The changes to payday loans have been generally welcomed by the industry. At Debt Support Trust we’re pleased to see positive action being influenced by the financial regulator. It’s estimated that 7% fewer people, roughly 70,000, will no longer borrow from short term lenders. The FCA has said that lending has dropped by 35% since it took control of regulating the financial credit market. It’s also been suggested that the proposals don’t go far enough to protect consumers from the pitfalls these payday loans offer.

The payday loans industry has said that it expects more people to turn to loan sharks and unregulated lenders in order to survive financially.

Today’s announcement doesn’t clarify what short term lending would constitute as other lenders offer loans over longer terms than the standard 30 day loan.

We would encourage anybody experiencing financial problems to seek help from our charity on 0800 085 0226 or visit your Citizens Advice Bureau.

One of the questions most people want to know when they call our charity advisors at Debt Support Trust is, “How can I get debt free?”. Being in debt is not an enjoyable experience and it’s known to cause mental health, relationship and employment problems. The stress of trying to repay the debt can often cause people to ignore their money worries further. This is not a solution but an understandable reaction when the debts grow beyond a person’s capability.

At Debt Support Trust we’re experts are helping people to resolve their money problems to ensure you can become debt free again.

You can get help from our charity by telephoning our helpline on 0800 085 0226.

Get Debt Free… Again

There is always a route to become debt free but knowning which options you are suitable for may not be evident. That’s why thousands of people contact Debt Support Trust for our help.

We review your financial situation, including your income, expenditure and debts. We know exactly the debt solutions you could be suitable for. Once we understand your situation we then explain the process of entering each plan, along with the pros and cons. Some debt solutions can help you become debt free in as little as 1 year, but most will take longer.

Benefits of Dealing with Debt

There are multiple reasons why you would want to seek debt help. We’ve listed 5 of the top reasons you could want to become debt free:

• You will eventually be debt free
• Some debt solutions will allow you to freeze interest and charges
• You won’t be alone in dealing with debt as we’ll be here to help
• You can protect your assets in some plans
• You will only be asked to pay what you can afford each month towards your debt

The primary reason you would want to get debt free is to get your finances back on track. If you’re worried about opening letters, answering the phone or even leaving your house because you fear your creditors contacting you, then we can support you.

Start to Become Debt Free

You can take the first steps to become debt free by speaking to a debt advice charity. Debt Support Trust is open between 8am and 7pm Monday to Friday. You can complete our debt analyser form at any point 24 hours a day and receive an outline to the debt solutions which you could be suitable for.

You can complete our debt analyser below, or call 0800 085 0226.

Resolving debt problems is one of the hardest decisions to make for some people and it doesn’t happen easily. Opening up and money worries, especially when you have dealt with them alone for so long, can be complicated. However, at Debt Support Trust we’re here to help you to the steps you need to become debt free again.

Many people we help speak to us about becoming debt free but aren’t ready to take the necessary steps to start a debt solution. The debt advice is stage one and speak to somebody at our charity can help you to get the information you need to understand the pros and cons of the debt solutions you are applicable for.

Once you have the information you are under no obligation to take our advice and proceed, but when you start a debt solution you will be taking positive steps to resolve your debts, which for many people have caused relationship, health or employment issues.

If you’re ready to take steps to clear your debts and become debt free again Debt Support Trust can help. You can call us on 0800 085 0226 or complete our debt analyser enquiry form today.

Taking the First Step to Debt Freedom

There are various reasons why people get into debt but the most important question is how to get back to being debt free. There are many routes out of debt but some may not be applicable, depending on your situation.

You may only want to tentatively ask about which debt solution is right for you and that’s something we hear a lot at Debt Support Trust. It then gives you the time to think about the solution before proceeding and starting the process of resolving your debts.

It’s important you feel comfortable about the debt solution you enter and that you’re not pressured into any plan. There are often two or three routes out of debt and it can be a personal decision over which one you decide to enter. At Debt Support Trust our responsibility is to ensure you have the information about every debt solution you could enter, along with the pros and cons based on your financial and personal circumstances.

Resolving Debts in a Debt Plan

When you’re ready to resolve your debts then Debt Support Trust is here to help. We support people across the whole of the UK become debt free and start again financially. The process is simple. After you get in touch via telephone, email or debt analyser we will complete a short questionnaire about your debt, income, expenditure and assets, like houses and cars. This information helps us determine which solutions you are suitable for. We also listen to what you want to achieve and try to match your expectations with available debt solutions. You can then decide how you wish to proceed and we’ll help you with whatever route you choose.

Debt Support Trust is open between 8am and 7pm Monday to Friday and you can call us on 0800 085 0226.

When debt becomes unmanageable there has to be a solution to resolve money worries. If you feel you can’t afford your debt then the best option is to seek professional debt advice – there are always solutions which can help you.

You can call Debt Support Trust or complete our debt test below. Our telephone number is 0800 085 0226 and our charity advisors are available between 8am and 7pm Monday to Friday.

Money Worries: Debts Are Too Large

When debt problems become too severe it can be a worrying time. The debts which were once under control have become too expensive to service each month and you’re struggling to make ends meet. The good news is there are solutions which can help you in this situation.

The reason for your debt problems and being unable to afford your debt can vary, but usually the interest free period has ended, the amount of credit you have borrowed has grown too large or you’re income has dropped and it’s now impossible to pay your contractual obligations to your debt every month.

Whatever the reason, the problem will not resolve itself and debt help is required. There is help and support available.

Call Debt Support Trust on 0800 085 0226 for confidential money advice.

Can’t Afford to Pay Debts

When repaying debt each month is difficult it can feel like being trapped in a vicious cycle which you can’t break free from. There doesn’t seem to be an easy resolution. Friends and family may not be aware of the problems you face, but Debt Support Trust or another charity could help you in confidence.

Some of the debt resolution plans you may wish to consider are:

Token Payments: If you’re financial problems are short term, or if you’re searching for employment, then you could consider making token payments to your debt. This requires your creditors to agree to your proposal but we can help you with this. You pay one monthly amount until the situation improves. This can be as little as £1 per week.

Debt Management: An informal route to resolve the debts you can’t afford would be the debt management route. This option only exists if you can afford £100 per month. You can get a free debt management plan and not pay any fees through Debt Support Trust. You repay all the debt, but in a manageable way.

IVA: A formal debt solution which guarantees to freeze interest and charges over the typically 5 year debt solution, should the creditors agree. You pay what you can reasonably afford and any debt which isn’t repaid is written off at the end of the IVA.

Trust Deed: A Scottish formal debt solution lasting 4 years. You pay one monthly payment, along with equity from any assets and any remaining debt is written off at the end. Interest and charges are frozen in the Trust Deed.

Bankruptcy: There are various routes to go bankrupt. You will be asked to contribute money to your bankruptcy every month, for 3 years, if the insolvency specialist believes you can afford it. Assets in bankruptcy will be valued and sold if there is realisable equity.

For advice which is specific to you it’s best to call our advice line or take our debt analyser for an idea on which debt solution you could enter. You can get more information about each of these debt solutions on our “how we can help” section.

With every debt solution you should be aware it could affect your credit file but it would resolve the money problems you’re encountering and make payments more affordable.

When you’re struggling with debt it’s a difficult period in your life. It can affect you life in various ways, including lack of sleep, fear of bailiffs at your door or your friends and family finding out about the extent of your money problems.

There is good news – we can help at Debt Support Trust. Our charity offers not for profit money advice to help resolve your money issues.

You can call Debt Support Trust on 0800 085 0226 or complete our debt test form to understand which debt solutions you may be suitable for.

Help to Resolve Money Worries

Your money worries could be as little as £100 or it could be larger than £100,000. We help everybody with money problems, little or large. If you’re unemployed but have a £100 debt then that can be harder than a large debt which is into the thousands.

Resolving money problems starts with you taking proactive steps. You could read about the debt solutions on our website, give us a call to speak to a friendly advisor or get help via our debt analyser form. There is always at least one route back out of debt and we can help you start this process.

A life in debt has a negative impact on relationships, work and your general well being, but struggling with debt alone is not necessary. There are a variety of debt solutions which you could be suitable for depending on your income, expenditure, level of debt and equity in your assets.

It’s our responsibility to take the burden of debt off your shoulders and help you back to a debt free life. We do this by completing a 15 minute questionnaire over the phone. It’s informal and if you don’t know any of the answers, like the exact amount of debt you have, then that’s not a problem. Our charity advisors will be able to give you general debt advice based on your rough situation in this instance.

At the end of your call you will have at least one route to consider which will help you become debt free again. You don’t have to struggle with debt alone, we can tell you which debt solutions you would be best suited for.

Struggling to Pay Debt On Time

If you’re struggling to pay your contractual obligations on time then you may already know that you have a debt problem. It’s by rectifying these debt problems that you get your life back on track.

You may feel the debt is too large to repay in full or that you will be in debt for the rest of your life. Many debt solutions will allow you to repay your debt in an affordable way and some even allow you to write off some of the debt so you’re not in debt forever.

There are some debt solutions that will guarantee to freeze your interest and charges too. Most debt solutions will affect your credit file and a default could be added which would last for 6 years and could mean obtaining credit in the future is harder. However, your credit rating can improve again after you have resolved your money worries.

If you’re struggling with debt and need help to get your debt problems resolved then speak to a number of charities about your money worries. You’ll get confidential advice and be taking the first step towards a debt free life.

You can call Debt Support Trust on 0800 085 0226.

When it comes to deciding which debt solution to choose there are often two or three options to consider. A decision may be to decide whether you should enter bankruptcy or an IVA to resolve outstanding debt problems.

The right debt solution is often dependent on your expectations as much as your financial situation. In the end, only you can decide which solution will be better for you. At Debt Support Trust our charity advice team can offer guidance on which solution you may wish to enter.

You can call us on 0800 085 0226 to get advice on bankruptcy and other debt solutions, or complete our debt analyser enquiry form. This will give you a guide as to which debt solutions you may wish to consider.

Debt Advice for Bankruptcy or IVA

There are several available debt solutions which resolve money worries, but not everybody is suitable for all of the plans. In order to understand which debt solutions you can enter you should seek debt help.

The debt advice you receive should lead you towards a debt solution or perhaps a couple different routes which could all get you debt free. The advice you receive will be based on your income, expenditure, assets and level of debt.

It’s vital to get debt help before entering a debt solution as a lot of them cannot be reversed once you’ve entered the plan. Most recently we heard about a 48 year old who had entered bankruptcy and wanted help to avoid the Official Receiver selling their property. The property had £40,000 equity and the debt was only £15,000. This assistance we could offer was limited, however there were a number of other options which would have been more suited, rather than bankruptcy.

Difference between Bankruptcy & IVA

You may have heard about a bankruptcy before – it’s the most commonly known debt solution and evokes memories or monopoly when you don’t have any money left and have no assets to sell (houses or hotels). You may even know somebody that has entered a debt solution, like a bankruptcy, and they tell you it’s the best thing they ever did. What happens to one person in a debt solution is not necessarily the same for everyone.

A bankruptcy and IVA are both insolvency debt solutions. However, there are variations of an and bankruptcy. Typically an IVA will last 5 years, while the bankruptcy will last 1 year.

Repayments: If you can afford to repay money each month then you will have to contribute towards your bankruptcy each month for 3 years in total. The cost of bankruptcy is typically £700. There is no upfront cost to enter an IVA. You can’t negotiate your bankruptcy payments, but you can put a proposal to your creditors in an IVA where you set what you can reasonably afford each month.

Assets: In a bankruptcy your assets with equity are sold. A third party (friend / family member) can purchase your share of equity if they can afford it, however, usually assets like a house are sold on the open market. In an IVA you are asked to remortgage near the end of the solution. If you are unable to remortgage and release equity then the IVA is extended for 1 extra year and you retain your property and equity.

Debts: In both the Bankruptcy and IVA you repay what you can afford and any remaining debt is written off.

Lump Sum IVA / DRO: There are variations of the bankruptcy and IVA. If you can’t afford a monthly payment to your debt but you have a lump sum of money then you could offer this money in a full and final IVA. The rest of the debt would be written off and the IVA would last usually 1 year.

The DRO is a £90 bankruptcy for people who qualify for the debt solution. The Debt Relief Order and IVA don’t require you to go to court, whereas traditional bankruptcy does.

Enter a Debt Solution

If you are ready to resolve your debt problem then an IVA or bankruptcy could be your best option. What Debt Support Trust will do is help you understand which debt solutions best meet your needs. If you are unemployed, with no assets and debts of around £10,000 then you may be best entering a Debt Relief Order. If you are in employment and want to avoid bankruptcy, then an IVA could help.

There are other debt solutions too, like a debt management plan, which you could qualify for. We will give you all of your options, with the pros and cons of each option so you can make an informed decision.

Start today by calling 0800 085 0226. Or, why not complete our confidential 10 minute debt analyser? It gives you a list of potentially suitable debt solutions.