Three quarters of families are at risk of developing debt management problems as research shows they are set to spend more money than they can afford on keeping children entertained over Christmas.

The additional cost of keeping children entertained over the festive season means that more than three in four parents (77 per cent) admit that they will spend more money than they can afford to on their kids, during what is an already expensive time of year.

According to research from online bank, Egg, the average family is set to fork out almost £40 a day on keeping boredom at bay from their children during the Christmas break.

Along with splashing out on toys and presents, parents are most likely to keep children entertained by spending on additional activities such as going to the cinema, going out for lunch or for buying books, comics or DVDs.

This all adds up to an average cost of approx £540 for the two-week British Christmas holiday.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “Overstretching financially at this time of year can prove very damaging to finances throughout the rest of the year, as household budgets are squeezed to make repayments.

“With interest rates and additional tax rises expected next year, household finances are already set to be under increasing pressure, so it’s best to avoid potential debt problems by keeping spending in check over Christmas.”

Three in four parents risk developing debt problems this Christmas is a post from: Chiltern Debt Management

Baywatch babe Pamela Anderson has revealed on TV that she has recently experienced debt management issues.

The American star confessed that she had failed to keep abreast of her financial affairs and had suffered in the recession as a result of a string of investments turning sour.

Anderson, who is infamous for blowing thousands (on her plastic), also revealed that the financial boob now means she is now living in a trailer with her two sons.

The former Baywatch star said she had invested millions of her fortune into her dream home but the project stalled halfway through when she ran out of money.

Despite taking great lengths to avoid it, “Pammie” will have to sell the property, due to cashflow problems.

She said to Jeremy Kyle: “I’m going to sell it. I hate it. People commit suicide over constructions. Relationships break down over constructions and I can see why. It rips your heart out.”

Ivan Cooper, Chairman at debt advice experts Chiltern, said: “Despite falling into debt management troubles, Pamela Anderson is still quite lucky that she can command a sizeable wage.

“Unfortunately many ‘normal’ people who experience such financial heartache aren’t so lucky, and they need impartial advice to get out of debt.”

Fortunately Ms. Anderson’s debt problems should be solved once her Mailbu home has been sold, as it is valued at around £3m. It was bought for approx £850,000.

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Baywatch star reveals debt management problems is a post from: Chiltern Debt Management

New rulings proposed by Financial watchdog the FSA (Financial Services Authority) look set to minimise potential debt management issues further by calling an end to “Liar Loans”.

The self-certificate home loans, labelled “Liar Loans” as they require no proof of earnings or additional income, look set to be outlawed under new proposals from the FSA.

Following in-depth analysis, the FSA found that there was widespread evidence of fraud and a large number of clients in arrears among self-certified loans. Lenders will in future be required to directly verify the income of applicants and not rely on information from mortgage brokers.

The move sets out a clear warning that the days of homeowners remortgaging so that they can splash out on holidays or pay off outstanding credit card debts could be over shortly.

However, the watchdog didn’t advocate an outright ban on mortgages of 125 per cent loan to value, or on individuals taking mortgages of up to five times their salary, but instead called for in depth tests on a customer’s affordability.

This move, along with other proposals, forms part of the FSA’s effort to ensure another financial crisis is avoided in future and that banks return to more sensible lending practices.

Remortgaging to pay off credit card debts and other consumer credit rose dramatically at the turn of the millennium as households used their homes as a cash machine. The FSA’s study discovered that between 2000 and 2007 £315bn was borrowed by British households against their properties for general consumer spending and to help them get out of debt, rather than to increase the value of the homes through improvements like extensions.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “The door looks set to be closed on households who used their properties increasing value to get out of debt.

“More homeowners will need to seek impartial debt advice or explore alternative methods of debt management, such as IVAs (Individual Voluntary Arrangements) and other professional debt management programmes.”

For immediate debt and IVA advice, or for more information on a range of debt management programmes like IVAs, Trust Deeds and Debt Management Plans, please call the number at the top of this page.

Liar Loans banned to prevent debt management issues is a post from: Chiltern Debt Management

Despite taking a £5million pay cut this year, Jenson Button will have no debt management worries after securing the Formula 1 world championship.

At the start of the season Button and his team mates were told that there was no future for the team as they had lost their funding.

Parent company Honda, who owned the team at the time, had recently announced that they were bowing out of F1 due to financial difficulties.

Ross Brawn then took over with only three weeks until the start of the season’s first race in Australia.

Jenson Button then won the first race and won six of the first seven races, finally clinching the driver’s championship after almost ten years in the sport.

Estimates have been set that he could now earn in excess of £100m from sponsorships and endorsements alone – so it’s safe to say that he will not be having any debt problems… well not for the next few years anyway.

Ivan Cooper, Chairman at debt advice specialists Chiltern said: “We’ve seen that film stars, sports personalities and even royalty have run into debt management difficulties after amassing multi-million pound fortunes, so here’s hoping that Jenson employs someone to look after his money wisely and ensure he never needs to seek debt advice.”

For immediate debt advice or for more information on a range of debt management programmes, please call the number at the top of this page.

No debt management worries for Button…yet! is a post from: Chiltern Debt Management

Hollywood superstar and Oscar-winning actor Nicolas Cage is reportedly in need of some debt advice, after facing claims for millions of pounds in unpaid taxes.

The actor who is responsible for hits including Leaving Las Vegas, Captain Corelli’s Mandolin and Con Air, and who commands around £10 million-a-film is currently offloading many properties from his portfolio in a bid to fend off mounting debt problems.

One of the properties he is currently trying to sell is a mock-gothic castle in Somerset called Midford Castle.

Cage bought the castle, which is designed in the shape of the ace of clubs, for £5m but is trying to offload it quickly to avoid further pressure on his debt management for a cut-down price of around £3.5m.

This also comes after he recently sold a townhouse in Bath, again reportedly for a loss.

It’s unfortunate deals like this that have pushed the movie star from having a licence to print money to being in a situation where he needs to consider seeking impartial debt advice, if he wants to avoid bankruptcy.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “We’ve seen recently that the “rich”, and even ex-royalty, have been struggling to contain debt problems, and that their debt management could do with some expert advice.

“People that have previously taken out a further loan to consolidate their debts have found that they can no longer secure credit, so they are having to consider alternative debt management solutions.”

Reputable debt advice organisations, such as Hamilton Locke, The Debt People and Chiltern, offer a range of solutions to help people get out of debt.

These range from informal Debt Management Plans (DMPs) to professional programmes like Individual Voluntary Arrangements (IVAs) and Trust Deeds.

For immediate debt and IVA advice, or for further information regarding all debt management solutions, please call the number at the top of this page.

Does actor Nicolas Cage need debt advice? is a post from: Chiltern Debt Management

In a bid to prevent a repeat of the disastrous debt management issues that the financial world has had to cope with recently, the Financial Services Authority (FSA) is set to eliminate self-certification mortgages.

The loans which have been branded controversial, as they allow mortgages to be granted without the proof of income, look set to be outlawed as recommended in a discussion paper by the FSA.

This means that all borrowers wishing to secure a mortgage will be required to provide evidence of their income before the loan is granted, eliminating the increased risk of financial over-stretching and subsequent development of debt management problems.

“Self-cert” mortgages were originally introduced to enable those with less stable or irregular careers, such as the self-employed or freelance workers, to get on the housing ladder. However many people used these as a way of inflating their salaries to secure a larger mortgage during the property boom, and are now experiencing serious debt problems as they are unable to maintain their payments.

The financial watchdog believes that by insisting on checking a person’s ability to repay what they borrow, through proof of income, it will help move away from some of the more recent irresponsible lending practices.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “The move by the FSA will no doubt start a debate as to whether people like the self-employed are prevented from owning a property.

“In recent years lenders have been eager to give out money, but the financial crisis has taught them that if their customers have debt management problems, they will have debt problems too.”

Debt management helped by death of self-cert is a post from: Chiltern Debt Management

Middle-class workers and high earners are suffering with their debt management problems at a similar rate to those on lower incomes according to leading debt advice experts.

With the withdrawal of many credit lines and tighter lending conditions, even those who earn decent salaries are struggling to find loans in the credit crunch.

Many who have lived beyond their means for too long have now found that the rug is being pulled from beneath them as lenders don’t extend credit, and they are left with mounting debt problems that they can’t consolidate with other loans.

In most cases, the high earners are not in difficulty due to losing their jobs, but by simply overspending and racking up thousands of pounds on overdrafts, personal loans and credit card debts that they can no longer afford the monthly payments on.

A spokesperson form one debt advice charity, that has 75% of their offices in more affluent areas of the country, said: “I find it scary how people on £50,000 or £60,000 a year can get themselves in such a pickle. They have lifestyle expectations and because they are on largish incomes, they have never felt the need to budget.”

One adviser even commented that a client had complained about the performance of their daughter’s polo pony.

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “Even those earning £50,000 a year or more need to budget so they know how much money they have each month to spend.

“By speaking to an impartial adviser, many debt problems could be solved and a suitable repayment plan can be arranged – without the need to borrow more.”

Reputable debt advice organisations include Hamilton Locke, The Debt People and Chiltern. These offer a number of different debt help programmes that can assist those struggling to get out of debt.

In many cases, simple debt advice is all that is needed to relieve debt problems, but in some circumstances a professional debt management programme may be required.

These include informal Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds amongst others.

A Debt Management Plan (DMP) offers a flexible way for multiple unsecured debts to be repayed with just a single monthly payment. The arrangement is flexible as the monthly payment can be altered according to your changing financial situation.

It is also calculated to be affordable as the monthly payment is based on how much “disposable income” is available once priority payments have been accounted for – i.e. mortgage/rent, food, council tax etc.

The single monthly payment is paid to your debt management provider who distributes it on a pro rata basis to the peopl eyou owe money to.

Payments towards your debts are then rescheduled over a longer period of time to make them more affordable.

An IVA is similar to a Debt Management Plan, but is repaid over a fixed period of time – which is normally within five years. After this time all remaining unsecured debts are effectively written off.

For immediate debt advice, or for further information on Debt Management Plans and other debt help solutions, please call the number at the top of this page.

High earners suffering with debt management problems too is a post from: Chiltern Debt Management

Naming your child with a name associated with “naughtiness” could bring it future debt management problems, according to a new study.

The saying “Give a dog a bad name and hang him” could also apply to your children, after latest research shows that teachers make preconceptions of children based on their names.

A name associated with all things naughty could be a potential curse, as the label could predestine the unfortunate holder to prejudice with future ramifications – like suffering financial and debt management issues.

Giving your baby a name like Angel, Heaven, Misty or Destiny is equivalent to literally handing them an increased risk of debt problems, and equivalent to wiping tens of thousands off their future annual income.

The top three names that teachers associate with juvenile female naughtiness were found to be Chelsea, Chardonnay and Courtney. Top of the class (literally) were Elizabeth, Charlotte and Emma, whose names were judged to be “clever” names.

Alexander, Adam and Edward were deemed the “cleverest” in the boys category with Callum, Connor and Jack scoring highest in the boys with the naughtiest names list.

Almost half of all teachers that were surveyed admitted to making presumptions about children based solely on their names.

So to help your children avoid the potential risk of developing debt management issues in future, you should choose their name carefully. This could boost their earning potential, simply by choosing a more traditional names. These are generally classed as the safest bets.

This may seem like there is a lack of individuality or originality, but unless you want your child to be in need of debt advice, it may help to choose a simpler, more traditional name for them.

If however they do experience financial worries (or you do for that matter), the best thing to do is seek impartial debt help from a reputable debt advice organisation – like Hamilton Locke, Chiltern or The Debt People.

These can all offer impartial debt advice and recommend a number of professional debt management solutions where necessary.

Professional debt solutions include Debt management Plans (DMPs), Individual Voluntary Arrangements (IVAs), Trust Deeds and others.

For immediate debt and IVA advice, or for more information on a range of debt help programmes, please call the number at the top of this page.

Could your child’s name bring future debt management problems? is a post from: Chiltern Debt Management

Whilst ex-workers at car makers MG Rover were toiling over their debt management issues, bosses handed themselves a multi-million pound remuneration package, a new report has revealed.

The Phoenix Four along with Chief Executive Kevin Howe, are believed to have rewarded themselves with around £42 million in pay and pensions, after buying the troubled car brand from BMW.

Within five years of their takeover MG Rover had collapsed, leaving 6,000 people without a job and many in need of debt help.

Despite threatening the livelihoods of so many people, the directors apparently rewarded themselves with salaries and pensions topping £9 million pounds each.

Debt help organisations suggest seeking impartial debt advice to combat any debt problems that may have been triggered by the loss of a job.

Ivan Cooper, Chairman at leading debt management company Chiltern, said: “When faced with rising bills and a shrinking income, many people bury their heads in the sand and hope their debt problems will go away.

“By seeking advice from an impartial debt help provider, most debt problems can be controlled and eventually cleared.”

Reputable debt advice organisations, such as The Debt People, Chiltern and Hamilton Locke, can provide immediate debt help and support to people who are struggling with their unsecured balances (personal loans, overdrafts, store cards and credit card debts etc).

Some of the professional debt help programmes that can be offered include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds.

A Debt Management Plan (DMP) is a professional debt help solution that simplifies your finances, by enabling multiple unsecured balances to be repaid with a just one affordable payment each month.

All payments to personal loans, overdrafts, store cards and credit cards etc can be gathered into one monthly payment, which is then distributed accordingly to creditors on a pro rata basis by the debt advice company.

Payments towards these balances are then rescheduled over a longer period of time to make them more affordable. The monthly payment remains manageable for you throughout the term of the Debt Management Plan, as it is based on how much you can afford after living costs have been accounted for.

This means that if your wages are lower than before, the monthly payment can be lowered too. Similarly if your wages increase your payment can be raised to help you pay off balances quicker.

An IVA is a professional debt help solution for people with debt problems over £13,000, that requires a legally binding arrangement between you and the people you owe money to. Because of this it requires a qualified Insolvency Practitioner to provide IVA advice and support, along with drafting your IVA proposal.

This agreement protects you from creditors changing their payment demands or breaking the terms of the agreement.

An Individual Voluntary Arrangement (IVA) works in a similar way to a Debt Management Plan but is repaid over a fixed term – normally within five years. After this time, all remaining unsecured balances are effectively written off and you walk away debt free.

Business Secretary, Lord mandelson, said that legal action was already underway to try and prevent the directors from holding company office again.

Bosses cream off £42m at MG Rover amid debt management worries for staff is a post from: Chiltern Debt Management

Despite a drop in wholesale funding costs throughout August, the price of fixed-rate mortgages has risen to its highest level in eleven months – causing debt management worries for homeowners.

A report by the Bank of England said that average five-year fixed-rate mortgage costs had increased to 5.72 per cent between July and August – up from 5.68 per cent.

This is the highest level since October last year when the BOE’s base rate was 4.5 per cent. Currently the base rate is 0.5 per cent.

For homeowners needing the security of fixed payments, these rates aren’t helping with their household debt management, as the higher costs can cause financial strain.

Debt advice organisations have expressed concern for vulnerable households.

Ivan Cooper, Chairman at leading debt management company Chiltern said: “Lenders are using the higher rates to put people off their mortgages to lower their risk.

“Seeking impartial debt advice from a reputable debt help organisation could prove beneficial, as they can prevent debt problems from getting any worse.”

Reputable debt advice organisations, such as The Debt People, Hamilton Locke and Chiltern, offer useful debt help for people struggling with their unsecured balances.

They can show you many ways to get out of debt and how to alleviate any debt problems, by offering useful debt advice to suit your circumstances.

For many people, simple budgeting and debt advice is all that is needed to bring finances in-line, although in other cases a professional debt management solution may be required.

The specialists at the debt help organisations mentioned above, will be able to go through your situation and recommend a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA) or other solution if it is suitable for you.

Economists have warned that mortgage rates could rise further throughout the rest of the year, as lenders look to boost their profit margins and remain reluctant to take on new business.

For immediate debt advice, or for more information on a number of debt help programmes, please call the number at the top of this page.

Highest mortgage rates straining debt management is a post from: Chiltern Debt Management

Friends and family are offering debt help to people struggling with their debt problems during the recession, research has shown.

Findings by Future Foundation, found that families and friends are assisting people through the recession and helping them to overcome their debt management issues.

They identified a “financial family” – a collaborative unit of friends and family – who were financially interdependent, that act as a financial family and provide debt advice and support for each other.

As living expenses rise, they anticipate that the dependency on these financial networks will increase, and that they will play an increasingly important role in people’s lives.

Their research, carried out for National Savings and Investments, found that over half (54 per cent) of those questioned said they felt financially responsible for other family members.

Barry Clark, director at Future Foundation, said: “We feel we’ve revealed a new way for people to look at British family life and one that will become increasingly common.

“We can expect the financial family to be a very important feature in the future. The financial family is here to stay.”

But debt advice organisations have added that in trying to help some people could possibly be developing debt problems for themselves.

Ivan Cooper, Chairman at leading debt management company Chiltern, said:
“Whilst it’s a nice gesture to provide debt advice and support for friends and family, I wouldn’t advise anyone to put themselves at risk financially by taking on excessive debt.

“By offering to help somebody out – if they can’t get credit – you may be putting yourself in danger of developing serious debt problems for yourself, as any loan or credit card debt will be in your name.

“In many instances, informing them to seek some impartial debt advice from a professional would be the better option, as they will be able to speak with specialists who can recommend the best solution to their current needs.”

Reputable debt advice organisations, like The Debt People, Hamilton Locke and Chiltern, provide a number of ways for people who are struggling with their finances to tackle any debt problems.

After assessing your situation, this could involve anything from offering useful budgeting tips and simple debt advice, to providing a professional debt management solution.

Professional solutions include programmes such as Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds.

Debt Management Plans are a flexible and informal way of repaying multiple unsecured balances – like loans and credit card debts – with a single affordable monthly payment. This makes managing finances simpler. The amount you pay is based on how much you realistically can afford, once priority payments (rent/mortgage, food, utility bills council tax etc) have been accounted for.

The amount that is available following the deduction of priority payments is called the “disposable income”, which is then distributed to your creditors on your behalf on a pro rata basis by the debt advice company.

An IVA works in a similar way to a Debt Management Plan but it is repaid over a fixed period of time – usually within five years. Once the IVA term is complete and payments have been maintained, all remaining unsecured balances are written off and you can walk away debt free.

Trust Deeds are also offered by reputable debt help organisations. These are similar to IVAs, although they are usually repaid within three years and are only for people living in Scotland.

For immediate debt advice or for more information on Debt Management Plans, IVAs and other debt help solutions, please call the number at the top of this page.

Friends and family providing debt help during recession is a post from: Chiltern Debt Management

Retailer John Lewis is apparently trying to prevent people from developing debt problems by reprinting a thrift and debt help guide from yesteryear.

Dozens of useful tips and debt advice have been compiled by staff at department store John Lewis into a booklet called “Make Do And Mend”. This was the title used by the wartime government nearly 70 years ago with its own money-saving advice pamphlet, and is intended to help people budget better and avoid debt problems.

The booklet from wartime Britain containing tips and ways for better debt management includes information such as how to prolong the life of items around the house, and ways to save money and beat the recession.

A spokesperson for the John Lewis group said the booklet, taps into a desire by British families to return to a more sustainable way of life, by getting the full use out of products and gadgets rather than dumping them in the bin and buying new.

They said: “The British have always been famous for having a spirit of ‘make do and mend’.
‘Wartime housewives became experts at stretching their scarce resources.

“Fast-forward 65 years, and we now understand that resources aren’t infinite, and it is once more a matter of pride to be economical and practical.”

Ivan Cooper, Chairman at leading debt management firm Chiltern said: “If this booklet helps those suffering with their debts to avoid building up debt problems, then it must be a good thing.

“In the times around the great wars, people had more of a save to spend attitude, which if more followed that principle these days there would be fewer in need of debt help.”

For people who are struggling with their unsecured balances – overdrafts, store cards, personal loans and credit card debts for example – they could benefit from seeking some impartial debt advice.

Often debt problems can be avoided by speaking to a professional for debt help, and a solution can be recommended that could help you to get out of debt quicker.

For immediate debt advice, or for more information on a range of debt help solutions (such as Debt Management Plans, IVAs and Trust Deeds), please call the number at the top of this page.

John Lewis offers debt help is a post from: Chiltern Debt Management

The debt problems of millions of households look set to continue, as figures released today show the number of jobless households has leapt to almost half a million – the highest level since 1997.

According to figures released today by the Office for National Satistics (ONS), the number of households with at least one person of working age and without a job has hit almost half a million (493,000).

This marks an increase of 158,000 from last year, highlighting the debt management issues the recession has caused, and is the highest number since 1997 when the data was first collected.

These figures only relate to households where all people are unemployed; where both adults are available for work and actively seeking employment.

When the jobless household number is changed to include “inactive” people – such as housewives, students, or the long-term sick — this figure soars to 3.3 million, an increase by almost a quarter of a million (240,000) on last year.

The figures also showed that there are almost two million children being brought up in jobless homes.

These stats come only a week after official figures highlighted the debt problems and grim outlook young people face, as overall unemployment currently stands at over 2.4 million.

Debt advice organisations have warned against building up excessive overdrafts or credit card debts to cope with the reduction in income caused by unemployment.

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “Unfortunately, unemployment is causing more parents to worry about their debt problems as they struggle to find another job.

“Many people may start to use their plastic or overdraft facilities to cover living costs, but this could have dire consequences as long-term debt problems could be developed by building up large credit card debts.”

Reputable debt advice organisations, like The Debt People, Hamilton Locke and Chiltern, offer a number of ways for people struggling with their credit commitments to get out of debt.

These include offering free budgeting and debt advice, along with providing professional debt help solutions where necessary.

Professional debt help solutions include Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Trust Deeds.

A Debt Management Plan (DMP) is an informal agreement between you and the people you owe money to – your creditors. A Debt Management Plan involves working out how much you can realistically afford to repay towards creditors, once your living costs have been accounted for.

Debt management simplifies finances as one monthly payment covers all unsecured balances (Personal loans, overdrafts, store crads and credit card debts etc). Reputable debt advice organisations providing debt management should also be able to negotiate on your behalf to reduce or freeze the interest and charges to your accounts. Debt management makes the repayment of balances more affordable, as they are rescheduled over a longer period of time. However, if your situation improves you can increase your monthly payment to repay debts quicker.

An Individual Voluntary Arrangement is a solution for people in financial difficulty and offers an alternative to bankruptcy or informal arrangements (debt management plans). An IVA involves a legally-binding agreement between a you and all of your creditors. As long as you maintain your payments towards the IVA, you are protected from any further action by creditors.

This means that you cannot be taken to court or made bankrupt, and creditors cannot recover any more money than agreed under the terms of the contract. IVAs are repaid over a fixed period of time (usually within five years) after which time all remaining unsecured balances are written off.

For immediate debt advice, or for further information on debt management plans and IVAs, please call the number at the top of this page.

Debt problems to grow as jobless households hit 12 year high is a post from: Chiltern Debt Management

More people are putting off getting a divorce because of the financial and debt management implications of the recession, according to recent research.

According to a survey of divorce lawyers by advice website unbiased.co.uk, there has been a decline in divorce agreements during the recession, due to the economic climate.

Their study found that half of the lawyers surveyed said that less clients were coming forward to seek divorce, financial or debt advice regarding their separation.

David Elms, chief executive of Unbiased, said: “The credit crunch may lead many people to put major financial decisions and developments on hold. However, seeking professional advice as soon as possible is always the best step to get your financial affairs in order.

“Getting a divorce can be a stressful enough process without also waiting to reach a financial settlement for a prolonged period of time.”

Ivan Cooper, Chairman at one of the UK’s leading debt advice organisations Chiltern, said: “Whilst it isn’t the most romantic of reasons of staying together, people are realising that when they leave the marital home they could be financially out of pocket.

“Without sound debt management skills in place, this could force someone to develp serious debt problems.”

Debt advice organisations suggest seeking impartial debt help from a reputable company as soon as any debt problems appear. Organisations like The Debt People, Hamilton Locke and Chiltern will be able to offer free debt advice, which could include budgeting and prioitisation of outstanding debt repayments, or in some circumstances a professional debt management solution could be recommended.

Professional solutions, such as an Individual Voluntary Arrangement (IVA), Debt Management Plan (DMP) or Trust Deed help people who are struggling with their unsecured balances (overdrafts, personal loans, credit card debts etc) to regain control of finances whilst still repaying their outstanding debts.

A debt management plan is an informal arrangement that gathers outstanding unsecured balances into a single monthly payment. Repayments are then rescheduled over a longer period of time to make them more affordable.

IVAs also gather multiple unsecured balances into one manageable payment but are repaid over a fixed period of time. For an Individual Voluntary Arrangement (IVA), this is typically over five years. Trust Deeds are the equivalent of an IVA for people living in Scotland and are usually repaid over three years.

For immediate debt advice, or for further information on Individual Voluntary Arrangements (IVAs), Debt Management Plans (DMPs) or other Professional Debt Management solutions, please call the number at the top of this page.

Brits delay divorces over debt management worries is a post from: Chiltern Debt Management

You wouldn’t think that banks and other lenders could be magicians, but they are increasingly causing debt management worries by one of their nasty “magic” tricks.

It doesn’t involve a rabbit and a hat, or a scantilly clad Debbie McGee-type assistant being chopped in half, but rather more a worrying financial trick of turning an unsecured loan into a secured version. Yikes.

Many high street lenders, who are still reeling from the effect of bad mortgage debt (defaults, missed payments, repossessions etc) are preparing themselves for an increase in the number of unsecured loan defaults (on things like personal loans and credit card debts).

The main problem for people who can not afford to maintain repayments on their unsecured debts, is the increased likelihood of the bank or building society seeking a “charging order”.

This goes against the main attraction of an unsecured loan, in that it isn’t “secured” to a property. It is unsecured, so your home shouldn’t be affected if you start experiencing debt management issues.

However, if you default on the payments and the lender is successful in their attempt to seek a charging order, this effectively turns your previously ‘unsecured’ loan into a secured one, and places a 2nd charge against your home.

This can be avoided though if you seek impartial debt advice as soon as you realise that you may be unable to maintain any of your credit agreements. Reputable debt help organisations can offer simple debt advice and suggest ways for you to get out of debt that are suitable for your circumstances.

In some instances, they may also recommend a professional debt management solution to alleviate and control your mounting debt problems.

Professional solutions include Individual Voluntary Arrangements (IVAs), Debt Management Plans (DMPs) and Trust Deeds.

A Debt Management Plan (DMP) is a flexible way of repaying multiple unsecured balances, but makes managing them much easier as there is only a single monthly payment to make. This payment is distributed to the people that you owe money to on your behalf and is calculated to always be affordable to you.

It’s flexible (and always affordable) because if your financial situation changes, your payment can be updated to reflect this – so if your income drops you can lower the monthly payment. Likewise if you start receiving more income, through a promotion perhaps, your monthly payment can be increased so your debt problems can be repaid quicker.

The amount you pay is based on your income, minus your priority payments – rent/mortgage, utility bills, council tax, food, travel to work, childcare etc. The remaining amount is called the “disposable income” which then goes towards repaying your creditors.

An Individual Voluntary Arrangement (IVA) works in a similar way to a Debt Management Plan, but is a more formal solution. All unsecured balances are still gathered into a single affordable payment but this is repaid over a fixed period of time (usually five years).

An IVA involves an agreement with the people you owe money to which is legally binding and requires the services of a qualified Insolvency Practitioner. This agreement protects you from your creditors changing their payment demands.

Once the IVA term has been fulfilled, all remaining unsecured balances are written off – so effectively you walk away debt free.

Trust Deeds are in essence an IVA but for people living in Scotland. They are usually repaid over three years.

For immediate debt advice, or for further information on debt management solutions, please call the number at the top of this page.

Lender’s “magic” trick causes debt management worries is a post from: Chiltern Debt Management