Pension changes – the challenge for debt advice

Why pensions reform is a game-changer for debt advice

This is a guest post by Nick Lord. It argues that the new pension rules are a game-changer for debt advisers and that debt advice agencies need to put measures in place to ensure that their advisers can provide best advice post April 2015. Nick is a consultant on money advice and personal finance issues working with Government departments, regulators and firms. His past posts include senior Money … [Read more...]

How IVA, DRO or bankruptcy affect PPI claims

PPI after bankruptcy, SRO or IVA

If you have been insolvent - bankrupt, had an IVA or a Debt Relief Order (DRO) - then you need to know how this affects a Payment Protection Insurance (PPI) mis-selling claim. In some situations you are never going to get any compensation, so there isn't any point in bothering making the claim. Worse still, if you claim PPI before your DRO has ended it could be cancelled. And if you use a PPI … [Read more...]

Five reasons to reclaim PPI

a protection racket

Banks and credit cards have paid out over £16 billion so far to people who were mis-sold Payment Protection Insurance (PPI) . You may have been cold-called or got texts from companies offering to reclaim your PPI.  You might not have thought you could qualify, perhaps because you don't remember any PPI or because you don't see why you should get a refund. Here are five reasons to think … [Read more...]

An emergency fund – an essential first aid kit

first aid kit

In my last article I looked at an emergency fund for people who are paying back their debts normally. If you are already in a debt management plan (DMP), an IVA, a Debt Relief Order (DRO) or have gone bankrupt, then you probably have little 'spare money' each month. It may seem very difficult to save anything - but you need an emergency fund even more because you will find it difficult or … [Read more...]

Save an emergency fund or pay off debts?

squirrel

A lot of personal finance advice starts out with "Everyone needs an emergency fund". Is this always right? If you have debts you are paying off, accumulating an emergency fund will delay clearing the debts and increase the interest you pay on them... but having a rainy day fund will make it a lot easier to stick to your budget. This is another of those areas, like deciding how far to cut back, … [Read more...]

The largest IVA firms in 2014

IVA firms 2014

The following league table shows how dramatically the "top IVA firms" have changed since 2010. All firms who have registered more than 500 IVAs in the last year are included, sorted by the last year's figures. *** update - I have deleted the 2014 figures whilst they are being re-checked  Notes: 1) the figures come from Freedom of Information requests to the Insolvency Service 2) the … [Read more...]

Payday loans cap – three implications for borrowers

Cap on payday loans - 3 implications

The FCA announced on the 11th November that it will cap the costs of payday loans from 2nd January 2015: Initial cost cap of 0.8% per day. For new loans, or loans rolled over, interest and fees must not exceed 0.8% of the amount borrowed. So for a one month loan of £100, the interest and fees if the loan is repaid on time cannot exceed £24 If borrowers cannot repay their loans on time, fees … [Read more...]

Three mind tricks to help clear debt

Three mind tricks to help you clear debt

Loyalty cards encourage customers to come back for their next coffee / pizza / paperback. If you are trying to get rid of problem debt, then you need to beware of being enticed to overspend your budget, that's obvious!  But in this article I want to look at some of reasons why companies use reward programs, because exploring the psychology involved reveals three factors which could also really … [Read more...]

Pensions changes and people already bankrupt

old way thumb

After my article a few days ago on the 2015 pension changes and bankruptcy, I've been asked by several people how they could affect people who have gone bankrupt before April 2015, as that would be "retrospective legislation". Pensions and bankruptcy As I explained in the previous article, if someone goes bankrupt their pension can't usually be touched in bankruptcy. But following a legal … [Read more...]

2015 pension changes may hit older bankrupts

2015 Pension reform - the implications for bankruptcy

The Pension Reform changes from April 2015 will have major implications for older people with debts. The most obvious is that if you are over 55 you may have a new option of withdrawing some or all of your pension pot to repay debts. This article looks at what the implications might be for people over 52 who go bankrupt. Why 52? Because there is a period of three years after someone goes … [Read more...]

Can you go bankrupt soon after getting a loan?

facts-evidence-lies-thumb

People sometimes ask if they can go bankrupt after borrowing money recently. Yes you can; as I have discussed here, you are entitled to go bankrupt if you cannot repay your debts - bankruptcy won’t be refused because it seems you have “behaved badly”. However, if you have recently borrowed money, there may be consequences depending on your situation, so you need to know about these as they may … [Read more...]

Are you being tricked into debt by your own mind?

How "present bias" makes it harder to get out of debt

Have you heard of "present bias"? It's not wanting a jumper for your birthday rather than a bottle of wine, it's a behavioural economics term for a self-delusion that everyone suffers from to some extent. It affects many areas of life and one of the most important is making poor decisions about money - present bias makes it easy to get into debt and much harder to climb out. All too often we … [Read more...]

Should I overpay my IVA?

bike-IVA-rocky-road-thumb

If your IVA is going well, a few months in you may be feeling pleased but wondering if it’s a good idea to start paying in a bit extra so your IVA ends sooner. Lots of debt questions don’t have easy answers but this one does - No! Let’s take an example with simple figures: Mr X has unsecured debts totaling £18,000. He has an IVA approved for the normal five-year term, paying £200 a month, that … [Read more...]

A friend owes me money

iou thumb

People often ask what they can do if a friend owes them money, it is possible to sue? Perhaps you took out a loan or bought something with your credit card for the friend because you had a better credit rating - or perhaps you just lent them the money. And now the "friend"  isn't repaying you. There often isn't a good solution here, but this article looks at whether it is sensible to take legal … [Read more...]

Too many calls from creditors?

phone calls from creditors

Creditors aren't allowed to harass you. They are allowed to ask you to pay the money you owe and to contact you to about your debts, however too frequent phone calls are unreasonable and cross the line into harassment, which is illegal. If you are getting too many phone calls from debt collectors, there are practical steps you can take to stop it. How many is "too many"? In this news story, a … [Read more...]