Debt news roundup – Mar 1st 2015

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It's been a really busy week for news about personal debt - did you miss something interesting?  Here is my personal selection. 23/02/15 Solicitor's Journal article on last week Judicial Review: Southwark Council unlawfully turned away homeless people Student debt - puts many children off going to uni and will cost the UK tax payer a fortune. This Mirror article includes a table on … [Read more...]

When can I offer a token payment to a debt?

Should you only pay £1 to your debts?

A reader asked if he should offer a token payment to his debts, wondering if his creditors would ever accept it. The simple answer is that you should make token payments offers IF it is all you can afford AND you expect your situation to improve at some point. Let's look at the problem in detail, including how your creditors are likely to react. What is a "token payment"? Normally if you … [Read more...]

Payday loans – competition comes too late

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After a 20-month investigation into the payday loans market in Britain, the Competition and Markets Authority (CMA) has published its Final Report. Its main proposals, however, appear to have been largely overtaken by recent events. The CMA report proposes increasing price competition between payday lenders in order to help borrowers get a better deal. Payday lenders will have to publish … [Read more...]

Debt news roundup – Feb 22nd 2015

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Universal Credit, council tax arrears, low pay, tax credits and lots more - here is my personal selection from the last week's news about personal debt in Britain. If you are too busy helping people with debt to spend much time on Twitter or reading the newspapers, it's easy to miss some interesting articles. Lots of articles on 16/02/15 on Universal Credit because of the roll out to more … [Read more...]

Bankruptcy timeline – how long does it take?

What happens when? A bankruptcy timeline

This bankruptcy timeline shows WHAT is likely to happen and WHEN if you go bankrupt in England, Wales or Northern Ireland. Some of the times are fixed - the bankruptcy marker is definitely going to drop off your credit file after six years. Others are less definite, but the indications in the timeline here should be right for a large majority of the people who go bankrupt. There are notes below … [Read more...]

Repossession after bankruptcy – be careful!

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What do you need to do if you want your house to be repossessed soon after you go bankrupt in England, Wales or Northern Ireland? Perhaps the house is unaffordable, has negative equity, or it's the wrong size for you. For whatever reason, you want to move out, are happy for the mortgage lender to repossess and may want to "hand back the keys" as fast as possible to get it all over with. The … [Read more...]

Credit cards – to close or not to close?

Should you close an unused card?

If you have a credit card with a zero balance, should you close it? Would cancelling it improve or harm your credit score? This is important to get right if you are trying to clear your debts as fast as possible or if you are hoping to get a mortgage soon. Here are the main arguments for and against closing the credit card: No simple answer There are five arguments for and five against … [Read more...]

How to write letters about debts – with templates

A set of letters for common debt problems

There are a lot of sample letters on the Internet that you could use to write to banks or other lenders, debt collectors, or regulators. I've collected the most frequently needed ones in this article. But first, how and when should you use these debt letter templates? Writing debt letters There are four key points: 1)  Don't write anything that you don't understand. Just because a template … [Read more...]

Credit cards – the minimum payment trap

How to avoid the minimum payment trap

Do you only make the minimum payments on your credit cards? Lots of people do - over a million people in Britain have only paid the minimum amounts for more than year. If money is tight, this may feel like your only option, but do you know how much it is costing you? Why credit card minimums add up to so much Credit card minimum payments drop each month by a little bit. That might sound like … [Read more...]

Debt consolidation – a Credit Union case study

North London Credit Union staff and volunteers with Bishop Peter Wheatley, recently retired Bishop of Edmonton

This is a guest post by Julia Daniel, General Manager at North London Credit Union. Paying less interest is an important weapon in getting your debts under control and paid off, as the case study she discusses shows. You can find out what Credit Union you could join here.  A debt consolidation case study When Marie (not her real name), a council nursery worker with three children, applied … [Read more...]

No council tax to pay in Feb or March?

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Many people pay their council tax in ten installments, so in February and March there is nothing to pay. Some water companies also bill like this, collecting eight monthly payments with nothing to pay from December to March. It's not a very convenient approach if you like your monthly out-goings to be as regular as possible, but it does give you the bonus of a couple of very cheap … [Read more...]

How many DMPs succeed and how many fail?

How many DMPs work and how many fail?

There are a lot of uncertainties with a Debt Management Plan (DMP) - will your creditors agree to freeze interest, will the debt be sold on to a debt collector, how likely is it that you could get a CCJ etc. So it's understandable that people often ask how many DMPs actually succeed? But this is a surprisingly difficult question to answer, for two reasons. DMPs are not recorded The Insolvency … [Read more...]

How much should I offer to settle my IVA early?

Do you want to settle your IVA early?

An Individual Voluntary Agreement (IVA) is a formal, legal contract for a set period, usually five or six years. To finish your IVA sooner and have the remainder of your debts written off, you need to talk to your IVA firm, say how much you are offering and where the money is coming from.  How much you should propose as an early settlement depends on your situation and why you are making the … [Read more...]

Scotland takes the lead!

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This is a guest post by John Baird, Insolvency Director at Scotland Debt Solutions. He argues that Scotland has a more comprehensive and accessible range of insolvency options than England and Wales. Debt Camel doesn't cover Scottish debt matters, but I thought this comparison of the Scottish and the English approaches would be good for Burn's Night!  Should Scotland’s range of insolvency … [Read more...]

Payday loan compensation – can you claim?

Refunds for "unaffordable " payday loans?

When Wonga agreed to refund over 300,000 people in October 2014, I asked if more than a million people should get payday loan compensation. Wonga only refunded the people who had outstanding debt, but what about: borrowers from Wonga who paid off their loans, perhaps by borrowing elsewhere? borrowers from other payday lenders? These loans may well have been given without proper checks … [Read more...]