Are you being tricked into debt by your own mind?

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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?

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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

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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...]

Councils are too quick to send in bailiffs

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Money Advice Trust has published figures obtained by Freedom of Information requests that show the very high use of bailiffs by local authorities - 1.8 million debts were sent for collection  by bailiffs in the last twelve months. There is also a significant variation between councils in their usage.  Birmingham City Council is the "top referer" with over 80,000 debts sent to the bailiffs, but … [Read more...]

How to tell if you have CCJs

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If you have been ignoring your debts for a while and you have moved or thrown away a lot of letters, you may be worried that you have County Court Judgments (CCJs). The simplest and best way to find out is to get an overview of your debts is to get a copy of your credit record - that will show defaults, balances and creditor details as well as any CCJs. But accessing your credit records may alert … [Read more...]

Low income? Help with winter fuel costs

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On 3 October the government announced that the 2014-5 Warm Home Discount scheme will give a £140 discount on their electricity bill to a wider range of people. You may be able to get this help if you are a pensioner or have a low income. This discount is being provided by certain electricity companies, rather than by the government, so you have to get your electricity from one of them. All the … [Read more...]

Wonga loan write-offs and credit records

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Wonga announced last week that it was going to be compensating around 375,000 customers, mostly by writing off loans that are in serious arrears, because its 'affordability checks' may have been inadequate. It is said to be looking at what should be done about the credit records of these customers. This article looks at what factors matter when considering how to "correct" the credit files for … [Read more...]

Do a million need payday loan compensation?

Should a million get payday loan  compensation?

On 2nd October the Financial Conduct Authority (FCA) announced that Wonga had agreed to compensate an estimated 375,000 customers where Wonga's "affordability" checks are likely to have been inadequate. The common reactions were first that Wonga was being made an example of to warn other payday lenders and second that this was a huge number of clients...  But is this a fair approach by the FCA to … [Read more...]

Warnings Wonga hopes you don’t read

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Yesterday, 2nd October 2013, the Financial Conduct Authority (FCA) announced that Wonga has agreed to make significant changes to its business immediately. As a part of this Wonga is tightening its lending process to include better checks on how affordable a loan will be for a customer. It has also agreed with the FCA to compensate many customers who were affected by the Wonga's previously … [Read more...]

IVA completion certificate delays are too long

Still waiting for your IVA completion certificate?

In August the Insolvency Service's report on the previous year's complaints about Insolvency Practitioners noted that:  "a high proportion of complaints are about Individual Voluntary Arrangements (IVAs), in particular in relation to delays in the closure of the arrangement due to the supervisor of the IVA claiming Payment Protection Insurance (PPI) refunds".   The Insolvency Service's … [Read more...]

The Debt Counsellors – a new debt charity

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The Debt Counsellors Charitable Trust (TDC) is an interesting addition to the free debt advice sector.  TDC is a charity which provides telephone-based debt advice and debt management solutions to anyone living in England and Wales. It has been funded initially by a significant donation from The Emanuel Trust. TDC's official launch will be on 14th Oct but it is taking cases now either via its … [Read more...]

Discussing debt advice with CAB trainees

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I was giving a talk to some CAB generalist advisor trainees yesterday. They had just finished the debt section so in theory they knew all about it, which is a great time to talk about some of the practicalities of giving debt advice. As part of that I used a case study and it was interesting how often the three criteria that the FCA talked about recently - that suitable debt advice should be … [Read more...]

FCA warns debt management firms

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On 22nd September, the Financial Conduct Authority (FCA), which became the regulator for debt management firms in the UK in April 2014, issued a press release which warned debt management firms, payday lenders and credit brokers that: "Many firms are falling well short of our expectations and they will need to raise their game if they want to continue operating." Many of these firms … [Read more...]

Who should you tell if you have gone bankrupt?

you don't have to tell the world you are bankrupt

People often ask who they need to inform that they have gone bankrupt. The answer is usually no-one, because the Official Receiver (OR) will tell all your creditors! However this will take a few weeks, so there are some situations where you may want to tell people yourself because it will make your life a bit easier. Any debts where court proceedings are underway Bankruptcy gets rid of your … [Read more...]