Wonga cuts interest to “only” 1,509%

wonga-no-celebration-thumb

The Financial Conduct Authority (FCA) is bringing in caps on the interest and charges payday lenders can charge from January. On 16th December, Wonga announced changes to its rates and charges to comply with the FCA's new rules: Wonga previously charged 1% interest per day - this is being reduced to 0.8%; its late payment charge is being reduced from £20 to £15; its previous £5.50 … [Read more...]

Bankruptcy – more bank account options

three banks

The British Banking Association has announced today, 15th December 2014, that access to banking is being widened with the introduction of new fee-free basic bank account for people with poor credit. It is expected that the new accounts will be operational by the end of 2015. Wider access will have a significant impact on people who go bankrupt, as at the moment most bank accounts in Britain are … [Read more...]

Debt snakes and ladders – are you winning?

Snakes-ladders-debt-game-thumb

A game of snakes and ladders with its ups and downs is a pretty good analogy for clearing debt - each month you should move at least one square forwards, repaying some of your debt. So what can you do to avoid the snakes, or maximise your chance of getting on a ladder? Here are three things to look at: 1) Get an emergency fund This may seem counter-intuitive: if you pause to save up an … [Read more...]

What should the default date for a debt be?

What should the default date be for a debt?

If you have had problems making debt repayments, when should this be recorded on your credit record as a "default"? And what can you do if you think the debt default date is wrong? These questions sound simple, but it can be a confusing subject so I'll try to untangle it. "The other kind of default" In this article I am looking at when a creditor marks your borrowing as "in default" with one … [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. Notes: 1) the figures come from Freedom of Information requests to the Insolvency Service except the one marked # see below 2) the data years run from September to August, so "2014" … [Read more...]

Is a PPI claim in a DMP possible?

yes you can claim PPI in a DMP

I've written recently about reclaiming PPI if you are paying off your debts or if you have been insolvent (bankruptcy / DRO / IVA). This article is the last piece of the PPI jig-saw: can you make a PPI claim in a DMP? And there is an extremely simple answer: The important point if you are in a Debt Management Plan is that you must not use a claims firm. Some refunds may not come as a cheque … [Read more...]

FCA acts to stop unfair, misleading loan brokers

payday credit broker pirates thumb

The Financial Conduct Authority (FCA) announced on 1st December that it was banning credit brokers from charging fees to customers from January 2nd 2015 unless they comply with a strict set of conditions. Credit brokers are middlemen - they don't lend money themselves. They can offer to find any length of loan but much the most common target is payday lending. This action is an unusual for the … [Read more...]

Are credit card holders getting a fair deal?

Are credit card holders getting a fair deal?

The Financial Conduct Authority (FCA) has announced details of its study into the UK credit card market.  This will look at how lenders and borrowers behave in order to identify what, if any, action the FCA might take. Christopher Woolard, director of Policy, Risk and Research at the FCA said: " We want to understand in more depth what drives consumers to make the choices they do and how firms … [Read more...]

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...]

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, … [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...]