When Amigo announced it was seeking a Scheme of Arrangement on 21 December 2020, I said there were very few details and asked some questions. UPDATE: Amigo gave some more information about the Scheme on 25 January, see my article Amigo’s Scheme - timetable for approval & how it may work. But there weren't any of the useful numbers I had been hoping for, so I have not made any changes to the … [Read more...]
A Money Detox – seven steps to improve your finances
Want to be better with money in 2021? If you ate, drank and sat on the sofa far too much over Christmas, you may be thinking of detoxing your body and getting fit. A Money Detox is the same approach for your finances if your bank balance looks sick and your credit card bill looks bloated. Perhaps this isn't just a nice-to-do but you NEED to be better, because you have lost your job or … [Read more...]
My DMP is ending – when will my credit score improve?
A reader asked: "I have 6 months left on my DMP and I know my credit rating is rubbish. Will my rating improve once this is paid off?" That's a simple question, but it needs rather a long answer. This article is for people who are near the end or who have already completed their Debt Management Plan (DMP). If you are thinking of starting a DMP see How does a DMP affect your credit rating? … [Read more...]
Happy Christmas & a better 2021
Amigo seeks refuge from complaints in a Scheme of Arrangement
UPDATE - on 25 January 2021 Amigo published more details about the Scheme. See Amigo’s Scheme - timetable for approval & how it may work for my summary of what has happened. Amigo announced on 21 December 2020 that it is seeking approval for a Scheme of Arrangement in order to cap the amount it has to pay to customers who were mis-sold unaffordable loans. The announcement says: Whilst … [Read more...]
I’m in a DMP – can I get a mortgage?
A reader asked about applying for a mortgage when she is in a Debt Management Plan (DMP): "I have been in a DMP for 8 years and still have 6 to go as I still owe £16,000. With hindsight, I should have gone bankrupt! My parents will give us a 20% deposit in 2021, but they don't know about my debts so I can't use their money to end the DMP. Will I be able to get a mortgage?" I've written before … [Read more...]
Will you get a Bankruptcy Restriction Order (BRO)? Does it matter?
Here are some recent questions from people worried about going bankrupt and possible Bankruptcy Restriction Orders (BROs): I gambled a lot but stopped over a year ago. I want to apply for bankruptcy, but will I get a bankruptcy restrictions order? I have credit card debts which I can't pay as I have had to stop work because of a disability. I went bankrupt in 2003 and had a DRO in 2015. Will I … [Read more...]
The better alternatives to payday loans
It's become harder to get a payday loan as large, medium and small payday lenders have gone bust or stopped lending because of Covid-19. So where can you go if you need a loan and you are refused? Or if you want to avoid the horrendous interest rates? Get a loan from a non payday lender? You can divide alternative lenders roughly into three sorts The good - ethical lenders Even if you … [Read more...]
Barclaycard to hike minimum payments in January – are you affected?
Barclaycard emailed customers in November 2020 about changes to their credit cards. With the title "Dear [customer name], we're updating your T&Cs ", you may have ignored it. But many people will find their minimum payments are going to be increasing from 26 January 2021. And some of the increases will be very large. This affects Barclaycard holders with Cashback, Freedom, Forward, … [Read more...]
Coronavirus – 4 steps to take if you lose your job
A reader asks: Help! I have just been made redundant and I don't know how I am going manage, especially as we have debts. I'm only getting a few weeks redundancy pay. What should I do? A lot of firms are closing or making some staff redundant because of Coronavirus. If your firm has just closed suddenly, you may be worried about getting the pay for the weeks you have already worked, the pay … [Read more...]
When mortgage payment breaks end, can you pay your mortgage?
On 17 November 2020 the FCA confirmed its new mortgage payment break rules. You can have 6 months payment deferrals - sometimes called payment breaks or payment holidays - if you or someone in your household had had financial problems because of Coronavirus. If you originally had a three month payment break then went back to making the normal mortgage repayments, you can now get a second … [Read more...]
Can you afford your car finance now payment breaks are ending?
Coronavirus payment breaks have been a lifeline for millions since the first lockdown started in March 2020. But now they are being restricted... You may have lost your job or be worried that may happen. You may be back on furlough or your partner may have had their hours cut or a self-employed business may have been badly hit by Coronavirus. If you know you can't pay all your debts, bills … [Read more...]
3 month car finance payment breaks because of Coronavirus
In April 2020, the Financial Conduct Authority (FCA ) set out new rules for car finance lenders on how they should respond to customers who are affected by coronavirus. It followed the general "three-month payment breaks" approach used for other credit from mortgages to credit cards. In July, the FCA these rules were extended to allow for a first or second payment break to be taken up until … [Read more...]
Three mind tricks to help clear debt
Loyalty cards encourage you to come back for your next coffee, pizza or supermarket shop. If you are trying to get rid of problem debt, then you need to beware of the temptation to overspend your budget, well that's obvious! But let's look at why companies use reward programs. Exploring the psychology involved reveals three factors which could also help you to get out of debt. 1) Simple … [Read more...]
“When can I offer £1 to a debt?” – FAQs about token payments
A reader asked if he should offer a £1 a month token payment to his debts, wondering if his creditors would ever accept it. The simple answer is that you should make token payments offers: TO non priority debts IF you CAN'T get a coronavirus payment break WHEN it is all you can afford AND you expect your situation will improve. In 2020 millions of people have reduced household incomes … [Read more...]
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