My pick of last week’s news is The problem is poverty, however we label it. On the undeserving poor … and the undeserving rich.
Tweet of the week
Another football club pushing gambling. 🤦🏻♂️ https://t.co/IDGWlouxBN
— Gary Lineker 💙 (@GaryLineker) January 23, 2021
Debt news
Debt Relief Orders: what do we know, what should we do? Wearedebtadvisers: Debt advisers can register for event on Feb 1st – an opportunity for front-line debt advisers to reflect on the current Debt Relief Order scheme and ensure they are able to have their voices heard in the Government consultation.
Covid: Nine million people forced to borrow more to cope BBC: Those aged under 30 and those with household incomes of less than £10,000 were about 35% and 60% respectively more likely to be furloughed than the population as a whole.
Why reform of Support for Mortgage Interest (SMI) is needed now Money Advice Trust: the FCA can only do so much to address the challenge of Covid-19 mortgage arrears. The government needs to step in, urgently – starting with much-needed reform to the Support for Mortgage Interest scheme.
Mortgages:
- Rising property prices force buyers into longer mortgages Times (paywall): Increasing the term from 25 to 35 years lowers monthly repayments but increases the total amount of interest on a typical mortgage by 40 per cent.
- New mortgage lender Perenna claims it will let you lock in your interest rate for THIRTY years – but is such a long fix sensible? Mail: interesting, but Perenna doesn’t yet have the banking license it needs to offer any mortgages.
FCA proposes CMC fee price cap FCA: My view – a cap is long overdue but this is not the right sort of cap. Fees for standardised complaints such as affordability should be reduced dramatically, just as they were for PPI.
Why we’re moving into the near prime market – Moneybarn Q&A Credit Strategy (must register to read) Moneybarn’s commercial director on the car finance provider’s recent expansion into the near prime market, and why it has “aggressive targets”.
Amigo – my series of articles on the proposed Scheme continues with Is Amigo allowed to delay paying refunds? Does it have a DISP waiver?
Virtual enforcement — a new era for bailiff practices? StepChange: “In many ways, the ruling raises as many questions as it answers.”
Benefits & other news
The problem is poverty, however we label it Guardian: The prefixes ‘food’, ‘child’ or ‘fuel’ make life for 14 million poor Britons seem easily fixable. In truth, radical action is needed.
Low-paid workers in UK more than twice as likely to lose job in pandemic Guardian: Job opportunities increasing for higher-paid staff in sign of growing inequality
A survival guide to pensions on divorce Advice Now: Adding pensions into the [divorce] mix can be daunting, but not dealing with pensions can be a huge mistake.
Thousands on Universal Credit payments may get £62 less this month Sun: People who lost their job because of the pandemic were given a nine-month grace period during which benefits would not be capped… This month the exemption ends for the first group of people who started claiming Universal Credit (UC) at the very start of the pandemic.
Don says
Hello Sara
I recently mailed a comment under bankruptcy, due to poor advise from Citizens Advise.
They made an application for a DRO on my behalf, however the total debt was over £20.000, the application was cancelled.
I am hoping that I can reapply under the increased new criteria, if and when approved.
Will the previous DRO application affect my reapplying, given it was withdrawn.
Thank you
Don
Sara (Debt Camel) says
I think you will have to wait and see what happens here.
How are you getting on talking to Citizens Advice about this?
Don says
They are still checking my file, I don’t believe they are ever going to admit to anything
I’m not sure best way to proceed, via Ombudsman or try to find an interested solicitor or to take it to the small claims court.
I approached Payplan, who of course wanted me to take an IVA at £82.00 per month, however I have read many accounts of them asking for more towards the end of the period.
I asked about bankruptcy but was told I may loose some or all of my final salary pension scheme which I really don’t want.
Sara (Debt Camel) says
Go back to Citizens Advice and ask for a response to your complaint. If you are not happy with that, I suggest going to FOS. It is free and you can do it yourself.
If you have no assets, an IVA is a bad idea.
A final salary pension is NOT at risk in bankruptcy – who told you this, Citizens Advice or Payplan?
(Well the pension could be partly at risk if you take a tax free lump sum before you are discharged. Or it is being paid – then it is just like any other income, it would be taken into account when deciding if you can make monthly payments.) But not if it has not yet be drawn and they cannot make you do this.)
Don says
I will go FOS.
I should have stated that I am in receipt of my pension at £607 pm, I also had a lump some which was used to establish my business which has now gone.
My worry is how much per month they may want from the £607.00 which is my main income apart from state pension
Thank you
Sara (Debt Camel) says
ok if you are drawing your pension it is just another source of income. But if Citizens Advice thought you would qualify for a DRO they don’t think you have much disposable income? 5 out of 6 people who go bankrupt don’t make any monthly payments.
Don says
Hello Sara
Since your last post on proposed DRO changes etc, and as no one is chasing me, I have decided to wait a while to se what happens.
In the meantime I will put some money aside for a Bankruptcy application, either with the National Debt Helpline.
My remaining worry is during my discussions with Payplan, I was told that my over 50s life insurance policy’s, if I was to die during either applications, the payout values would be used towards my debts and would not be paid to my family .
Could you please advise.
Thank you
Sara (Debt Camel) says
with the National Debt Helpline.
Just to be clear, that is the name of a commercial company that tries to sell everyone IVAs. The real people to talk to are National Debtline on 0808 808 4000.
(You probably already knew this and it was just a typo. But it could be a disastrous one for someone reading this.)
Weatherman says
Hi Don
Does your over-50s plan name specific people who’ll get the funds if you die?
Din says
No I don’t believe so
Sara (Debt Camel) says
and does the insurance policy have a “surrender value” now? So at the end of the policy you expect to receive some money? Or does it only pay out if you die?
Don says
I don’t believe it has any surrender value
It only pay out when you die
I
Don says
Hello Sara
Further to my response about life insurance, I apologise for the delay, it was in my junk.
I still have ad no response from Citizens Advise however I believe what happened was, I gave them a up to date list of creditors, the the total amount was £19.354, this was in October 19, so I decided to apply for a DRO
However my credit files showed an old debt to Sainsbury’s of £3,200 that they included in the total application, making it over the 20k criteria, which I excepted as I didn’t know any different.
They then decided to wait for the 6 anniversary which was on 14 February 20, in order for the 6 year expiry, I’m not sure if this procedure is correct, I would have though if it was settled it was not a debt to be included.
Immediately after this date a did a recheck of all debt which had risen to just over £20k, I’m assuming due to interest rates being added by my creditors from the beginning of October 19 to February 20, something they failed to identify which I informed them of.
They then stated my DRO application would not be possible and advised to consider bankruptcy, I have been in limbo and poor health since.
Thank you
Sara (Debt Camel) says
The Insolvency Service is currently looking at increasing the DRO limit to £30,000. This may go live in May. See https://debtcamel.co.uk/proposed-dro-changes/