Nicon Debt Management » debt management

Get your debts under control this year

admin — Wed, 24 Mar 2010 10:49:01 +0000

Whilst most of us would love to be free of debt many of us have had little choice but to borrow money for various things other than our mortgages. Credit cards, loans, store cards, overdrafts, and catalogues have all become a part of life for most people, and many people get themselves into a spiralling level of debt getting to the point where they can barely manage to keep up with their repayments.

Whilst getting into debt is unavoidable for most of us it is possible for those that are struggling with their debts to take action to try and ease the situation. The measures and options that are available to you will depend on a number of things, such as your personal situation and circumstances to the level and type of debt that you have. It is a good idea to look at the various options that are open to you, as some resolutions will work more effectively than others.

Over the past couple of years in particular many people may have found themselves deeper and deeper in debt, with financial problems having affected their finances to the point where they have been living on credit. Being in debt so deeply can really drag you down, and this is why it is so vital to take action as early as possible in order to get things sorted out with your finances and ease the stress that debt can cause. Some of the many solutions available are outlined below:

Consolidation: Consolidating your debts can prove to be one effective option for those that want to try and reduce their monthly repayments and make their debts more manageable.

This is an effective solution for those that have a range of different unsecured debts such as credit cards, loans, overdrafts, etc. In order to get a good rate on a consolidation loan you will need to have a pretty good credit rating, but if you are able to get this type of loan you can wrap up all of your other debts into one, cut the number of creditors that you are dealing with, and reduce the amount that you are paying out each month.

Debt management plans: If you are in a situation where your debt repayments are taking up a large chunk of your income, leaving you short of money for other essential payments, it is worth considering a debt management plan. There are various debt charities and agencies that can help to set these up, and you should find one that does not charge a fee.

Under a debt management plan you could reduce the amount that you are paying to each creditor by a significant amount and simply pay over a longer term until it is paid off. The interest on your debts is often frozen under these plans, and you usually make one payment to the debt management company which will then distribute the payments to your creditors.

IVA: If you are really struggling with your debts, you have over £15,000 in unsecured debts, you or your partner is working, and you meet the necessary criteria you may be eligible for an IVA.

This is known as a softer alternative to bankruptcy, and is not something that should be taken lightly to escape debt. However, for some people that have no other option it can be an effective solution, and in most cases you will pay a reduced monthly payment to be distributed amongst your creditors for five years, after which time the remainder of your debt will be written off.

Get your debts under control this year is a post from: Nicon Debt Management

What are the options for consolidating credit card debt?

admin — Mon, 08 Mar 2010 09:45:03 +0000

A number of recent reports have revealed that credit card debt in the UK has been rising, and on a per person basis the level of credit card debt in the UK is said to be over £5000 each. The credit crunch and the recession have both taken their toll on households across the UK over the past couple of years, and this has resulted in many people struggling financially.

During the recession many people did their best to cut back on the amount that they were spending, and rather than accruing debt they decided to make payments to try and clear existing debts to ease their financial situations. However, inevitably there were many people who were unable to do this as a result of their finances, and in order to cope with essential payments such as their mortgage repayments, rent payments, and day to day essentials had to turn to their credit cards.

On top of this the recent Christmas period has also affected the level of credit card debt, and following another turbulent financial year many people did not have enough money put aside to pay for their Christmas purchases and once again had to turn to their credit cards. With credit card bills having now been sent out after the Christmas period a large number of cardholders will found that they cannot cope with repayments on their cards.

As a result of all of these factors industry experts are now expecting the number of credit card consolidations in the UK to increase, as consumers rush to take action to make their credit card bills more affordable and relieve the financial strain. The soaring number of personal insolvencies in the UK has already given an insight into the problems that consumers are facing with their debts, and for many consolidation may now be necessary to cope with their finances.

There are a number of options available to those that are looking to consolidate their credit card debts, and in some cases this can be a really sensible solution as it can mean reducing interest and cutting repayments, which can subsequently mean reducing the risk of missed and late payments, CCJs, and black marks on your credit report. A consolidation loan is one of the solutions that consumers can go for, and these loans can be used to wrap up credit card debt as well as other smaller, high interest loans, catalogues, store cards, etc.

Another option is to go for an interest free balance transfer credit card, and with these borrowers can transfer debts from multiple existing cards up to the new credit limit, and can then enjoy a generous period of interest free credit to clear the transferred debt. For those that think they may need longer to clear their transferred debt a life of balance transfer is another option, and whilst these do charge a low rate of interest on the transferred balance the interest rate is far lower than the standard and it means that the low rate will be applied for the life of the transferred balance providing more time for the balance to be cleared.

What are the options for consolidating credit card debt? is a post from: Nicon Debt Management

Many people facing insolvency

admin — Thu, 05 Feb 2009 10:26:10 +0000

A report that was recently released by KPMG claims that the number of people that face insolvency over the course of this year could soar to record levels, as the global credit crunch coupled with the recession and huge job losses wreak havoc across the nation.

Officials from the firm have now predicted that around 150,000 people in the UK will enter into debt management programmes, IVAs or file or bankruptcy over the course of the year, which is up sharply from the estimated 104,000 in 2008.

The firm has stated that many people that have a lot of debt or have been spending frivolously on holidays and the like will not be able to cope with the financial effects of the economic downturn, and eventually will have no other option but to seek insolvency. Latest figures have already shown that there has been a sharp rise in personal insolvency numbers. In 2008 KPMG estimates that lenders had to write off around £1.1 billion in bad debt over the course of the year.

Mark Sands, KPMG’s director of personal insolvency, stated: “By the time people realise the extent of the problems, their total debts would have swelled by interest, charges and more borrowing to cover minimum repayments.”

The firm said that in 2008 around 2500 people entered into an Individual Voluntary Arrangement with total debts of over £100,000.

Mr Sands added: “Those carrying high levels of debt will be ill-equipped to tackle the effects of the downturn such as a reduction in income or a period of unemployment. Many faced with these difficulties will find that their options may be limited. Formal insolvency will, for many, be the only way out.”

Many people facing insolvency is a post from: Nicon Debt Management