Nicon Debt Management » debt

New measures in place for credit card users

admin — Tue, 20 Apr 2010 13:42:52 +0000

New proposals have been brought in to try and provide greater protection and flexibility to credit card users in the UK, according to recent reports.

The new measures form a combination of the proposals that were put forward by the government and proposals that were put forward by lenders. The government had put forward a range of proposals originally, but the credit card industry defended some of its methods with a lengthy report to respond to those proposals.

Whilst the package of measures does not go quite as far as some industry officials may have hoped they do provide some additional protection and flexibility for credit card users.

There had been talk of the minimum repayments being increased for credit cardholders but there was concern that consumers would struggle to manage, especially if they had more than one credit card.

However, lenders will have to charge new account holders a minimum of 1 percent of the amount spent, plus enough to cover any fees, interest, and charges.

The Consumer Minister, Kevin Brennan, stated: “In our consultation it was made quite clear by consumers that they might not be able to manage their current debts if they had to pay off more each month. People with several cards would have had less flexibility to deal with their debts.”

For this reason existing cardholders with balances on their cards will continue to make the minimum repayment requested by their individual lenders.

A number of measures have been put into place as part of the proposals, which are expected to come into play at the start of next year.

This includes a ban on increasing credit limits for those with financial problems, a sixty day period for cardholders to reject any increase on their existing debts, and the opportunity for cardholders to opt out of interest rate increases.

Those that want to reject increases will have to close their accounts, but will be given reasonable time to clear the balance by their lender.

New measures in place for credit card users is a post from: Nicon Debt Management

Debt related test case to be decided early in New Year

admin — Sun, 17 Jan 2010 10:18:47 +0000

According to reports the decision on a test case relating to debt repayments is set to be made early next year, and once the decision has been made the fate of around 100,000 borrowers who are trying get rid of their debt will have been decided. Like the recently decided bank charges test case, which was started in January 2008 and has only recently been concluded after the banks appealed to the Supreme Court, the current High Court test case into repayment of debts could end up going further.

The test cases relate to borrowers who are trying to escape their debt by stating that lenders have breached regulations relating to the Consumer Credit Act. Many borrowers have refused to make repayments on their debts because of this, and the test case is designed to determine whether the cases have merit. If the judge decides that they do then this could enable many more borrowers to escape their debts under the same claim.

The claim that the cases are making is that the lenders have not been able to provide them with a copy of the original loan or credit agreement, which is something that they are supposed to be able to do under the Consumer Credit Act. Many are claiming that because the lender has been unable to provide this the debt is not enforceable and have therefore refused to make repayments on the loans.

The Office of Fair Trading has said that some borrowers have become too reliant on technicalities that they think may get them out of debt, but which may not actually be effective. The OFT said that in some cases consumers had been subject to misleading information, adding: ‘As a result, numerous disputes have been generated over whether a request has properly been made, whether the duties have been complied with and whether as a consequence the agreement can be enforced.’

Increasing credit card defaults making recession worse

admin — Tue, 18 Aug 2009 08:31:49 +0000

It has been claimed that the recession in the UK is being made worse by the rising level of credit card defaults that have been seen recently. According to reports families are being forced into a very difficult financial situation, with tens of thousands of families being affected by the high level of credit card defaults.

Officials from the Organisation for Economic Co-operation and Development claim that British families have the highest debt levels of any major economy, and this is driving many of them to financial ruin.

Between April and June of this year banks are said to have written off around £1 billion in credit card debt, and these figures are expected to be confirmed over the coming weeks in a report from the Bank of England.

The figure is said to be the highest since the last recession in the early 1990s, and is sixteen times higher than in 1997 when the current government came into power. It is also expected to continue rising over the course of this year.

One insolvency specialist stated: ‘More and more people are staring financial ruin in the face. The number defaulting on their credit card debts is growing, and therefore the number of personal insolvencies will grow over the next two years. We have lost the value of thrift in this country, and so people don’t have any savings to fall back on. This is all very well when people are earning, so they can afford to service their debt, but if they lose their job they’ve had it.’

The Tory Party put the blame at the doorstep of Prime Minister, Gordon Brown, stating: ‘The thousands of families being pushed into credit-card default is the human face of Gordon Brown’s decade of irresponsibility.’

Increasing credit card defaults making recession worse is a post from: Nicon Debt Management

Warning for solicitors over debt clearance firms

admin — Wed, 13 May 2009 07:46:50 +0000

A warning has been issued to solicitors over accepting services from firms that claim to be able to write off people’s loans and credit card debts.

According to officials from the Solicitor’s Regulation Authority there has recently been an increase of misleading adverts, including ones run online, from firms that claim to be able to write off these debts for people. Some of these firms have claimed that credit agreements can be written off in many cases, as they are not enforceable, which the regulatory body has said is not true.

The regulator is also investigating ten firms under the solicitors’ code of conduct. Chief Executive of the SRA, Antony Townsend, said: “These adverts appear to offer an easy way out of difficulty to people who have debts they are struggling to pay. But many credit agreements do meet the legal requirements and, therefore, can’t easily be challenged as unenforceable.”

The warning is now being issued to solicitors telling them to be on their guard about these debt clearance firms, and those solicitors that do not heed the warnings could find themselves in very hot water.

If they do deal with these firms they could find that they are in breach of their code of conduct, and this could result in action by the Solicitors’ Disciplinary Tribunal, which could ultimately result in the solicitor being banned from practising. It has also been made clear that any debt firms that are licensed by the OFT, who then publish misleading material could face fines of up to £50,000.

The Ministry of Justice also printed details of claims that could be construed as misleading by these firms in a report last year, and this included a firm that was claiming that around 80 percent of credit agreements could not be enforced.

Warning for solicitors over debt clearance firms is a post from: Nicon Debt Management

Many Brits will retire owing money

admin — Sat, 20 Sep 2008 06:56:38 +0000

A recent report has shown how many Brits will retire whilst still owing a fair amount of money, and the data suggested that collectively Brits could retire with collective debts of around £66 billion. For the many that hoped their retirement would involve relaxing, seeing the world, spending time with loved ones, and not worrying about work or money this news comes as a blow, and reflects a worrying trend amongst those that are nearing retirement age.

One industry official from a debt charity group stated: ‘In recent years there has been a ‘buy now, worry about it later’ culture in the UK when it comes to borrowing, particularly on unsecured forms of credit. For many pensioners today these figures show it’s a case of ‘bought then, worrying about it now.’

Another official stated: ‘As the cost of living is on the up, these figures, even if they are only part reflective of pensioners as a whole, are of real concern. Retirement should be a time to enjoy yourself after all those years of hard work, yet one in 20 people in their 60s, 70s and 80s admit to constantly struggling to keep up with financial commitments or having fallen into arrears.

He added: ‘The cost of living for the elderly has surpassed inflation over the past decade therefore it is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt.’

Figures also showed that over the last twelve months contributory pension payments from adults have halved, and this will make things more difficult for the pensioners of the future in the UK.

Many Brits will retire owing money is a post from: Nicon Debt Management

How To Avoid Debt While Using Credit Cards

admin — Tue, 27 May 2008 11:30:32 +0000

Credit cards are responsible for causing countless consumers an immeasurable amount of debt. It is believed that the average debt incurred by American families can be as high as $8,400 but is usually much higher. Credit cards are a useful tool for creating ease and convenience in a world obsessed with material and image. With 40% of households spending more then they earn, credit cards are deemed as a necessity in order to keep up appearances.

The marketing strategy of major credit cards centers on the idea that ‘You made the money, why not reap the benefits right away? This ploy is so successful that credit card holders are now using plastic in places that were once dominated by cash transactions. This translates to nearly 24% of all transactions being made by credit cards, a staggering leap from years prior when consumers used cash to purchase their fast food meals.

With a rise in holders using credit cards and the use of them in places that were once dominated by cash, more and more Americans are facing mounting credit card debt. Credit card debt is easy to incur and not so easy to remedy, however, as credit card holders are beginning to see the damages that they have done to their own financial future they are becoming all to willing to work towards the breaking even point. So, how can one avoid credit card debt?

Credit card debt is becoming the norm in today’s society, but this does not have to be the case. There are several ways to avoid or reduce the debt gathered from credit cards and all it takes is time and patience, and a willingness to give up a few luxuries.

Credit cards are mainly used to keep up an appearance of opulence and material wealth. In today’s’ world of high technology and high fashion it is important to maintain the air of a well to do lifestyle. Living beyond means is a dangerous lifestyle that leads to debt and financial ruins if it is not dealt with in a timely and efficient manner.

The main point to remember about credit cards is this, it is not a substitute for money and any charge made will have to be repaid. Credit cards should, in ideal cases, be used only in emergencies. The car needs a new transmission or the dog needs an operation are examples of an emergency, a new handbag or football tickets are not. If something must be charged on the credit card make sure that there is enough in the bank account to cover the expense and then repay the total amount on the statement when it comes at the end of the month. This way late fees and higher interest rates can be avoided. Besides, timely payments made in full or nearly in full each month will look fantastic on credit reports which will help in a manner of areas such as car buying or home refinancing not to mention it will stave off debt.

A budget is a time tested method of saving money but can also be used to create a plan that will deal with overwhelming credit card debt. Decide what necessities are required like rent, utilities, car notes, groceries, and whatever other requirements are needed on a monthly basis and set aside that money either in a savings account or somewhere that will be safe for large amounts of cash. Decide how much debt is owed and decide how much you can pay towards that debt each month and stick to it. A popular way to keep up with these payments is by creating a calendar or a spreadsheet which will show the amount of debt and how much it will decrease with each payment.

Of course, a sure fire way to avoid credit card debt is to meet each monthly payment and charge only what you must and only what you can afford. Many credit card holders are now using the card for cash advances, vacation funds, and general purchases like fast food meals and small toiletry items.

While credit cards can be used for good by those that are responsible there are just too many people finding themselves deep in debt. Credit card debt can have a negative effect that ripples far into the future effecting job opportunities and even retirement plans. By regaining control of spending habits and becoming diligent and serious in reducing the amount owned even the most financially irresponsible individual can gain a new lease on life and avoid further credit card debt.

Recent additions:

How To Avoid Debt While Using Credit Cards is a post from: Nicon Debt Management