Debt Clear - Helping Clear Up Your Debt

Reduce Your Debt and Stop its Accumulation

Debt Help — Sun, 07 Nov 2010 19:01:32 +0000

If you are really serious about your goal to reduce your debt, you’ll have to scrutinise the methods by which you manage money and shop. There are so many tempting ways to spend money unwisely but you will never reduce your debt unless you maintain consistent discipline with spending and saving. You might have just recently seen the need to reduce your debt because you realize that it is snowballing. Here are some areas to focus on that will help you reduce your debt.

Stop going deeper into debt before you work to reduce your debt. Getting off the credit cards is somewhat like quitting an addiction. When you have finally kicked the credit card spending habit and begun to reduce your debt, you’ll wonder why you ever got into this situation in the first place. Today people have debit cards with major credit card logos and there really is no need for the plastic loan instrument. Even if your checking account runs low, it is better to utilise overdraft protection rather than accumulate interest and make no progress to reduce your debt.

Earning more than you spend is a very effective way to reduce your debt. You have to stop utilising credit cards as an extension to income for making ends meet. This requires finding creative ways to supplement what you already make. You can find a part time job, do some freelancing on the Internet, sell stuff at a car boot sale or sell unwanted items on the bidding sites. Of course cutting unnecessary expenses is another way to increase the power of your present income and reduce your debt.

Reduce your debt by finding new ways to shop. Don’t buy so many pre-cooked items the next time you go to the grocery store. You’ll save money that can be used to reduce your debt by learning to cook your own meals using fresh ingredients. This is also much healthier for you in the long run. Also remember to never go shopping at the grocery store when you are hungry because you will probably end up buying extra items not on your list.

Cutting back on unhealthy habits is a sure way to increase income and reduce your debt. Smoking is a very expensive habit in terms of both the price of cigarettes and the effects it has on your health. You don’t want to end up with high health care bills while you are trying to reduce your debt. People who smoke typically catch more respiratory illnesses requiring more visits to the doctor. Likewise alcohol is very expensive in terms of buying the product and the time wasted consuming it.

Learn to walk away from buying things you know you should not. This is a critical strategy to learn in order to reduce your debt. When you know something is out of your budget, do not buy it. Product vendors have all sorts of gimmicks to get you to buy and they really are not interested in seeing you reduce your debt but you must resist. Resist even if they are giving away free prizes just for watching one of their demonstrations. Never buy on impulse and sleep a night before making a decision. Also never carry your credit cards to avoid impulse buying and you will begin to reduce your debt very quickly.

Reduce Your Debt and Stop its Accumulation is a post from: Debt Management

The Pitfalls To Look Out For In Debt Management

Debt Help — Wed, 06 Oct 2010 17:20:31 +0000

If you didn’t already know it – debt management is a huge growth industry. There are more of us experiencing debt, and there are more of us who are experiencing the pain of repaying that debt. As with all growth industries though, there are some who are involved in debt management who have less scruples than others do. For this reason, it is always helpful to keep one eye open for some of the pitfalls you may come across in debt management.

Pitfalls of using a credit/debt counseling service in debt management

It should be stated at the outset that most credit/debt counseling services are reputable. However, there are those who make their living help to manage the debt of defaulting debtors – and they do little to “help”. As such, if you are thinking of seeking the assistance of a credit/debt counseling service, keep in mind the following:

Always try to use a non-profit credit/debt counseling service.
Make sure the credit/debt counseling service is registered.
Check that the debt being managed by your credit/debt counselor really needs to be managed. The reason you need to do this is because most credit/debt counselors who are not non-profit will charge you a commission and monthly fee on the overall debt being managed; therefore they have an incentive to boost your total managed debt amount.
Make sure that your credit/debt counselor is working in your interests, not your creditors; for example, have they tried to obtain a reduction (sometime known as “haircut”) on your interest rate and outstanding interest repayment amount?

Pitfalls when doing your own debt management
If you decide to manage your own debt, rather than using the services of a credit/debt counselor, make sure that you keep an eye on the following:

You are not paying any hidden fees for restructuring your debt or making early repayment of your debt;
That the overall Annual Percentage Rate of the interest repayment is less than you already pay;
That any security you provide is not going to be lost.
Where you consolidate debt, that by putting all your eggs in one basket you are not giving your new creditor complete power over your financial affairs; for example, what happens if they call-in the refinanced loan? If you have lots of creditors, it could be harder for your creditors to achieve this.
That your overall total repayment amount is not going to be significantly higher than if you continue paying the debt now – albeit in areas. This should be carefully reviewed even if your monthly repayments are significantly less. For example, if you now pay £1,000 per month for 1 year, you’ll end up repaying less than if you have to pay £500 per month for 3 years. Although the second system may sound more attractive when looking at bottom line, when you consider the total period you have not actually done yourself any favors.

Whatever you decide to do, please make sure that you have at least one conversation with your local consumer affairs bureau before you embark on your debt management program to get some guidelines of whether or not you are doing the right thing.

The Pitfalls To Look Out For In Debt Management is a post from: Debt Management

Dealing with debt collectors

Debt Help — Wed, 06 Oct 2010 11:47:09 +0000

Debt collection agencies are leeches who make no positive contribution whatsoever to society. The finance industry is morally degenerate, banks and credit card providers want to have their cake and eat it. If they make a mistake the taxpayer pays for it. However if you make a mistake you pay for it big time.

If the banks were prepared to work with people in financial trouble, so many problems could be solved.

Debt collectors use telephone harassment as one of their major weapons. Everything they do breaches the OFT guidelines and breaks several laws, and yet no one will ever do anything about it.

Below are a series of videos that will help educate you on how to deal with Debt Collection Agencies

Debt Collection Agencies – Background Part 1

Debt Collection Agencies – Background Part 2

Debt Collection Agencies – Banking Security 1

Debt Collection Agencies – Banking Security 2

Debt Collection Agencies – Communication Security 1

Debt Collection Agencies – Communication Security 2

Debt Collection Agencies – Telephone Harassment 1

Debt Collection Agencies – Telephone Harassment 2

Debt Collection Agencies – First Contact 1

Debt Collection Agencies – First Contact 2

Dealing with debt collectors is a post from: Debt Management

Trust Deeds

Debt Help — Fri, 13 Aug 2010 15:38:31 +0000

A trust deed is employed in Scotland and is a voluntary but legally binding formal arrangement between a debtor, a trustee and their creditors. A debtor, an individual who often has a very large sum of debt they need to clear, volunteers to transfer their assets to a professional Insolvency Practitioner, known as a trustee. It is then the responsibility of the trustee to administer these assets between the creditors.

A Trust Deed represents an alternative to sequestration and is a far less formal process. It can also enable individuals to avoid some of the legal aspects which follow from being made legally bankrupt, as is the case with sequestration.

Advantages of a Trust Deed
The main advantage of a Trust Deed is that it lessens the stress on the debtor. Because all correspondence and creditor queries go through the trustee, the debtor is no longer forced to deal with them all. Therefore, a trustee needs to be someone who is dependable and reliable.

It gives the debtor control over the situation rather than the creditors. A Trust Deed is also a much cheaper and far more flexible option than segregating your assets to pay off your creditors.

As long as specific requirements are met, a Trust Deed is able to be documented in the Registrar of Insolvencies and deemed ‘protected’. This means that all creditors, whether they agreed to the terms or not, are unable to petition or try any other method to retrieve the money that is owed to them, as long as the debtor adheres to the Trust Deed terms.

The duration of a Trust Deed is fairly short compared to many debt management options and the debtor will be free from their debts approximately 3 years after the date it was granted.

Disadvantages of a Trust Deed
Once a Trust Deed has been granted, but not ‘protected’ it only binds those creditors who agreed to the terms and therefore it means than any other creditors will still need to receive their payments. Therefore, those creditors not bound by the Deed are still able to petition for the debtor’s sequestration. As a result, if a home owner is unable to pay their unbound creditors in full via another source they may be forced to sell.

One condition of your Deed becoming ‘protected’ is considers all of your property, and any property the trustee holds may be sold by them should it be in the interest of the creditors. Your trustee is also able to file for your sequestration if you are unable or unwilling to co-operate with them. Additionally, it may appear that your trustee is working with your creditors best interests in mind as they are able to sign for your petition if they feel it would be a better option for them.

Going through the process of a Trust Deed will result in the debtor being unable to hold the Director position of a limited company, additionally; several other public offices shall also be off limits.

For help with getting a trust deed please contact us here

Trust Deeds is a post from: Debt Management

Paying back CCJs?

Debt Help — Fri, 13 Aug 2010 12:13:27 +0000

I have been paying back a county court judgement (ccj) for over 2 years. I now want to pay it back completely to allow my credit score to start improving, will this work or am I best off just paying it back monthly which will take me 2 more years?

The reason I want to improve my credit score is that my mortgage fixed term ends in 2 years and I want to get a good rate if I change lenders. Could I get an early settlement amount from the solicitors?

Answer

You may be able to get an early settlement, although its not as likely as a normal debt. With a normal debt, they offer a lower amount to encourage the person to pay up. With a CCJ, you have been ordered to pay anyway, so they don’t need to offer incentives. Some do though, so its worth a try.

Its not going to make that much difference in terms of credit whether you pay now, or over the coming months. When you pay in full, you can have the CCJ marked as satisfied, but it does not come off your credit file. Having it satisfied is better obviously than it not being, but either way it still has a big negative effect on your credit. You aren’t going to be clear until 6 years after the CCJ was added to the credit file.

It is probably best though to clear it, purely because its one less bill to pay, and you do get a sense of release when its paid off. You can then put it behind you and move on.

Paying back CCJs? is a post from: Debt Management

Mortgage company debt

Debt Help — Fri, 13 Aug 2010 11:59:43 +0000

Can a mortgage company ask for a debt be repaid that is over 10 years old since anythings been paid?

Answer

They can ask you for the money at time, until the debt is cleared.

However, under the Statuate of Limitations Act, if there has been no contact between a debtor and a lender for a solid period of 6 years, then the debt can no longer be taken to court to get payment. As a result, if the debtor refuses to pay there is nothing that can be done, as there is no way to force them to pay. In this case the debt becomes statuate barred.

Its actually down to the lender to prove that the debt is not statuate barred.

However, if there is anything which counts as contact, then the statuate barred protection is lifted, and the 6 year period starts all over again.

As a result, on any communication you have to be very careful and state that you do not acknowledge the debt, and don’t sign any letters, just print your name.

Mortgage company debt is a post from: Debt Management

Debt is this right?

Debt Help — Fri, 13 Aug 2010 11:48:15 +0000

Does debt cease to exist if 6 years have passed since it was last asked for?

Answer

The debt does not cease to exist, however after a solid period of 6 years of no contact between the debtor and lender the debt becomes statuate barred.

This means that although the debt still exists, the lender cannot take the debtor to court to recover the debt. In real terms this means that if the debtor refuses to pay, theres nothing the lender can do it about it.

You have to be careful, as in any fresh contact in which you acknowledge the debt will break the statuate barred status and the 6 year period starts again.

As a result, in any letters you should put that you do not acknowledge the debt, and don’t sign them. Don’t mention anything about payment.

Debt is this right? is a post from: Debt Management

How do you clear a bad credit history from my current address?

Debt Help — Fri, 13 Aug 2010 11:36:24 +0000

The previous people who lived here before me were in so much debt they had a bad credit history.Whenever I want to get a catalogue or anything similar they wont let me as they just look at the address. Is there anyway I can clear it from my address so i can get catalogues?

Answer

Although years ago bad credit history was linked to an address, and a person with bad credit living there could affect everyone else at the same address, it was stopped a couple of years ago as its was so unfair.

Now debts are only linked to a person, not to an address, and the debts move with the person. Anyone living at an address does not affect anyone else there, unless they are tied in some way like husband and wife.

Unfortunately, this means that there is something wrong with your credit rating. It may be that you simply haven’t had much credit before, so you are an unknown quantity, or there is a mistake on your credit file, or something on there you didn’t know about.

I would get copies of your credit file from both credit agencies, experian and equifax, to make sure the info on there is correct. If its not you can write to them and get it amended.

How do you clear a bad credit history from my current address? is a post from: Debt Management

Debt Advice – £12,000 loan

Debt Help — Fri, 13 Aug 2010 01:46:17 +0000

I’ve got a £12,000 loan with HSBC which I’ve been paying for the past 24 months. Following being made redundant in September last year, I was unable to keep up with the re-payments.

After 6 months of unsuccessful negotiations with HSBC via the Citizens Advice Bureau, HSBC have now referred this case to their ‘in house’ debt collection agency (Metropolitan) I believe they are called. This took place yesterday!

My question is…what to the best of your knowledge are the EXACT steps the debt collection agency will take to recover the money and what are their powers to get the money back (repossesions, coming into my house, court) etc.

Thanks for your time and ill add extra info as requested.

Answer

No matter what you do do not refuse to pay your debt. Let them know you can pay only a specific amount, debt collection agencies will take on the debt which means you will owe it to them rather than HSBC. Wait until they make contact with you and explain the specific situation to them.

Bailiffs can not come into your property and take things without a court order, which courts do not hand out like confetti. If the loan is a secured loan on your home then they could repossess but this is not automatically done

Debt Advice – £12,000 loan is a post from: Debt Management

Debt advice – settlement offers?

Debt Help — Fri, 13 Aug 2010 01:34:37 +0000

A few years ago I applied for 2 credit cards and a loan, I was given more than I could pay back, and I was too busy enjoying myself to realise…bad bad idea.

Anyway, for the last 3 years I have made small payments to the 3 companies, and this isn’t likely to change as I don’t earn much. For example, I pay £10 a month on a £3000 debt. The interest has been frozen on these debts.

My parents have offered to give me £4000 to try and settle the debts. Each company will be offered 50% of the amount I owe as full and final settlement. The total I owe is £8000.

Has anyone got any experience with making these offers? Am I deluding myself thinking that there may be a chance they will accept these offers? I would be grateful of any advice.

Answer

If you’ve been in arrears and also under control with the debt recovery departments, there’s every possibility they’ll accept your offer of 50% total and final settlement. Especially if the lenders have now referred your accounts to a different firm for collection.

Be sure you put your offer in writing, explain that your parents definitely will bail you out with half the money, obtain acceptance in writing, and more importantly ensure you get a letter confirming the account is closed and that the credit reference agencies have been notified. You should follow this up in a few months to check your files have been amended correctly – they won’t be wiped but should show as “satisfied”.

Debt advice – settlement offers? is a post from: Debt Management