Recent statistics from the Insolvency Service has found that personal insolvency has risen by 18.5%, meaning more people are letting debt get the better of them.

John Fairhurst, managing director of Payplan, says: “The increase in individual insolvencies can be explained by three major factors: the lack of available credit leading to already indebted individuals ‘falling off the cliff’, lenders encouraging their customers to look at the whole of their financial situation and seek independent help for their debts and the current economic crisis, leading to previously financially sound individuals unable to handle their debt commitments.”

In many of these cases the borrower is already ‘falling’ – they have let their problems get the better of them and have got into a situation where no financial adviser of money lender will be able to help them. The key is to get advice and help long before the situation gets too bad. Talk to your lender and talk to an adviser and see what can be done to avoid the worst.

Fairhurst adds: “This January alone, we have seen a 14% jump in the number of overindebted consumers seeking help from Payplan. This number was by a huge increase in the number of debtors referred by lenders. This huge increase in calls resulting from lender activity shows a demonstrable commitment to responsible lending and treating customers fairly.”

This is a good sign – lenders are ready to work with those in debt. This means there will be more opportunity for financial help in the form of remortgages, equity release and secured loans. The lenders do not want borrowers to get into difficulty – they want them to talk to advisers, debt specialists and mortgage brokers to help clear up any financial messes for good.

SOURCE: Insolvency Service, Payplan, 06/02/09

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If you are worried about money and have become depressed, angry and insular this Valentine’s Day might be the perfect time to admit you have a problem and become a bit more open.

Cheshire Building Society is advising couples to talk openly about their finances this Valentine’s and not let money worries damage their relationships.

Relate, the relationship counselling service, recently reported an almost 60% rise in the number of couples seeking counselling in October and November 2008, compared to the same time in 2007. Growing fears of redundancy and financial insecurity have been blamed for the increase.

The best way to solve a problem is to share a problem, and that might be best done with a loved one to begin with. Money worries might seem like they are the end of the world, but they very rarely are and usually have a sensible, manageable solution.

So don’t let financial difficulties ruin your life, get some advice, get talk and begin coming up with some real solutions. A financial adviser will help you by coming up with some options, some financial products and some plans as a way to fix the problem. This might be a remortgage, maybe a secure loan or even a debt management plan.

SOURCE: Cheshire, 13/02/09

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Almost a third of UK couples who argue over finances have had more frequent arguments as a result of economic turmoil, showing that money worries are fraying relationships more than ever.

But there is some good news – nearly one in five couples say that the recession has prompted them to talk more openly about their finance, according to research from online payment provider PayPal. This willingness to talk openly about money will almost certainly help the one in ten couples who have seen the main breadwinner in their relationship change in the last twelve months. Almost two thirds of these couples have changed breadwinner because one of them has either lost their job or had a pay cut, while over a third have switched places following a new job, promotion or pay rise.

Carl Scheible, managing director of PayPal UK, says: “As the recession becomes reality, British couples are facing new challenges within their relationships. It’s good to see that difficult times are prompting us to talk about money, as it’s far easier to cope with financial worries when we’re open with each other about them. It’s also good to see that even in these uncertain times money is causing fewer arguments within couples in Britain than in many other countries, such as the United States and Australia.”

This research proves ones thing – talking about your money problems is much more constructive and rewarding than bottling them up. If you are hiding problems, talk to your partner and your friends, but also get some professional financial advice. Things might look black now, but once you get things out in the open you will suddenly realise you have options to solve your problems.

Remember, a problem shared is a problem halved – an adage that is important during this difficult time.

SOURCE: PayPal, 10/02/09

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One growing way to unlock equity in your home is to use ‘sale and rent back’ schemes, where unregulated firms buy people’s homes and rent them back to them to help them escape from their debt problems – this is something that should be viewed with extreme caution.

The Government last week launched an initiative to regulate the practice of sale and rent back, but there are still many problems associated with it. Some people are entering into sale and rent back transactions when this is not necessarily the best option for them – numerous tenants have being evicted as they are unable to afford the rent agreed. Also there is a lack of security for people entering into these agreements – landlords are imposing huge rent hikes resulting in tenants losing their homes when they then default on their payments

If this is something you have considered, or something that someone has approached you with, you must remember that there are options available to you. This might include negotiating with your current mortgage provider, selling your property on the open market, taking out a secured loan or even for older home owners using a regulated equity release product

Dean Mirfin, business development director at Key Retirement Solutions says: “In light of the current economic climate many consumers continue to struggle with their finances, and the danger of unscrupulous companies has never been so apparent.

“However, consumers should be aware that while the government has announced plans to regulate the sector full regulation is not expected until the second quarter of 2010. Sale and rent back is not the only answer for those looking to raise some extra cash. For consumers who are looking to release money tied up in their homes it is vital that they seek independent financial advice, this is to ensure they are aware of, and fully understand all the options available to them before entering into any agreement.”

SOURCE: KRS, 06/29/09

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Millions of consumers are still reliant on credit for day-to-day living costs in 2009 according to the Post Office.

The survey reveals over 10 million adults intend to use their credit card in the first part of the year for daily purchases such as grocery shopping.

It also found that 2.6 million people intend to spend even more on their credit cards than last year, with an average spend in January of £318. Worryingly, the trend looks set to continue, with 4.1 million card holders planning to spend less on each purchase but use their cards more frequently for general living costs throughout the whole of 2009.

With almost half of all credit card holders not planning to pay off their credit card bills in full each month, it might be time to reconsider whether using unsecured debt is the best strategy.
Az Alibhai head of lending at the Post Office says: “In the current climate, many people have little choice but to rely on their credit cards to fund more expensive purchases. However, what is worrying, is the trend for people to continue to rely on their cards for basic day-to-day purchases, which could be expensive if you only pay off the minimum amount on your credit card each month and have a high rate of interest.”

If you are living by plastic, it’s time to think again. The more that is amassed on a credit card, the greater the risk of missing rising payments. Talk to a financial adviser and see what you can do to change your spending and borrowing habits for the better.

SOURCE: Post Office, 04/02/09

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The Financial Services Authority has told lenders to stop selling single premium Payment Protection Insurance – a reminder that any PPI deal must be carefully considered and advised upon at all times.

Single premium PPI is when the insurance is added to the total cost of the loan, which means it accrues interest, and this in turn meant that in a number of cases the customer ended up paying back more than they reckoned.

Sharon Bratley, chartered financial planner at Fairinvestment.co.uk says: “Consumers will really benefit from this decision by the banks to stop selling single premium loan insurance.

“While loan insurance can provide valuable protection in these uncertain times – with people facing job losses and finding themselves unable to keep up with the repayments on their debts – it is vital that they are treated fairly and not sold something which is not appropriate.

“Some customers do not understand what PPI is when they are sold it, and are unaware of the costs involved. Often, they do not realise that they can shop around for PPI and do not have to get it from their loan provider, or even that they do not have to buy it at all if they do not wish.”

If you are concerned about payment protection on a loan, you must talk to an adviser. Advisers, as well as being mortgage and loan experts, they are also insurance experts. So talk to your adviser to see what needs to be done to safely and sensibly protect your loan repayments.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

According to new research from CreditExpert, the economic downturn may have broken the taboo of talking about money – which is great, because the best way to deal with debt is to talk about it.

The research reveals that more than half of us admit that we are now far more likely to discuss our personal finances today with other people than we were a year ago.

The credit web site says people are opening up about their finances because they feel better talking to people in the same boat and some want to get advice from people or establish if their credit situation is ‘out of the ordinary’.

This is great – those who stick their head in the sand will not solve their debt problems; it’s the ones who are open and ready to do something about it who will be able to beat debt.

Darryl Bowman, director of CreditExpert.co.uk, says: “It’s good to see people reacting positively and talking about their finances with those closest to them as sounding boards. As we open up about our finances, the easier it becomes to address issues. At the heart of the majority of financial decisions lies your credit history.”

It’s great to talk about debt, and family and friends will always be able to reassure and point you towards the best help. Hopefully that should be a professional adviser – someone who can listen and understand your situation fully. An adviser will be able to reassure and set you on a path towards debt management and control.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

You may have just seen your bills from the Christmas period and you might think it is time to sit down and really take stock.

If you have debts you may want to seriously consider slimming them down in 2009. And if your outgoings are just getting too much, you may want to find some way to ease the pressure.

The best way is to do this is by using the equity in your home – taking some of it out in the form of a secured loan may be able to help you get everything in order and ship shape for the year ahead. You can use the money to pay off debt or help with outgoings, meaning you have more time and space in 2009 to keep your finances trim.

But how much equity do you have in your home? What is your property worth? Maybe its time to see how much you are sitting on – you might be surprised with the results.

Talk to your mortgage broker and find out what you need to do to unlock some of your wealth. And it is your wealth – you earned it while you diligently paid your mortgage as your house price rose, so use it, wisely.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

UK personal debt swelled to a huge £1,456bn in November 2008 – proving more than ever that the unsecure debt bubble must be let down gently before it pops.

According to the charity Credit Action, this huge was an increase of £56bn on 2007 figures – meaning personal debt has now forged ahead of the UK GDP.

The only way people are going to be able to control this unrelenting mountain of debt is by consolidating and taking sensible steps towards securing and controlling the red.

Worryingly, the daily increase in UK debt is now a whopping £154m, with one person every 4.8 minutes being declared bankrupt or insolvent – and that’s no surprise when you find out that the UK is paying £252m in interest alone.

This has to change, and it can. If you are one of those who are part of this huge debt, take steps to secure all your responsibilities with a secured loan – you will find almost immediately that your life is much better knowing you are not paying nearly as much as that daily £252m. You will also be able to sleep a little better knowing your house will be safe, and you will not be one of the nearly 300 made bankrupt every day.

Debt is an ever-growing, dangerous thing. Don’t let it control you – control it instead with a secured loan.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

New research carried out for the Bank of England’s Q4 2008 quarterly bulletin has found that households in the UK have experienced a reduction in disposable income after meeting household bills.

The report also found that many households were finding their debt to be a burden, and were finding increasingly harder to find a way to manage that responsibility.

Simon Lamble, product director at Confused.com, says: “The pressure on household income has been increasing steadily over the past couple of years, and therefore it’s more important than ever for people to realise that there is a simple way to relieve some of that pressure, by exploring ways of reducing their fixed household costs.”

One such way to relieve pressure is to consolidate your debts by using a secured loan. Taking a lump sum from your property and using it to turn all your debts into one manageable payment can almost certainly lower your monthly outgoings and free up your budget.

If you think you need something to unlock your financial problems, talk to an adviser about taking out some of your home’s equity as a secured loan. It’s quick, it’s simple and it can give you a little more space to think and breathe in 2009.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.