EuroDebt responds to a new report from the National Audit Office which indicates that some debt advice charities are struggling to cope with consumer demand for help.

Kevin Still, Director, EuroDebt, said:

“The charity sector does an excellent job in supporting individuals facing financial difficulties, but the reality is that there just isn't the resource for them to help everyone. The National Audit Office Report suggests that at least two debt advice agencies are refusing to take on new clients and others have waiting lists of up to 6 weeks for a face to face appointment with a debt adviser.

“Often the individual and families who most urgently need help are those with the higher levels of debt. So the longer they have to wait for help, the greater the problem gets.

“The other issue that is highlighted by the findings of the NAO report is that the model used by the debt advice charities is well proven to have less acceptance from creditors. The voluntary debt advice organisations focus on a self-help approach to debt management.

"These keep the onus with the individual on managing the relationships with their creditors and, unfortunately, this often means that they are less successful in getting interest frozen on outstanding debts or stopping debt recovery activity.

“We firmly believe that there is a place for both types of debt advice organisation. It is not uncommon for EuroDebt to refer people with very low disposable income to their local CAB. But the primary goal of EuroDebt is to act fast to help consumers take a responsible position with their creditors, especially where they have multiple credit cards and loans. We do this by notifying the unsecured lenders that the individual has entered a Debt Management Plan.”

EuroDebt aims to help consumers take a responsible position with their creditors, especially where they have multiple credit cards and loans, by notifying the unsecured lenders that they have entered a Debt Management Plan.

This involves no further borrowing and in the majority of instances lenders agree to freeze interest & charges, meaning that recovery activities stop, the debt balance will begin to reduce at a rate based upon the negotiated reduced payments to creditors and the consumer can begin to take control of their finances again. Payment proposals are presented to creditors in a consistent manner and all the figures quoted in the income and expenditure analysis will have been verified through a home visit.

A Debt Management Plan may be for a relatively short period ranging from 12 months to 3 years or a long-term plan that enables them to become debt free, potentially with some equity release for home owners in the future.

The flexibility of a Debt Management Plan sometimes allows clients to resume contractual payments where creditors accept EuroDebt's proposals of a reasonable offer for a transitional period until the client's circumstances change. For example; find new employment, return to work from long-term illness or maternity leave.

EuroDebt, unlike any other fee charging Debt Management Company, is the only debt management business that makes home visits a core component of its 'fact find' process, ensuring a complete picture of each individual's situation is gained.

Still continues:

“This is crucial. At this visit, the debt advisor is able to assess not only priority expenditure, like mortgage or rent, council tax and utilities, but any arrears on these payments. Repayment arrangements to clear arrears are a priority to protect a client's home and family. There are also instances where critical insurances have been dropped, like life insurance and home insurance, which may need to be re-prioritised.”

Posted 09/02/2010 08:30:17

At the end of last year the IVA Standing Committee issued its review of the IVA Protocol. Its objective was to establish the impact of the protocol on debtors, creditors and debt solution providers since its introduction in February 2008.

Individual Voluntary Arrangements (IVAs) were established in 1986 as an alternative to bankruptcy, aimed at enabling individuals who had assets or income (or both) to repay at least some of their debt, resulting in higher returns to creditors than bankruptcy. IVAs create a binding contract between debtors and creditors, enabling individuals to make manageable repayments over a period of time, normally 5 years, without incurring further interest.

An IVA proposal will be put to creditors and voted on. For a proposal to be approved at least 75% by value of the creditors have to vote in favour, once approved, the proposal is supervised by a licensed Insolvency Practitioner. Meanwhile, prior to approval, the creditors are able to put forward modifications to the proposal.

For brokers diversifying into debt solutions, the findings of the IVA Protocol review are important. The review emphasised the benefits of using a debt solution provider that is IVA Protocol compliant, as the number of modifications to a proposal can often reach very high numbers.

Interestingly, the industry perception is now viewed that an IVA is an alternative to a Debt Management Plan (DMP) rather than bankruptcy. There are approximately 4 to 5 DMPs for every IVA, which should be borne in mind when referring cases to a debt solution provider.

36% of debtors blamed ‘living beyond their means’ as the primary cause of their financial difficulties and almost 80% of debtors had been through one or more previous debt solution before embarking on their IVA. 71% of debtors had had alternative forms of debt relief formally discussed with them before they embarked on their IVA, with over 40% having tried some form of debt consolidation and just under 15% having tried re-mortgaging.

One of the regulator concerns remain that some companies are ‘flipping’ clients from one solution to another after several months to earn more fees. This practice is currently under investigation by the OFT and confirms the need to choose a provider that offers genuine all-round debt advice at the initial client meeting or consultation, often with the financial adviser sitting in.

The impact of the IVA Protocol has been to bring back into balance the use of an IVA as a very effective debt solution for highly indebted consumers with regular earnings and a reasonable level of disposable income. Base levels should be over £15,000 of debt with disposable income over £200 per month, though the industry average is over £50,000 of unsecured debt with disposable income over just over £300.

Posted 13/01/2010 10:42:06

Almost 4 million people (3,989,272) have already gone into debt to pay for Christmas this year, according to research released today by R3, the insolvency trade body.

The research also finds that over 6 million people (6,483,567) fear they won't have enough money to pay their bills at the end of the month due to Christmas spending, and 3 million (2,991,954) admit they're still paying off debts from Christmas last year.

Peter Sargent, President of R3 says:

“Christmas can be a treacherous time for people who are struggling already to make ends meet. While many people have been careful in their spending throughout the year, worrying numbers are set to break these good habits resulting in a financial nightmare for the New Year.”

R3 suspects that that peer pressure has a significant part to play, as research shows that a third of people (33%) 'feel guilty' if they fail to live up to the expectations of family and friends at Christmas time.

The impact of Christmas over-spending usually hits in the New Year. R3 members are expecting 154,355 personal insolvencies in 2010 in the UK, and the first few months of the year are likely to see the greatest number of casualties.

Peter Sargent says:

"Personal insolvencies hit record levels in 2009 and we usually see a rise in the New Year due to festive over-spending. We're urging people not to spend more than they're earning and to seek professional advice as soon as possible if debts start mounting up.”

If you are facing financial difficulties, struggling to repay your debts or your finances are getting out of control and you require some free debt advice regarding consolidating your debts with a debt consolidation loan, or finding another financial solution to manage your finances such as a debt management plan or IVA (individual voluntary arrangement), please give us a call at Debt Rescue Now on 08450 580 999 or click Apply Now and complete our simple 30 second enquiry form and one of our friendly debt advisers at Debt Rescue Now will give you a call to discuss your requirements.

Secured Loan Now, Business Loan Now, Bridging Loan Now, Debt Rescue Now and Choose Loans are all trading names of M60 Mortgages Ltd and specialise in arranging secured loans, personal unsecured loans, homeowner loans, home improvement loans, car finance loans, debt consolidation loans, residential and commercial bridging loans, commercial mortgages and business finance, and buy to let mortgages and overseas mortgages using whole of market high street banks and specialist finance lenders.

Posted 26/12/2009 12:51:21

The emergence of rogue practices by some debt management firms has prompted Promise Debt Solutions to issue a warning about some of the firms operating in the sector.

Promise Debt Solutions says it is vital for brokers to research the debt management companies they are referring their clients to, in order to avoid problems such as overcharging or lack of service.

Steve Walker, group managing director at Promise Debt Solutions, says that there are several points brokers need to be aware of when choosing a referral partner for debt management cases.

He says that while it is normal to charge one to two months of the client’s disposable income as an initial fee, there are some firms which are charging fees of between three and six months disposable income.

He has also heard of cases where the client’s disposable income has been miscalculated and overstated by as much as double the actual amount.

Walker calculates that some clients could be paying as much as £3,000 over the odds for debt management services.

He says: “We are hearing from consumers, where no negotiation is taking place with their creditors and they are effectively left on their own, deeper in debt, having paid large initial fees.”

Walker says not all companies behave in this way, but adds that brokers should be wary of some new entrants to the sector offering attractive trail commissions but not delivering the service promised.

He adds: “Brokers should be mindful that setting up a flashy website and offering great commissions is easy.

“Delivering on the promises is another matter.”

If you are facing financial difficulties, struggling to repay your debts or your finances are getting out of control and you require some free debt advice regarding consolidating your debts with a debt consolidation loan, or finding another financial solution to manage your finances such as a debt management plan or IVA (individual voluntary arrangement), please give us a call at Debt Rescue Now on 08450 580 999 or click Apply Now and complete our simple 30 second enquiry form and one of our friendly debt advisers at Debt Rescue Now will give you a call to discuss your requirements.

Secured Loan Now, Business Loan Now, Bridging Loan Now, Debt Rescue Now and Choose Loans are all trading names of M60 Mortgages Ltd and specialise in arranging secured loans, personal unsecured loans, homeowner loans, home improvement loans, car finance loans, debt consolidation loans, residential and commercial bridging loans, commercial mortgages and business finance, and buy to let mortgages and overseas mortgages using whole of market high street banks and specialist finance lenders.

Posted 30/11/2009 15:31:41

The Bank of England's Monetary Policy Committee has decided to keep rates on hold at 0.5% and to continue with its £175bn quantitative easing programme.

The MPC say it expects the announced programme to take another month to complete and that the scale of the programme will be kept under review.

As at October 1 the Bank has spent over £158bn on its asset purchase programme.

Yesterday Roger Bootle, the managing director of Capital Economics, predicted that interest rates would stay at their current level for the next five years.

Ben Thompson, director of mortgages, at Legal & General says: "There's been a notable shift in popularity towards tracker rates as expectations of a long period of low interest rates become entrenched amongst borrowers."

Figures from L&G Mortgage Club show that almost one in five mortgages applied for through the club were tracker rates, up from 12% in the previous quarter.

Thompson says he expects this figure to have risen by the end of the year.

He adds: "We expect the MPC to hold interest rates steady for some time but rises are inevitable, so borrowers must be prepared."

Ray Boulger, senior technical manager at John Charcol, says: "“Today’s no change decision may be a bit of a non-event but there is at last some action back in the mortgage market.

"September saw the usual seasonal upturn and over the last few days we have at last started to see some real competition from lenders, albeit primarily for lower LTV business.

"Although the cost of fixed rate mortgages has fallen a little over the last month most still look expensive in relation to tracker/discount rates, some of which have also fallen during the month.

"Thus variable rates continue to look more attractive for those borrowers who don’t need or want the security of a fixed rate."

Posted 08/10/2009 13:19:34

Debt resolution firm ClearDebt’s user data puts a human perspective on the quarterly insolvency figures issued by the Insolvency Service today.

Comparing the first six months of 2009 to the same period (January to June) 2008, ClearDebt’s analysis of 11,853 indebted individuals in England and Wales showed a massive rise in debt enquiries, particularly the self-employed.

The average unsecured debt has risen by just 4% to £27,072 but lower incomes have meant that the ratio of annual take-home pay to total unsecured debt has risen by 8% - to 172%.

Self employed people with debt problems are in crisis, according to ClearDebt. They have seen their average income decline from £36,000 in 2008 to £32,000 in 2009 and they now have average unsecured debts of £40,078 (£12,851 more than employed people). ClearDebt’s self-employed sample has seen their debt-income ratio rocket by 25% in a year, now owing 219% of their annual take-home income.

Britain’s most prudent debtors are those with children. They have reduced their unsecured debt by 1% between the period’s surveyed: Debtors without children have increased their debt by 7%.
Worryingly, Britain’s youngest debtors (18-24) now represent 17% of people seeking ClearDebt’s help. But, older people (55-64) are the biggest debtors – owing £40,798 and with a debt/income ratio of 250% - 29% higher than 2008.

Commenting on the figures ClearDebt Marketing Director, Andrew Smith, said: “The government should be particularly concerned by our self-employed debt figures. This may show that banks are unwilling to make business loans to these people – who will play a major role in economic recovery. Instead, small entrepreneurs may be keeping their businesses financed through expensive credit card borrowing and personal unsecured loans, whilst seeing their ability to repay plunge. This could be a major accident waiting to happen.”

Posted 29/08/2009 13:21:23

Specialising in short term finance, Sparkle Money operate a very private and discreet service that you can trust and rely on. We can arrange guaranteed short term finance from £500 upwards (no maximum) against valuables that you already own, for example watches, art, jewellery, antiques and luxury cars.

From initial enquiry you can have the money in your bank account within 48-72 hours.

Its quick, discreet and reliable.

If you are looking for short term finance then we have made it as easy as possible.

How it works

Step 1

Firstly you need to either contact us via telephone or, if you prefer, fill in our short and simple enquiry form.

Don’t worry – it is very secure and your details will NEVER be used by anyone other than Sparkle Money.

Step 2

We send you a pre paid Royal Mail Special delivery pack, all you then have to do is return the pack with your goods inside. These will be insured whilst in transit to our secure vault. Upon receipt, our specialist team values the item(s) and we confirm the available loan amount to you.

We offer transit cover up to £30,000 (highest amount available in the market) so that you know your goods are protected, giving you extra peace of mind.

Step 3

If you are happy with the loan amount and terms the funds are then transferred into your account the same day.

If you don’t want to go ahead we simply return the items to you.

Step 4

Your items will be put into our secure storage facility and Sparkle Money will look after them as if they were our own valuables.

Step 5

When you are ready to pay off the finance you can either give us a call or log on to your online area and follow the instructions.

Step 6

We'll return your valuables to you in the condition that they came to us.

The whole process is safe, secure and discreet.

That’s the Sparkle Money promise.

Sparkle Money FAQ’s

• What kind of valuables do you accept?

We accept most types of jewellery, including all pieces containing gold, platinum and diamonds.

We also lend on luxury and fashion brand watches, antiques including furniture and collectables, art and other luxury items, such as cars.

• How do I send the valuables to you?

We use Royal Mail Special Delivery Shipping Service and have the highest covering insurance policy in the market, of up to £30,000 in transit.

We will send you a free, fully-insured Special Delivery pack and ask you to drop it off, along with your item, at your nearest Post Office.

• Do I need to send any documents?

No documents need to be sent with the valuable.

Once we have received your item, we will contact your client for proof of identification.

• How fast is the process?

The process can take as little as 3 days from the point of contact. Once you have sent the item and we have received and valued it, identification checks are run and the money can be transferred immediately.

• Will my credit rating be affected?

Your credit rating will not be affected. As part of our legal compliance we are required to carry out identity checks, however these are not credit checks.

• Where will my goods be stored? Are they insured?

Your goods will be stored safely in the vaults at Sparkle Money’s prestigious Hatton Garden headquarters in central London. We have the highest covering insurance policy in the market, meaning that items can be insured for up to £30,000 in transit and for an unlimited amount in the vault.

• Who values the items?

We have highly qualified, specialist valuers based in Hatton Garden who are fully trained and hold qualifications from industry bodies, including the National Association of Goldsmiths.

• What’s the minimum/maximum amount you will lend?

The minimum amount we lend is £500, and there is no maximum.

• What interest rate will my client have to pay?

Our interest rates vary depending on the amount borrowed. For loans under £1,000 the interest rate is 5% a month. For all loans over £1,000 we charge a market leading rate of 4% a month.

• When does the loan have to be redeemed?

The standard duration of the loan is 6 months, however after this time period it is possible to extend the loan, subject to approval.

• What happens if I can’t repay the loan?

In the event that you can’t repay the loan, your item will be sold for the best price achieved to recover the amount borrowed, any outstanding interest and any costs incurred in selling the item.

Your credit rating will not be affected and any surplus is sent back to you.

Secure transit of your valuables:

• Sparkle Money promise to use only the best services to guarantee the safety of your valuables in transit.

• We use a Special Delivery Courier Service and provide the highest comprehensive insurance policy in the market - up to £30,000. This service ensures that your items arrive at our Hatton Garden premises within 24 hours.

• However, for valuables that are worth over £10,000 please contact us to discuss our premium courier options.

• For loans of more than £20,000 a home valuation from one of our experts at Sparkle Money can be arranged. Additionally, if you are unable to send your valuables to us we will be able to organise a meeting between yourself and our valuation experts at one of our appointment offices.

• Once we receive your items, they are stored in our one of our secure vaults at our Hatton Garden offices and fully insured. When your loan is redeemed we will return your valuables to you in the same condition in which they were received.

Call us now at Choose Loans on 0845 862 0524 to arrange finance today.

Or go to www.chooseloans.co.uk/contact.asp and complete our short Contact Us Enquiry Form and one of our advisers will call you back.

Posted 28/07/2009 15:58:18

June 2009

The Ministry of Justice/Insolvency Service recently held a presentation at a Stakeholder Event regarding their thinking on introducing Statutory Debt Management Scheme(s) under powers in the Tribunals Courts & Enforcement Act 2007. The present intention is to issue a consultation paper at the end of June, for which there is likely to be the minimum 12 weeks for responses before proceeding, should Ministers agree, to putting the Scheme(s) in place in April 2010.

Bev Budsworth, managing director of The Debt Advisor, commented: “I think the timetable is hugely optimistic but it would be fabulous to have a regulated debt management scheme by April 2010”.

It is so important that those involved in the debt industry do get involved in providing feedback for this consultation. Bev Budsworth is a stakeholder in her own right but will also be contributing to the consultation as part of the Board of the Debt Resolution Forum and also as a member of the Personal Insolvency Committee – a sub committee set up by The Insolvency Practitioners Association.

Bev adds “I hope we can see a statutory Debt Management Scheme approved which provides the following:-

• Protection from creditor action

• Industry wide acceptance of income and expenditure guidelines which are reasonable

• Protection for client funds

• Protection for clients in terms of excessive fees being charged

• Transparency on performance so clients can see how quickly their payments are sent to creditors and how much creditors receive

Posted 18/06/2009 12:17:36

Wednesday 10th June 2009

Analysis from EuroDebt reveals that more than 1 in 4 needed urgent help as a result of ‘loss of income’

Leading debt management provider, EuroDebt Financial Services, has published its report of the reasons for clients signing up to a Debt Management Plan (DMP) for the period December 2008 to May 2009. Based on a sample of more than 4,000, the analysis has revealed that ‘loss of income’ became the main reason for them asking for help. This is the first time this reason has taken the top spot in the EuroDebt table.

“For a number of years the main reason for people coming to us for help has been a spiraling of multiple debts, making it impossible for them to keep their head above water”, confirmed Kevin Still, Director, EuroDebt. “However, what we have seen for the first time in our latest analysis is ‘loss of income’ or redundancy being the primary reason for clients coming to us. This excludes those clients that are already unemployed, which is categorised separately.

“This coincides with more than half of all UK workers having experienced a cut in pay, a reduction in hours or a loss of benefits since the recession began, according to a survey of over 1,600 workers by the Keep Britain Working campaign issued earlier this month.

“It also, of course, reflects the huge level of uncertainty that exists about jobs at the moment. Many families and individuals have tried to manage a very fine balancing act paying off debts over the last few years. But the combination of the reduced access to credit, higher credit card interest rates and then a cut to overtime or second income or, worse still, job loss, has meant that the level of debt becomes too much to cope with.

“We have found a large number of new clients with reduced disposable income who are now unable to meet all their contractual commitments even at minimum payment levels. We have seen the average unsecured debt level rise to over £29,000 with over 8 creditors. With this level of debt self-management is virtually impossible and a structured debt solution is probably the best route to take.”

The EuroDebt analysis, when compared to the previous six months also shows a number of other changing trends in the reasons for families and individuals needing help with their finances.

EuroDebt aims to help consumers take a responsible position with their creditors, especially where they have multiple credit cards and loans, by notifying the unsecured lenders that they have entered a Debt Management Plan (DMP). Generally this means there’s no further borrowing and the majority of lenders agree to freeze interest & charges with the result that recovery activities stop. The debt balance will then begin to reduce at a rate based upon the negotiated reduced payments to creditors and the consumer can begin to take control of their finances again.

EuroDebt, unlike any other fee charging Debt Management Company, is the only debt management business that makes home visits a core component of its ‘fact find’ process, ensuring a complete picture of each individual’s situation is gained. “This is crucial” concludes Kevin Still. “At this visit, the debt advisor is able to assess not only priority expenditure, like mortgage or rent, council tax and utilities, but any arrears on these payments. Repayment arrangements to clear arrears are a priority to protect a client’s home and family.”

There are also instances where critical insurances have been dropped, like life insurance and home insurance, which may need to be re-prioritised. And to help support its clients even further, EuroDebt provides Energy Switching Services, enabling families and individuals to save money on their energy bills in order to accelerate the rate at which they become debt free.

A Debt Management Plan may be for a relatively short period ranging from 12 months to 3 years or a long-term plan that enables them to become debt free, potentially with some equity release for home owners in the future. The flexibility of a Debt Management Plan sometimes allows clients to resume contractual payments where creditors accept EuroDebt’s proposals of a reasonable offer for a transitional period until the client’s circumstances change. For example; find new employment, return to work from long-term illness or maternity leave. EuroDebt also offers Individual Voluntary Arrangements (IVAs) and a Bankruptcy Assistance service, where appropriate and based upon the client’s own preferences.

Previously in the top spot, ‘debt spiral’ is now the second reason at 21.9%, followed by ‘poor financial management’ – at over 13%. Interestingly, the percentage of clients who have come to EuroDebt for help as a result of ‘Divorce or Separation’ has dropped slightly in the last six months compared to the previous period – from 12.2% to 11.1%. However, worryingly, a reason where there has been quite a marked increase is ‘Illness’. For the period June to November 2008 this accounted for just 2.4% of clients coming to EuroDebt, but for December 2008 to May 2009 this has increased to 7.3%.

“It could well be the pressures of the economic downturn and worries about existing finances put some people under too much stress, causing a deterioration in their health which, in turns, exacerbates their financial situation”, continued Kevin Still.

“The fact that ‘debt spiral’ is still in the top three of reasons also, I believe, demonstrates the impact of enormously restricted lending practices over the last year or so. Revolving credit was certainly the fallback for many families and individuals over the last few years. But with so many lenders pulling back on new credit applications this hasn’t been an option more recently.”

Posted 11/06/2009 08:29:06

Wednesday 3rd June 2009

Several recent reports appear to suggest that families and individuals facing severe financial difficulties are finding it difficult to get the best advice or assistance.

Kevin Still, director at debt management company EuroDebt believes this demonstrates a lack of awareness amongst financial advisors of the options available to struggling clients, including debt management, which does not put the family home at risk.

“Last week, the Local Government Network released a study showing that 35,000 people could get involved with loan sharks - who usually charge very high rates of interest on their loans - due to the current financial downturn. Not surprisingly the Money Advice Trust raised concerns about this trend,” explained Mr Still.

“There is also concern about the level of debt being incurred on storecards and other ‘buy now, pay later’ credit, as the Finance & Leasing Association reports a 24% increase in these types of agreements in March this year compared to the same month in 2008. New financial figures from Albemarle & Bond, which runs over 100 pawn shops across Britain, also show a 35% rise in profits, which suggests that more and more people are pawning their valuables.

“All of these reports seem to reflect a mixture of financial desperation and the lack of legal lending alternatives. However, non-borrowing debt solutions, including debt management plans, can provide an immensely practical solution for many families. It just seems that brokers and intermediaries are still not accessing this facility to help clients who come to them.” Mr Still concluded.

If you are facing financial difficulties, struggling to repay your debts or your finances are getting out of control and you require some free debt advice regarding consolidating your debts with a debt consolidation loan, or finding another financial solution to manage your finances such as a debt management plan or IVA (individual voluntary arrangement), please give us a call at Debt Rescue Now on 08450 580 999 or click Apply Now and complete our simple 30 second enquiry form and one of our friendly debt advisers at Debt Rescue Now will give you a call to discuss your requirements.

As well as arranging debt consolidation loans, debt management plans and IVAs (individual voluntary arrangements), Debt Rescue Now also specialise in contesting unenforceable loan and credit card agreements (taken out before 4th April, 2007), reclaiming unfair bank charges, mis-sold payment protection loan insurance (PPI), unfair credit card penalties and unfair mortgage exit fees, all on a No Win No Fee basis with no upfront broker fees unlike most other financial claims management companies.

Secured Loan Now, Business Loan Now, Bridging Loan Now, Debt Rescue Now and Choose Loans are all trading names of M60 Mortgages Ltd and specialise in arranging secured loans, personal unsecured loans, homeowner loans, home improvement loans, car finance loans, debt consolidation loans, residential and commercial bridging loans, commercial mortgages and business finance, and buy to let mortgages and overseas mortgages using whole of market high street banks and specialist finance lenders.

Posted 03/06/2009 14:38:09