Debt

At the end of last year we as a nation owed more than £1400 billion.

That averages out at an astounding £9,000 per household - not including the mortgage!

As new mortgage approvals hit the lowest levels since records began in 1990, we are now also seeing a further drop in the value of houses across the UK.

Halifax have reported figures are now down by 0.9% - however the average house price is still a  staggering £189,00.

In 2006 the Office of Fair Trading (OFT) decided to make sure all banks and building societies who issued credit cards had their default charges capped at £12 as opposed to the £25-£35 charges that many people experienced when going overdrawn or missing a repayment.

“the Financial Services Authority (FSA) have found that about 7 million people are unable to get money from usual mainstream resources”

Scary news, as the credit crunch starts to show its domino effect and hits the loans market.

More people are finding it harder to borrow money as lenders tighten up the strings on their purses.

The Citizens Advice Bureau have reported an increase in the number of people asking for advice. The single most common problem seems to be debt.

People are very worried about mortgages and mortgage arrears, along with general debt from an increase in household bills.

Just a couple of weeks ago, Egg, the bank which were taken over by Citibank last year, announced that they were cancelling a number of credit cards that belonged to existing customers, with no valid reason.

Of the 161,00 customers who were affected, many had a good record of repaying their bills each month whilst some others barely used their cards at all, and chose to keep them for the occasional emergency.

IVA’s were originally designed for small businesses who were in financial difficulty, as an alternative solution to filing for bankruptcy.

An IVA is an agreement between the debtor and his creditors (the companies money is owed to) and is a legally binding contract to repay a set amount of the money over a period of 5 years.

Read an interesting article this morning. A recent survey had shown that:

“on average we Brits owe on average £10,000 each in personal debt, which will only get paid off by the time we reach 50.”

It is a bit of a sobering thought to think that we will be in debt for most of our adult lives.

I read recently that

More than a fifth of the population keep their debts secret from their partners.

This revealing survey has shown just how bad the problem of debt management is. Not only are we a nation that gets into tremendous debt, but we then go out of our way to hide it from the people that could help us get out of it.