From the MoneyStand inbox: Come clean about debt

  By cashmachine | October 12, 2009 - 11:32 pm | Debt Advice, Debt Management Leave a comment

It seems our post in July about Debt and relationships has sparked a few conversations! Here’s another guest post this week from someone who was inspired to write in after reading a post from another. If you want to write us a post and have your opinion on a debt topic heard, get in contact with MoneyStand.

I would never lie about anything to a partner, as I believe that a relationship should be based on honesty. Fortunately, I was brought up with the attitude that debt is something to be avoided. Sadly, with today’s attitude of instant gratification, debt threatens the relationships of many couples, especially if both partners are not jointly responsible for getting into the situation.

A former partner, however, did have a habit of spending in secret, as they knew that I would be upset to know they were wasting such large amounts when we could not afford it. Finding the credit card bills, and knowing that these had to be paid for, caused numerous arguments, as I was concerned that our budget could not cover this expenditure.

Concealing financial problems is understandable, but secrets have a way of emerging, and a partner may well be more upset if the facts are kept from them. Anyone in debt would be well advised to be honest about it; of course the initial response may be anger, but they may find that the partner is more understanding than they expected, and will work with them to find a solution to the problem.

Getting out of debt means talking about debt

  By cashmachine | October 6, 2009 - 11:51 am | Debt Advice, Debt Management 2 Comments

The first and most important step in getting out of debt is to admit that you have a problem, and to realise that it is really nothing to be ashamed of. There are thousands of others in the same boat, many of whom are too ashamed to admit to being in debt.

Talk about debt!

Websites like MoneySavingExpert.com can be invaluable in helping you to face the truth and start to take steps to turn your finances around, as well as having many members in the same position who can support and advise you on what to do next. The very first thing to do is to draw up a statement of your assets, where you detail your income and every single expenditure each month – not just your mortgage and bills, but things like money you put aside to pay your TV licence, or for holidays and treats etc. Once you have a realistic statement you are in a better position to see where you can make savings and see what spare cash you have each month to put towards reducing your debts.

Speaking to advisors at the Citizens Advice Bureau can also be very useful, as is the Consumer Credit Counselling Service (cccs.co.uk), who can give the best advice on bankruptcy, IVAs (Individual Voluntary Arrangement) and Debt Management Plans and help you to contact your creditors to arrangement affordable payment plans if necessary.

It takes time, effort and a whole lot of commitment, but the hard work is well worth it when you can finally see the light at the end of your debt tunnel.

Remember to TALK about your debt!

Taking a Stand: Five must read posts of September

  By cashmachine | October 1, 2009 - 5:25 pm | Favourite Money Blogs 1 Comment

Each week I read a vast amount on blogs about debt, investing, saving money and there’s always a special few that are too good to be kept a secret. Now that October is upon us it’s time for me to check back on my personal finance bookmarks and choose a few to share with anyone stopping by at Money Stand. Here’s my favourite blog posts from around the net that were published in September:

1. Execellent Post at GenX Finance on saving money by doing your own home maintenance. This is great advice and a very comprehensive list.

2. Such a great idea which I will personally be taking on board is this post from Growing Money about getting money back from those who have borrowed from you. I’ve lent out more money than I care to remember and it’s so difficult to ask for it back.

3. I came across this post on Debt Kid yesterday which is really how to acheive debt free living in a nutshell. It covers the three main points I always talk about on MoneyStand and is really well written.

4. Over at Debt Management Tips they wrote an article at the start of the month about tackling student debt. If you’re a recent graduate like myself, it’s worth a good read.

5. If you’re considering buying your own home or trying to find out about mortgages, read this inciteful article about how to pay off a 30 year mortgage in 15 years at Consumerism Commentary.

If you missed these posts and any of them interest you, I thoroughly recommend you take the time to have a read!

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IVA v bankruptcy – the big fight!

  By cashmachine | September 30, 2009 - 9:11 am | Bankruptcy, IVA 2 Comments

What is an IVA? An IVA is an Individual Voluntary Arrangement which gives you the facility to set up a formal agreed payment plan with your creditors. In order to be eligible you must have debts of over £15000 that you cannot afford the repayments on.

What is Bankruptcy? Bankruptcy is an order from a court that means your finances are controlled by the Official Receiver and there are a series of things you cannot do when you have been made bankrupt. This also means your bank account will be frozen and you will likely lose your home (if you’re a home-owner)

What debt solution is better for you? That’s a tough call that only you can make with the help of some serious debt advice. Overall an IVA seems to offer you much more freedom in having some control over your assets, in my humble opinion (but I’m no financial advisor). When you are bankrupt you can be made to hand over everything that is not deemed essential to your living (eg work items or household items like clothes). With an IVA you can still operate your bank account and have your wages paid in as normal. You still have to provide detailed information on all your income and expenditure and then you will be told how much you have to repay to your creditors. If you do not keep up with this you could be subject to bankruptcy proceedings.

The time in which you will be paying the debt back does vary between these two. The IVA is usually over 5 years whereas the bankruptcy order means you will usually be paying the debt for 3 years (although the bankruptcy order may only last one year, the agreement to pay is 3 years). Although you will be paying for less time with the bankruptcy order, it does affect you for longer as you can not be company director, Managing Director, MP or Judge and you will have severe difficulty in obtaining a mortgage (especially after the sub prime credit crisis in America).

So overall, if you can have an IVA over a bankruptcy order then this would seem the better option for the majority of circumstances but this depends largely on your debt.

From the inbox: Should you get home loan?

  By cashmachine | September 23, 2009 - 2:07 pm | Homeowners Loan, Loans 5 Comments

Back in June I wrote an article on Money Stand about potential advantages and disadvantages of home improvement loans and received a guest post from one of our readers on their opinion as a follow up. Some great points here. Keep them coming guys!

Should you get a home loan?

If you have good equity in your property and would like or need a new kitchen, bathroom, etc… then a home improvement loan may be worthwhile, especially if you are planning to stay in your property for some time to come.

If however you are just improving your home because you think it will increase the property value, then you really must look at what you are improving, if it is structural work, such as a new roof, or building work then it maybe worthwhile and you may gain your money spent back by selling.

For a new bathroom or kitchen, unless your old one is desperately falling apart, you should hold off because everyone’s chose of style and design is different, you don’t want to spend thousands on internal features which may then be ripped out as soon as the new people move in; in this case keep your firmly in your pocket.

Three alternatives to Bankruptcy you should think about FIRST

  By moneybags | September 1, 2009 - 3:46 pm | Bankruptcy, Debt Advice, IVA Leave a comment
Bankruptcy in the UK

Bankruptcy in the UK

Bankruptcy is a very difficult decision, but there are a few alternatives to the procedure.

Firstly, an IVA (Individual Voluntary Arrangement) is an option. This is where you arrange an agreement with your creditor in which they decide to pay all or part of your owings. This is flexible according to the individuals own circumstances. The arranged fee is generally more than the creditors would receive if bankruptcy is filed by the person(s) in debt. Read this article on ‘What is IVA‘ if you’d like more information.

Secondly, an Administration Order can be installed in which a court will decide your payments scheme. The small print is that you must have a regular paying wage and debts that do not exceed 5,000 GBP to be eligible for an Administration Order.

Thirdly, a similar, yet more informal agreement can be attained which is an agreement between an individual and a creditor in which they both agree to a schedule of payment. This is referred to as a Family Arrangement. This however is not legally binding, and the creditor can decide that the arrangement will be scrapped and the full amount should be repaid.

If Bankruptcy is a real possibility for you and your family, it’s not something to go into before you’ve explored every other option first and considered what else is available. Before you go Bankrupt, understand all other debt solutions. Even if you do end up going bankrupt, it won’t be the end of the world. You can start again on a clean slate. THINK positive. CHANGE your spending habits. ASK for help.

Debt advice – 5 important steps

  By moneybags | August 3, 2009 - 10:51 am | Debt Advice 1 Comment

It’s time for some more debt tips! If you’re at the stage when you know you have to face up to your debt but still find the idea a bit daunting, here’s my FIVE most important Steps:

Step One:

There has to be a lightening strike when you are honest with yourself as to exactly how much trouble you are in. Sit down take a deep breath and open all the bills that are stashed away unopened because you have never dared. Write down a list and work out exactly what you owe and to whom. Read that list and cry, grieve, if you need to, and then decide that you are going to sort it.

Step Two:

Set two is tell you loved ones exactly what a mess you are in. They may be angry, shocked or disapointed to start but they will give you the emotional support you need. Once you’ve told your loved ones you will feel better – a problem shared is a problem halved as they say. Your freinds and family won’t just give you emotional support, they’ll also encorage you and help you in other ways – you just have to ask for their support.

Step Three:

Cut up the plastic and stop spending.  I don’t care how hard it is or how much you ‘need’ to buy something – this is about tough love here. No excuses. Start riding your bike to work, walk the kids to school, make lunch before you leave the house, use up your tinned food and freezer food that’s just lying around instead of getting more groceries, change your mobile phone plan, anything you haven’t used for a year – put it on ebay, cancel your gym membership and get fit the old fashioned way – there are no excuses here. You CAN stop spending and you CAN make changes right now to reduce your monthly, weekly and daily budget. It’s the only way things will get better, trust me.

Step Four:

Ring a not for debt advice charity, debt advice line, or debt agency – just make sure it’s free to call first. They will not take a fee but will help you go through the options of how to go forward they will contact your creditors and will help you with a budget suitable for you circumstances. Be cautious if they sound like they are trying to sell you a debt solution – make it clear you are calling for a free intial chat about your options and are calling multiple services to get the best advice and will have to discuss it with your family/partner/friends before you choose what road to go down. When you speak to them do not feel embarrassed – they speak to thousands of people around the UK who are having some money problems.

Step Five:

Remember you are not the only person in this situation. It’s nothing to be ashamed of and now you have taken the first steps your life will seem allot easier with a weight lifted from your shoulders. Take a moment to yourself to congratulate yourself that you’re on your way. Positivity and will power is key to changing your financial situation.

Debt = help needed

  By David | July 15, 2009 - 12:01 pm | Debt Advice, Financial Issues, IVA 4 Comments

This week we have a guest post by a reader who would like to remain anonymous. She contacted Money Stand to tell more people about her personal struggle with debt, which she hid from her partner. She hopes this story will encourage others in debt to face up to their money problems.

Before deciding to take control of our debts, they did worry me to the point that it was affecting my sleep patterns and I did suffer from a lot of stress. I did lie to my husband, mainly by not telling him how bad things were financially, and just letting him think that everything was under control and there were no problems whatsoever. Things really came to a head when I had to go into hospital and had to trust him to handle the finances for a week. There was no option then but to tell the truth and hope for the best.

It was the best thing I had done in ages! Yes he wasn’t pleased, yes he did have a good whinge. But at the end of it all, he was supportive and we have sat down since and worked out how we can afford everything we need and get some extra money together to save up to pay off the smaller debts. We only have 3 debts but they amount to £30,000 but we only have an annual wage of £27000 coming in, and we are a family of 5.

We sat down together and looked at money coming in and money going out. We have seen areas where we could cut back our spending, like on the little luxuries of brand names at the supermarkets. I now shop around instead of getting everything in the one shop. We have changed our suppliers for utility bills, we have letters in to reclaim charges, and I am now not afraid to complain to a company about anything I find unacceptable.

I have to say that the stress of keeping it all in has lifted and I feel so much better for being honest with my husband. We are now working as a team to try and clear our debts as quickly and painlessly as possible. They say that a trouble shared is a trouble halved, and it is true. I don’t have to bear the burden alone and I know there is someone there that I can talk to and be honest with, instead of plastering a false smile on my face every day and lying to everyone about things. I feel better now, and hope that by reading this someone else will have the courage to face their debts head on and will feel like I do now.

If you would like to write a guest post for Money Stand, please get in touch.

Viable Alternatives To Bankruptcy

  By cashmachine | July 7, 2009 - 2:08 pm | Bankruptcy, IVA Leave a comment

Before declaring yourself or business bankrupt it is worthwhile seeking debt counselling to make sure it is the right option.

Provided the directors of the company have and continue to act responsibly, voluntary liquidation may be an option for debts over £50,000. Although the company will cease to trade, the directors won’t be held financially culpable. If the company has no assets it will be necessary for money to be set aside to cover the practitioner fees.

If there only have a few creditors it may be possible to reach an ‘informal agreement’. It is similar to an IVA, but requires the agreement of all creditors. It is necessary that the company or individual has the spare money to offer creditors, but may result in a significantly reduced level of payment.

An IVA offers a less intrusive alternative to bankruptcy. You make a payment to creditors for a period of 60 months. It allows you to keep your home and maintain your professional status. Your insolvency isn’t printed in the local press.

Further Advice:
If you’d like to talk to someone about debt solutions and alternatives to bankruptcy, we’d recommend contacting an expert for free advice. Dropping into your local Citizens Advice Bureau or calling a company like Debt Free Direct is a good start. There’s also plenty of UK based forums where others going through IVA and bankruptcy talk about their experiences which could be a great place to get involved and ask some questions to people who are actually going through it before you make up your mind.

Taking a Stand: Five must read money posts

  By admin | July 2, 2009 - 1:50 pm | Favourite Money Blogs Leave a comment

Found some great posts around the blogosphere this week from some of my favourite blogs that talk about money, debt and frugality that I just had to share with you. The internet has become such a great forum for discussing money issues, and there is a wealth of support and information for anyone having financial difficulty now available. Here’s the top five articles I’ve read over the past week that made me a bit more frugal – and I hope they help you too!

1. My Struggle with Debt has come up with a great list of 5 tips for saving money during a recession

2. Money Saving Blog brings you a great Roundup of Frugal Living Philosophies

3. Find Financial Freedom has also complied some interesting Frugal Living Tips

4. Money Watch has got some good news for families watching their finances with Frugal Tips for Family Day Trips

5. Wallet Pop has made me feel a lot better about missing out on all Summer fun with Massive festival spend is madness

Hope you enjoy these posts as much as I have!