What Causes Us To Get Into Debt? The Possible Solutions?

What causes us to get into Debt? The Possible Solutions?

The British people’s personal debt exceeds 1.1 trillion pounds.  They have surpassed the United States in personal debt. Mortgage payments are the cause for 82% of this debt. The uncontrolled house price inflation is the main cause for this.  Next an unusually high tax rate and over the top University fees are the main culprits. Some other sources of debt could be divorce, medical expenses, not planning well enough or being put on the dole from your job.  One good thing to help the British people is new consumer protection laws capping credit card fees at twelve pounds down from thirty-eight pounds. A solution for the Scottish people is what is known as a Scottish Trust Deed. This is an alternative to filing for bankruptcy.  This is an agreement between you and your creditors for three years.  At the end of the time period any remaining balance is written off. This trust deed is legally binding on all of your creditors. The terms of the deed are tailored to fit your situation.

Another solution for the removal of debt is to consult a debt management agency. There are many offices out there who can give advice tailored for your situation. They can be found online or locally. One solution they can give the British people is like the Scottish Deed. It is called an Individual Voluntary Arrangement. This is a formal agreement between you and your creditors for over sixty months. In that time, you pay them what you can afford. After that period is over, the remaining debt is written off. These arrangements can help reduce your debt by seventy percent. Creditors cannot call you once this arrangement has been put in place. Another solution they can offer is Debt Management. This is like consolidation in the United States. This involves making one payment to the agency and they take care of the bills. In some cases, you can also freeze interest rates.  You will not have any more contact with the creditors as the agency will do that for you. The last solution they can offer you is a loan or to remortgage your home.   

The last resort to debt elimination is filing for bankruptcy. There are two types: voluntary and involuntary.  You go to court yourself to file and the district judge decides whether to grant it or not. It  costs four hundred  and eighty five pounds to do this. The fee may be waived if you are poor or unemployed.  Involuntary is when a creditor petitions the court for your bankruptcy if you owe more than seven hundred and fifty pounds. The advantages are: you are protected from creditors, your stress levels go down; after a year, the debt left over is written off and you’ll be able to make a fresh start. The disadvantages are: your assets will be sold to pay the debts. This can include your home. The bankruptcy is put in the local paper for everyone to see. This will affect your credit rating for six years and it will prevent you from working  in certain areas of employment. The best advice any debt manager will give you is try to keep your debt at or below twenty percent of your income level.

There is another NEW  solution. If you have credit agreements taken out before April 2007 there is a new unenforceable credit agreement claim which is becoming more and more known about here in the UK.  It is possible to have your credit finance agreements -agreements such as credit cards, store cards, secured and unsecured loans, car finance agreements, and those with payment protection insurance ( PPI) ‘audited’. They may not comply with the terms of the 1974 Consumer Credit Act and if they do not they are unenforceable credit agreements. This means you can claim to have them written off.  That is the balance completely cleared. For a fee of £295 which is refunded if your credit agreement is found to be enforceable, a solicitor with handle your claim. This is on a no-win-no-fee basis so it is risk free. Many people like me, have found this to be the perfect solution to their debt problems. Visit www.creditcardswrittenoff.com for more information Learn more on Youtube  http://www.youtube.com/watch?v=8acEWwqDqDc

Source by Jo Townsend

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