Demand for debt advice likely to increase

Anyone who has needed to see a debt advice professional over recent years will know how much more difficult this has become due to the soaring demand for these services from the many consumers who are struggling with their finances and finding it difficult to repay their debts. Many have had to wait for long periods of time in order to get an appointment with a debt counsellor to discuss debt problems and issues.

There are now fears that the situation could actually get worse with the demand for debt advice rising as a result of government cutbacks amongst other things. The austerity drive that was announced by the government last year and is due to be imposed over the course of this year and next year will have a profound impact on the finances of many people, such as those who see their benefits cut or those that will see their jobs go due to cutbacks in the public sector, which can then have a knock on effect in the private sector.

However, officials have said that it is not only the austerity drive in the UK that will drive people into worse financial situations but the similar situations that are going on around the world, which has a knock on effect on the UK. Some even think that the UK could be in line for another recession, which would bring dire news for businesses and consumers alike.

One official spoke about the cutbacks and economic situation in the UK and in other countries, stating: “At the moment it just seems to be a worldwide trend. I think the inevitable consequences of that is it is going to be a difficult period ahead, not just for the UK but for much of the world.”

Tags: Financial Services, knock on effect, debt advice, financial planning, economic situation, consumers, appointment, fears

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New OFT Debt Management Guidance Makes Cases Like DCM Apex Less Likely

Debt resolution company, ClearDebt, is pleased that the OFT’s new debt management guidance, published on Tuesday June 14th June is likely to outlaw “full and final settlement” schemes such as those run by companies like DCM Apex, whose clients ClearDebt has been working with since that company went into administration on 2 March 2011.

Commenting, ClearDebt CEO, David Mond, said:

The guidance makes completely clear that it is to apply to firms offering full and final settlements and also that only in exceptional circumstances will a firm be permitted to retain clients’ funds for more than five days. Further, the guidance stipulates that a company cannot hold on to monies that should be sent to creditors unless both debtors and creditors are made fully aware of the fact and it requires client monies to be protected if the company itself goes bust.

Had these arrangements been in place before, it’s likely that many clients of companies like DCM Apex would be much better off now than they are.

The OFT guidance imposes much more detailed requirements on debt solution companies than has been the case until now. ClearDebt believes that the guidelines may force many debt management companies to throw in the towel:

The cost of compliance – both in financial terms and in more onerous business processes – will go up sharply when these guidelines are enforced.

says ClearDebt director of marketing and external affairs, Andrew Smith:

Many of our competitors, especially those that rely on cold-called leads bought from third parties, will, we believe, find it difficult to sustain their business model under these new rules.

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People living alone more likely to need debt help?

Single people living alone are the most likely to overspend to pay for a comfortable lifestyle, which may lead them into debt problems.

That is according to research by Bright Grey, which found that 17 per cent of UK adults living alone overspend.

Many of these turn to credit to fund their lifestyles, meaning they could rack up credit card debt.

It was also revealed that one in six adults living alone feel they are not paid enough to fund their lifestyle.

Roger Edwards, proposition director at the firm, said: "There is a real concern that for many people, high mortgage and rental prices can mean that spending choices are limited.

"Yet more worryingly, it seems that the average salary is far too short for some, who just can't help but overspend in order to maintain their existing lifestyle or to make ends meet."

Those struggling to keep up loan or credit card repayments should seek debt advice as soon as possible to find a solution.

Ed Bowsher from lovemoney.co.uk recently suggested that consumers should budget to help them stretch their pay packets further.
Wed, 02 Mar 2011
Brits, including those currently seeking debt help, have been urged to budget to make their money stretch further... Tue, 01 Mar 2011
Brits currently seeking debt help could save around £300 a year by bundling their broadband, home phone and digital TV into one package, with one provider... Mon, 28 Feb 2011
Brits, including those seeking debt advice, may want to install a water meter in order to save money on their water bills... Fri, 25 Feb 2011
Parents seeking debt help should ask their children, who are earning a wage, to contribute towards their living costs...

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Women more likely to seek out help with debt than men

Wednesday 26th January 2011

Figures released by the Christians Against Poverty group and the Consumer Credit Counselling Service (CCCS) have revealed that women are more likely to seek help with spiralling debt problems than men.

63% of callers to the Christian’s Against Poverty group’s debt-counselling centres were women, despite the fact that men are more likely to become insolvent: the latest figures from the Insolvency Service show that in 2008, 37, 972 men went bankrupt compared with 23,173 women.The charity’s chief executive, Matt Barlow, said to the BBC: “We do not know whether women are more pragmatic, or that men have that determination to sort things out on their own. What is clear is that it is awful to live in debt, to be hounded by creditors and feel that life has spun out of control.”The publication of these figures coincides with the release of research by Halifax Savings showing that women are becoming more financially independent and also want to increase their influence on household financial decisions. 89 per cent of women consider it important to save money or to have their own savings, while 54 per cent want to take the lead on important financial decisions.Speaking to the Times, Flavia Palacios - head of Halifax Savings - said; "It is interesting to see how important it is for women to establish their own savings, maintain control over them and the ‘financial' purse strings in the household. Getting into the savings habit and maintaining control over your saving and spending habits is good advice for anyone, but has become increasingly so in the current economic climate."
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