• From IVANews:

    This makes for some sober reading, particularly if looking at the total number of individual  insolvencies- the figure is an astounding 134,142- an increase of 26% from last year. Representing:

    74,670 bankruptcies
    47,641 IVA’s
    11,831 DRO”s
    This is the highest total since official records began in 1960.

    Albeit that the economy is slowing recovering, people made unemployed or redundant last year are still feeling the effects, not helped by lenders and institutions taking a hard line with individuals.

    Creditors have also started to get tough, according to Louise Brittain of Deloitte. This was reflected in the jump in IVAs, when individuals come to an official deal with their creditors.
    “This is a result of increased creditor pressure which is unlikely to let up any time soon, and highlights the desperate financial difficulties facing individuals,” she said.
    She added that the rise at the end of 2009 was surprising given that many people tended to delay dealing…

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  • From IVANews:

    A Debt Relief Order (DRO) is a new individual insolvency procedure which came into force on 6 April 2009 and which provides an alternative route into personal insolvency for certain categories of over-indebted individuals, subject to some restrictions namely the individual must have liabilities of less than £15,000, assets of less than £300 and surplus monthly income of less than £50. The Insolvency Service (IS) published its figures on Friday 5th February and DRO’s represented 11, 831 of the total individual insolvency figures for 2009.
    Almost a year on and DRO’s are still only available to individuals who meet the criteria above, however, gaining access to services who provide DRO’s is proving to be the biggest obstacle as in the case of Fred Mc Carthy,(see extract from the The Times below), who found himself struggling with debt and but for advice given by a veteran group he would have found himself in a Debt Management Plan as opposed to a DRO which, given hi…

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  • From IVANews:

    clampdown on firms which promise to help struggling borrowers repay debts could lead to unscrupulous companies being banned.
    The Office of Fair Trading is launching a probe into debt management firms following fears that consumers who are already in distress are being left worse off. Misleading advertising and poor advice can result in borrowers signing up to costly and inappropriate plans.
    There are about 150 debt management companies which claim to put borrowers with several debts on to repayment plans. They negotiate with debt collectors and credit firms to get interest payments frozen and repayments lowered.
    However, some firms falsely claim to be charities or government-backed. Others have made unlawful, unsolicited calls and sent mailings about repayment plans to customers already laden with debt.
    The companies make their money from commission paid by credit firms. However, many also sell insurance alongside the debts.
    In particular, the OFT will probe online advertising.
    Source…

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  • From IVANews:

    People behind with payments on their homes will have a new way of finding the best solution to their arrears problems from this week, with the publication of information and advice by the Ministry of Justice.New animated videos, interview clips and articles, to be featured on the Directgov website go from the point where there may be a problem, to communicating with landlords or mortgage lenders, how to prepare for court and what happens during and after a court hearing.Justice Minister Bridget Prentice said:‘The government has taken considerable steps to ensure people struggling to pay their rent or mortgage get the help they need to stay in their homes.‘Mortgage repossession figures released earlier this month show that the number of people facing repossession has considerably reduced since this time last year, but we’re not complacent. The information being made available today is easy to understand and accessible via the Directgov website and aims to help people find a way ou…

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  • From IVANews:

      The UK’s largest survey of student finance, published this week by Push, the UK’s leading independent resource for prospective students, reveals that students who started at university last year are expected to owe nearly £21,200 by the time they leave with this Autumn’s new intake of students owing an additional £2,000 by the time they graduate. The annual survey of over 2,000 students at 137 university campuses has found that student debt has topped £5,000 for each year of study for the first time. The increase of 10.6% is thought to be in part be down to availability of part-time and temporary jobs during the recession. 80% of students were said to rely on part time or holiday jobs to supplement their income by an average of £2,00 a year, but as the recession continues to bite such jobs are becoming increasingly harder to find. 
    The different funding arrangements around the UK are also reflected in the data. In Scotland, which has the most generous funding system, de…

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  • From IVANews:

    Registered UK charity, the Debt Advice Foundation, which promotes research and education around debt issues, has launched a freephone hotline to help deal with the increasing demand for support from people struggling with debt and money worries. The telephone service, along with the new Debt Advice Foundation website launched on Monday 10 August 2009. It follows a 27.4% increase in the number of people turning to personal insolvency (IVA or bankruptcy) during April to June 2009 compared with the same period last year and reports that existing charities/agencies are struggling to cope with the increased demand for help.
    The Citizens Advice Bureau alone receive an average of 7,241 new debt cases every working day and its debt enquiries are up 21% this year compared with 2008.
    Chairman of the Debt Advice Foundation, Dennis Benson said: “As the recession bites, the number of people facing debt problems is rising, with personal insolvencies now at a record high. Traditional support servic…

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  • From IVANews:

    Statistics published this week by the Council of Mortgage Lenders (CML) show that the number of mortgage possessions fell in the second quarter of the year, while cases of arrears leveled off. 
    A combination of factors has helped keep mortgage arrears and possessions in check, despite the recession.  Low interest rates are helping ensure that arrears grow less quickly, giving borrowers a better chance of getting back on track and lenders more scope to extend forbearance and government schemes are providing some help for borrowers in difficulty by promoting early communication between borrowers, lenders and debt advisers.  The CML reported they were pleased to see that lenders are showing forbearance to borrowers when customers are trying to resolve their payment problems and have a realistic chance of doing so
    However, while the figures reflect the efforts being made to manage mortgage arrears and avoid possession if possible, the CML warned that there can be no complacency…

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  • From IVANews:

    The Treasury Committee released a report this week entitled, Mortgage arrears and access to mortgage finance, which focused on households affected by the recession, struggling with mortgage arrears and/or at risk of repossession.
    The Report reveals that both mortgage arrears and repossession levels are on an upward trend as a result of the recession, with both expected to continue rising over the next few years. The Committee acknowledges that many mainstream lenders are taking pro-active steps to support consumers in mortgage difficulties, but expressed concern at the lack of flexibility and forbearance shown by some lenders in the sub-prime, specialist and second charge sectors towards homeowners in arrears.
    John McFall, Chairman of the Committee said: “Losing the family home is one of the most distressing experiences a family can go through. We have heard harrowing tales of households struggling to keep their heads above water in an attempt to avoid repossession. The next few ye…

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  • From IVANews:

    Last week I bit the bullet and joined several thousand other homeowners in calling my mortgage lender and asking for a payment holiday. I am self-employed and a company sitting on a large invoice of mine had folded, so we thought a month’s breathing space would help us. It wasn’t a prospect I relished but I figured that, after all, they could only say no. And sure enough they did.
    It was the grounds of refusal that was the most galling part. We bought the house five years ago with a 5% deposit which, at the time, I didn’t consider a particularly risky strategy. But according to the bank our loan-to-value (the proportion of the house with a mortgage secured against it) has now risen to 103% and payment holidays will only be considered at 90%.
    Like many other homeowners, being in negative equity was not part of our plan this summer. But unlike many others, three years ago we entered into an individual voluntary arrangement (IVA) as a result of a failed business. This me…

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  • From IVANews:

    The number of people becoming insolvent will reach record levels when official figures are published next Friday. For the first time, the number of personal insolvencies will top 30,000 for a quarter. In fact, there have been 41,870 personal bankruptcies this year – which works out at one person every six minutes. 22,976 people have entered into an individual voluntary agreement (IVA) since the beginning of the year – that’s five people every hour.
    Insolvencies – made up of bankruptcies, IVAs and debt-relief orders – could top 125,000 for the year, according to insolvency experts Tenon Recovery, which is almost double what they stood at just four years ago. The number of people who saw their financial situation collapse in 2005 was 66,646. The figure had soared to 106,348 by last year and will leap again in 2009, says Carl Jackson, national head of Tenon Recovery.
    “The figures for the first quarter of 2009 showed record highs of personal insolvencies, and it is like…

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