Personal Debt in 2014: So That’s Why Everyone’s Indebted!

Posted on March 27, 2015 in Smart Tips

At least 51% of adults in the United Kingdom have debt as part of their daily troubles and half of our population are struggling to make it past the 15-30 deadline.

Personal debt in 2014 is significantly affected by rising utility bills and daily need bills, mortgage repayments, rising transport costs and more.

It is true that a big problem is definitely due to the UK’s policy regarding taxes, which puts plenty of UK citizens under an austerity-like lifestyle.

Well, I guess it’s not just you and me who went through all that trouble of debt. I guess EVERYONE did.

Is It Financially Smart To Improve Your Home and Garden?

Posted on March 7, 2015 in Smart Tips

Who says you cannot improve your home and garden with a tight budget? Being able to improve your home and garden is a pleasurable feeling most people. Seeing the beauty that flourishes from the improvements made, is a joyful feeling that it would surely bring. Who would not want their homes and gardens to be improved? But yes, there is that budget issue. What if you are on a tight budget? What if you cannot afford the expenses for the improvements? Is it financially smart to improve your home and garden then? If only there are some ways that you could improve your home without having to spend a lot but alas! There is. There are actually many ways on how you are able to improve your home and garden just within your budget limit.

Here are some ways that you can do to improve your home and East London garden features even if you are on a tight budget.

For your Home:
1. Plan Before You Begin
Before you can actually gear up and start improving your home and garden, first you must plan. Consider the circumstance if you are able to meet your budget in improving your home and garden. Consider the materials that are ready available at home and that is needed. Calculate the expenses it would take for the improvements.
2. Look for Economical Materials
If you are on a tight budget, looking for low-priced materials is a sure goal. But you also have to make sure that even if the materials that you pick are inexpensive, it must be good enough in terms of its quality.
3. Try DIY
It is truly an achievement and a wonderful feeling in being able to improve your home and garden by engaging in the process and doing the work yourself. You can search for the materials in your home and for the unavailable materials, you can just buy them. By doing DIY, you have instantly saved up for the services fee you would have paid for the workers.
4. Molding
Moldings are actually a worthwhile investment and it will do well in improving your home look. Also, searching for an architectural salvage and construction demolition business might also be a good source for purchasing remodeling materials at much lower cost or you could just DIY the molding yourself.
5. Accessorize and Repurpose What You Have
Yes, there is no better solution in improving your home and garden than to accessorize. With anything that you can find in your home, accessories and stuffs, give your home the style and theme you want it to have.

For Your Garden:
1. Hire Landscaping Gardeners in Dalston
You can opt to hire professional landscape gardeners for reliability and quality services. It is an investment enough for a much more quality and long-term result assurance and of course, they are experts in the field of gardens. You can discuss your budget with them but still able to achieve the garden quality that you deserved.


7 Proven Ways to Finally Say “I am Debt Free!”

Posted on April 26, 2015 in Smart Tips

“I am debt free.” Is it really impossible for you to say it? But still, being on that situation is still as suffocating as it seems. That is the very reason why we always find some ways to look for different paths where we will be headed to financial freedom. However, if you will never try, nothing will ever happen. Debt will always be there and worse, your debt might grow even bigger.

Use these following strategies to avoid such tremendous situation:

1. Know how to budget

Living from pay check to pay check should be way long over when you were still working. But once you are already living with a partner or with a whole family, this seems not suitable anymore. Therefore, you must learn how to budget and use your money to your own family’s necessities. You can use any personal financial tools in the web or even you can create your own Excel spreadsheet to calculate all of your expenses monthly. This way, you will know where all of your hard work could possible pay off and of course, it is for the benefit of your whole family.

2. Learn to downgrade

Sit down in your living room and ask yourself the following:

“Do you really need the extra channels on your TV?” Some of us subscribe to extra channels even though we do not need or even watch them at all. You can list everything that you would like to delete and call your local TV operator to remove it.

“Is an AC a necessity?” If you are a type of a person who lives alone and spends more time at work than at home, having an AC can sometimes just be a fancy appliances for us. If the temperature is too high inside, you can open your windows or just simply use an electric fan. And if ever it is too cold, warm yourself up by setting up a fire place or if you don’t have a fire place, feel cosy on a thick blanket.

“Do I need a home phone?” Majority of the people nowadays are already connected to a cell services or have a cellular phone and it can be used anywhere you go even in your own home. Therefore, having a home phone can already be discarded.

3. Rank your debts

If you are in debt to more than one person or if your credit card has been used more than you have expected, it is best to list them all and sort it from the highest to lowest. Make sure to pay the highest amount first since it could play as the highest percentage of your whole debt.

4. Organise a garage sale

Do you have many things that you are not using anymore? Old clothes, toys, books, furniture and appliances that can still be used may help you increase your income. Just make sure that they can still be usable and wearable for you to be able to sell it without a doubt.

5. Put your credit card spending in a halt

Want to stop the increase of your debt? Then stop using those cards. Leave them at home and just put some extra cash on your wallet. Sometimes, if we know that we have enough amount money in our hands, we go out of control without knowing the possible outcome, and by using those credit cards would just continually increase the debts that we have.

6. Watch out for sales

Whoever you may ask, everyone loves department mall or grocery stores’ sales. It could allow us to buy more in our list since everything is charged lesser than we have expected. Some even have promos like just buying one and you will be having another one for free while some products like shampoos have a taped item which is also for free.

7. Change habits

Love online shopping? Can’t end a day without hauling at the mall? Do you really need to drop by on a coffee shop and order an Espresso before going to work? Want to get those fries every single day? Maybe it is time to make some changes. Those habits can actually be changed. If you can’t do it, you can first start by doing it every other day, then every other week until you have already come to adapt to the changes. You will later see how well it can change your lifestyle as well and avoid living from pay check to pay check.

What and How To Cut On Your Finances

Posted on March 27, 2015 in Smart Tips

One of the many elements that are largely part of one’s life would be money. Finances are always present, from daily necessities like food and shelter to personal wants such as shopping for clothes and shoes.

Then again, with such expenditure, sometimes the money you have might not be enough, especially if you have other family members to take care of. Total spending can be different if you are single and living alone compared to those with people and loved ones under their wing. And if you are part of the latter, then it becomes necessary to cut down on careless disbursal of money.

Some of you may not even have problems regarding income but for the “unfortunate” number who do have such concerns, well, it is really time to change your way. Common habits that this type of folks have include splurging on luxuries and wasting resources like electricity and water. This attitude is no doubt clearly showing how big bucks are being squandered. And what is more so of a let-down is that they do this even if their earnings evidently point out they could not afford to act as such.

Speaking of luxury though, everyone wants to experience that. But in the present times, at most, this equates to items that are indulges rather than necessities. Yes, maybe that is why it is termed to be “luxury”, but it stands that people tend to spend more on these than commodities that really matter in the long run.

These symptoms just indicate that you are wasting your finances. It may not seem important at the moment; perhaps you could not care less because you are enjoying your life and all that. Nevertheless, it is a reality that you must face. If not and you continue doing what you always do, that may lead you to debt. And trust us, debt is not a pretty experience.

Therefore, when it comes to bills, help yourself to these tips on what and how to cut on them (and fast):

1. Energy and Gas Costs
Electricity is no doubt a major essential in homes and structures. With lights, you can go and be efficient by switching to energy saving light bulbs. Lessen or reduce the usage of air conditioning units and heaters, unless the temperature becomes unbearable for you or any of your family members. Tweaks on windows and other openings can help as well. For the instance that it is cold, sealing them or installing treatments such as blinds can trap the heat inside, making the interiors warm. This then eliminates your need to plug in those artificial sources.

Supposing you have a car, take extra care with it by cleaning it and pumping its tires. Doing so can affect your fuel efficiency (in a good way, of course). When you drive, avoid speeding a lot since that will cost you your gas.

2. Food and Groceries
Again, food is a staple. Eating three times a day is typical and most would even add for a simple snack in the afternoon or during midnight. Anyways, the concern here is how you consume your money. For starters, it is best to set a budget for your grocery shopping episodes. Remember to calculate one that is within your means. Writing down a list of essentials must be done too. And you should stick by it. If you are strict with this, you will only be able to buy and pay for what you actually need. In addition, consider other brands of a product. The one you currently patronise may be pricey. Hence, look around for lower cost options to save on the bucks.

3. Banking Accounts
Most likely, banks and other credit companies hold your money for you. But with that, there is a long string of fees, interest and expenditure that gets charged to you. And so, this is a reminder (and maybe even a warning) to really involve yourself when applying for an account or two. Whether credit or debit, choose an institution that offers the most benefits. Doing a simple search online can help you compare bank offers.

In instances where you have to withdraw money from the ATM, plan to do this in one time. Especially if the ATM is not of your bank, a minimal fee is subtracted from your savings. This may seem small at first but if you repeatedly visit the ATM for withdrawal, then that can pile up to be cash you can actually save for your own.

Everything you need to know about Creditors

Posted on August 18, 2014 in Creditors

What are ‘Creditors’?

The term ‘creditor’ is used to describe anyone who has lent money to you, which you still need to pay back. In this context, creditors are likely to be any or all of the following examples:

  • Your bank – for overdrafts and/or personal loans which could be either secured or unsecured.
  • Credit card companies – for example Barclaycard, CitiCard etc
  • Store Cards – often issued by GE Finance but on behalf of many of the larger High Street stores such as Debenhams, New Look etc
  • Catalogues and Mail Order businesses – such as Littlewoods, ARGOS etc
  • Door step lenders – e.g. Provident Finance
  • Charge Cards – such as American Express
  • Pay Day lenders – Wonga etc, who lend money against repayment when you receive your wages.
  • ‘Secondary’ lenders – those lenders not commonly found on the High Street, and usually trade through the internet, granting personal loans at higher interest rates
  • Hire Purchase finance – such as Blackhorse Finance

These are just a small sample of the types of creditors we come across in our normal day to day activities, but generally cover most of the outstanding debts seen with our clients.

Self Employed People

However, with clients who are trades people and self employed, we can also add to this list, to include:

  • Trade creditors – people or businesses from which goods and services have been supplied on the understanding that payment for these goods/services is made at an agreed later date. Most businesses, particularly small businesses, rely upon such arrangements in order to support their ongoing trading as banks tend to adopt tighter lending policies for these businesses.
  • VAT – The HM Revenue & Customs (HMRC) generally allow businesses to pay their VAT liabilities on a 3 monthly basis which allows the business to use the collected cash during this period to support their trading. During this period, HMRC is a creditor of the business.
  • PAYE/National Insurance Contributions – the employer deducts from staff wages the amount they have to pay in income tax and NIC, which is sent to HMRC in the following month. During this period, HMRC is a creditor of the business.

Finally we also come to those arrangements as individuals or businesses which we make with anyone where it is agreed that payment can be made over a period of time instead of by a single payment ‘up front’. These would include items such as Council Tax or car/house insurance paid on a monthly basis – each of these liabilities covers usually a 12 month contractual period, though the council or insurer is happy to receive monthly payment as a way of easing the pain!

What can creditors do?

It is important to divide your debts into priority and non-priority debts. Why? – Because you need to understand which debts need to be paid first as a result of the potential consequences of not doing so. Many people get into difficulty because they pay the wrong creditors first.

Priority debts are debts that could result in your losing your home or an essential supply, if they are not paid

Below is a list of debts that are usually regarded as priority, and why they are a priority.

  • Rent or Mortgage and secured loans – Lender or landlord can repossess the home
  • Council Tax – Council have quite wide recovery options – they can use bailiffs, obtain payment from ‘attachment of earnings or benefits’ or, as an extreme, apply for your committal to prison
  • Electricity and Gas – The Supplier may obtain permission to disconnect supply
  • Magistrates’ Court Fines – Bailiffs can be sent to collect unpaid fines, refusal to pay can result in imprisonment. Re Maintenance arrears/CSA, Bailiffs can be instructed or there could be deduction from earnings, or committal to prison
  • HP/conditional sale, rented and hired goods – Goods may be repossessed
  • Business Rent – Repossession of premises
  • Business Rates – Bailiffs, committal to prison
  • Income Tax/VAT – Bailiffs, committal to prison (for evading payment)
  • TV Licence – Fine of up to £1000

Other items to consider

  • Water charges – Water companies may no longer disconnect supplies to enforce payment, but payment of water bills must still be regarded as an essential.
  • County court orders – If you have been ordered to pay a debt via a county court order. However courts will take into account someone’s ability to pay a debt. If you cannot afford to pay, see the section on county court judgments for how to deal with this.
  • Insurance (especially of your car and home) – Car insurance has to be paid by law, but insuring your home can be overlooked as an essential item; if you are uninsured however, you could lose everything through fire or theft.

Always remember to check if you have any insurance policies (payment protection policies) that will help you to pay your mortgage or other form of borrowing in the event of illness, disability, redundancy etc.

What is the difference between ‘secured’ and ‘unsecured’ creditors?

Secured creditors are those who have the benefit of a mortgage (typically over your house) or some form of right to hold or sell specified, separately identifiable assets, which they can rely upon to raise sufficient funds to clear your outstanding debt. This would occur in the event of you defaulting on your responsibilities to repay the debt, in accordance with the loan agreement.

An example of a secured creditor would be in respect of hire purchase – for example where you obtain a new car through a dealership – where the car is the security against the finance provided.

Similarly, secured loans are usually lent against a mortgage on your house, which could be sold by the lender under the mortgage document if you fail to repay the loan.

Bank overdrafts, credit cards, store cards and catalogues/mail order debts tend to be unsecured creditors, with no formal rights to sell your assets to clear the outstanding debt without first recourse to the courts. Typically you will find that interest charges on such debts will be higher because of the perceived greater risk to the lender of the debt not being repaid.

If I was in financial difficulties, should I pay some creditors before others?

Here’s the issue to consider that you need to ask yourself:

  • Am I at risk of losing my home or items I need to ensure I and my family can live ‘reasonably’?

The most important creditors must be those that are secured. Failure to repay them or at least to come to an agreed payment programme which keeps these creditors onside is likely to place your property secured to them at risk of being sold by them to clear the debt. You may recall the secured lender, whilst taking a mortgage over your house, stating “YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE”. This should not be taken lightly; we have had many clients coming to us after their house has been repossessed, often finding that they still owe some money after the property has been sold!

At the same time, it is important to maintain payments to ‘Priority Debts’ as there are potential risks involved in not doing so, ranging from repossession of property to fines and at the extreme, possible prison sentences. In any event, non payment of priority debts will have an impact upon life at home.

Of least impact upon keeping a roof over your head and food on the table are the ‘Non Priority’ debts. Such creditors do not have the luxury of holding any form of security for the debt, and therefore do not have as much leverage to ensure you comply with their terms. Of course you still have an obligation to pay back such debts, but you may find creditors more amenable to setting up arrangements so that you pay a smaller amount each month, over a longer period.

What happens if the debt is in more than one name?

It is not unusual for loans to be taken out in the joint names of husband and wife etc, particularly where the house is owned in the joint names, and certainly where lenders are looking for the security of the house, they will require all owners to be a party to the loan. Similarly many couple will take out unsecured loans together so that both of their incomes can be taken into account by the lender when calculating if repayment is viable.

In most cases, loans in joint names are on the basis that each borrower is ‘jointly and severally’ liable for the debt. This means that each individual takes full responsibility for the overall debt – not just their half. This means that if, for example, the couple split up and one did not make any further payments and could not be traced by the lender, the lender could call upon the other to clear the debt. That may sound unfair on the individual who is committed to do the right thing, but unfortunately that’s the way it is!

The Limitation Act 1980 – Know your rights

Filing for Bankruptcy, is it needed?

Posted on August 7, 2014 in Bankruptcy

Is bankruptcy right for you?

Bankruptcy may be one of a range of debt solutions available for you to clear all of your debt and become debt free. However, what’s right for you depends entirely on your individual circumstances and how you want to deal with your situation.

Advantages of bankruptcy

  • You keep your household goods, personal effects and tools of your trade (which could include your car) and a reasonable amount of income on which to live.
  • Bankruptcy usually lasts for one year after which you are released from your debts and you can make a fresh start.
  • Creditors cannot take further action against you, unless debts are secured on your home or other belongings.
  • Your home may not need to be sold if you are able to arrange the sale of your share of the property to a partner or relative.
  • You will no longer need to deal with your creditors which will ease the pressure.

Disadvantages of bankruptcy

  • You will have to pay fees of up to £600 if you apply to the Court yourself (sometimes more if you apply through a solicitor or licensed Insolvency Practitioner).
  • Your employment could be affected.
  • You cannot act as a company director.
  • Certain professionals are barred from practising if made bankrupt.
  • Some of your possessions could be sold and these could include your car or luxury items.
  • Some debts, such as court fines and student loans will not be written off.
  • You may have a bankruptcy restriction order made against you even after your discharge from bankruptcy if it is considered that you took out debts knowing that you did not intend to pay them back. This order can last for up to 15 years.
  • Your bankruptcy is published in your local newspaper and entered on a public register.

Bankruptcy Fees

When the debtor petitions for their own bankruptcy, they have to pay a court fee of £175, unless they are eligible for exemption or remission.

They would be exempt if they are in receipt of certain state benefits such as Income Support, Income based Jobseeker’s Allowance, State Pension Guarantee Credit, Working Tax Credit but not in receipt of Child Tax Credit or Income-related Employment and Support Allowance.

Where they are not exempt but paying the fee would cause financial hardship they can apply for the fee to be waived or reduced, which is called remission, they will need to complete Form EX160 to apply which should be completed after reading “completing form EX160″ Form EX160a.

For help on completing the EX160 you will need the EX160a Form

They must also pay a deposit of £525 with the petition for bankruptcywhich cannot be waived or reduced. Therefore the total cost for bankruptcy is £700