A Deed of Acknowledge is a particularly sinister form involved in home repossession that, if signed can leave you legally responsible for any shortfall after the sale. What's the best way around it? Don't sign it. Read case study .... Mark, a police officer, is about to have his home repossessed by his mortgage lender. Sold at auction, it is expected to fetch around £44,000 less than Mark's outstanding mortgage. Combined with his credit card and personal loan debts, which total around £46,000, this will take Mark's final debt to at least £90,000. As the debt is so high, in my opinion, there is only one solution – bankruptcy. Mark's marriage has also broken down and, due to the separate living costs, he has no spare money at all each month with which to repay his liabilities. Most people think that once they go bankrupt, that's it and all the debts – including the shortfall on the previously mortgaged home – get wiped clean. But do they? Continue reading

Taking the decision to deal with your debt is an important first step, but make sure you follow these tips to avoid any unnecessary hardship. If you’ve had enough of debts controlling your life and never having any money left a week after payday, then you might feel it’s time to sort your debt problems out. According to one consumer group around 1,000 people are seeking some form of formal debt rescheduling every working day. Some of these people wish to negotiate directly with the lenders themselves and bypass a debt management company, but dealing with lenders in this way can be a very stressful and emotional time. To help you through this I’ve put together some simple tips on what to do and what not to do. The first thing to do is to get a filing system going. If you have a few lenders then it is best to start with an index. You may think this is a bit over the top but trust me, to be able to easily find letters and figures will be a great advantage and reduce further stress in trying to locate lost papers with their telephone numbers and references. Continue reading

“Help, I can’t believe this is happening to me” gasped the man on the phone. “Surely they cannot do this to me, this house was repossessed some 10 years ago and now they are chasing me for the mortgage shortfall after they undersold it!” I get quite a few such calls from desperate people that have previously had their home repossessed and not heard anything for years but then, right out of the blue, a solicitor’s letter drops on the doormat claiming thousands- in this particular case £66,381. You can read more on 'why lenders claim so much', 'what can be done', 'time limits to recover mortgage shortfall debt' and 'the dangers of acknowledging the debt'....... Continue reading

As the number of consumer insolvencies continues to rise isn't it about time the public and the banks started supporting bankrupts instead of ostracising them. With the government announcing 34,743 individual insolvencies in England and Wales in the second quarter of 2010 - 5% up on the same time period last year - spare a thought for those individuals who have been battling unemployment and credit problems and who have now decided that insolvency is the only route left. Many people regard bankruptcy as an easy way out of paying debts. I simply can’t agree with this as I have often seen the pain and suffering of those going through the experience. Continue reading

A cab driver once told me that if he had a debt problem he wouldn’t know what to do to resolve it or even where to start, so I gave him a quick DIY guide to debt resolution from the back of his cab, and here it is! When you are trying to deal with debts it can be hard to know where to start. This means many people end up burying their head in the sand, which allows their problems to worsen. So, to help prevent your debts spiralling out of control I have put together a five-point plan. This is aimed at those who have low to moderate debt with numerous unsecured creditors. 1. Find out what you owe and to whom, take your credit cards, loans and bank overdrafts and make a separate list for each of the following: those in your name only those in your partner's name only (if applicable) those in joint names (if applicable) 2. Establish if the loans are secured, secured loans include mortgages, loans on a property and hire purchases such as those on a vehicle, these are priority debts. Also identify other priority creditors such as utilities and council tax. Continue reading

Is there anything you can do to stop a bank taking money out of one account to pay off debts in another account you hold with them? During the past week or so I received calls from two people, both of whom had money taken from their bank accounts by their banks to pay off their credit card debt. Both asked, “Can a bank do this, legally?” and I said, “The short answer is yes.” This practice is known in the trade as “setting-off” and while there are some restrictions it is perfectly legal. What exactly is setting-off? Setting off is when a bank uses the money held in one account to pay off a debt in another account held with the same bank. So for example, if you have an account you pay your utility bills from at the end of each month and your credit card bill, with the same bank, is due a week before, you bank could potentially take money out of this account to pay the bill if there are insufficient funds in your other account to pay for it. This would be unbeknown to you, as you will not receive notification from the bank in case you move the money away. So the bank takes money from the account to pay the credit card bill and it is no longer there to pay your utilities. Can I get my money back? Continue reading

While some people may think those who are bankrupt deserve to face harsh restrictions, I say banks are only making the problem worse by treating them like pariahs of society. Very few people run up debts with a view to going bankrupt. For the average consumer, it’s caused by an unexpected trigger, such as a relationship breakdown or job loss. Unless you’ve been through bankruptcy yourself you can only begin to imagine the stress, trauma and anguish these people go through. And to top it all off, they are then often denied even a basic bank account, which is demoralising, impractical and makes it extremely difficult for them to take control of their finances and make a fresh start..... It doesn’t wash with me that they cost money to run and are not cost effective. It works well for the Co-op and I am getting good reports about the sympathetic and supportive way they deal with bankrupt consumers. Continue reading