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

As families struggle to pay their bills and credit remains hard to come by, unlicensed lenders will try to take advantage but there are ways you can beat them at their own game. When my team and I talk to people to help them overcome their debt problems, part of the assessment is to identify all the lenders to whom they owe money, including family and friends. Nothing unusual here, you may think, but digging a little deeper reveals an alarming trend where often, through embarrassment, some individuals will say their debt is to a relative or friend when in reality, they owe money to a loan shark. According to a recent report, around 200,000 people in Britain are at risk from illegal loan sharks because they can’t access credit from traditional lenders. In addition, over 100,000 people from the UK's poorest families borrowed a total of £29 million from loan sharks to get through last Christmas, which meant they started 2010 already crippled by debt. Continue reading

Access to money, without undergoing a credit check and at short notice may sound attractive, but is it worth losing your car over? You're behind with your council tax or the washing machine has just packed in and you need cash fast. Where can you get money without being credit checked? You know you stand no chance with a high street bank, your credit card is maxed out and you are wary of payday loans and doorstep lenders. Suddenly, your vehicle, parked just outside in the street, grabs your attention. I wonder... hmmm. Yes you can, you can often raise cash against your vehicle. Every year thousands of vehicle owners turn to companies to raise finance against their car or motorbike in an arrangements commonly referred to as a log book loan. But are they any good? Continue reading

When I was serving in the Metropolitan Police I often quipped that no matter what happened to the UK economy, the government would always want police officers: our job was always safe. You can imagine how astounded I was when I heard thousands of police officer jobs are on the line as part of the recently announced Budget cutbacks. When this happens we know matters are bad. The Budget was certainly a tough one and only time will tell whether the measures announced are the right call. I don’t know enough about the economy to make an informed judgment but I do know a bit about consumers and their debts and I am worried. Continue reading

Now the Office of Fair Trading (OFT) has backed away from recommending price controls on expensive forms of short-term borrowing, I bet the sub-prime market can’t believe its luck. It means letting firms such as QuickQuid can continue to charge up to 2,278% interest on a payday loan. So why has the OFT allowed this market to continue to operate with such high interest rates and is it the right decision? Continue reading