How would a debt “breathing space” work?

There has been much talk in the media about how debt and repayments differ in the way that they are handled between Scotland and the rest of the United Kingdom. In Scotland, debtors are legally protected when they get into difficulty and enter into debt payment programmes. In these, a court assesses what a debtor can afford to repay over an agreed timescale and then freezes interest, penalties and other administration charges. There are also restrictions on the way that creditors can contact customers who are in this position. In England and Wales, however, there is nothing in law to stop a creditor from refusing to give a debtor breathing space, meaning that interest charges and penalties can continue to rack up, potentially putting the customer into very severe financial difficulties. The lack of rules over debt breathing spaces has led many people to claim that the situation harms both customers and financial organisations because it means that those who are in debt do not have any
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Free Debt Advice: Where to get it if you need it now

It’s easy to stick your head in the sand when you are struggling with debt but it is never a good idea. While you might like to think that not opening bills or responding to telephone calls will make your debts go away, your creditors will continue to pursue you for what you owe and will eventually take legal action to recover the debts. It is never a good idea to ignore debt. Fortunately, there are plenty of free debt advice services that you can turn to no matter where you are and no matter how large your debts. But what is the best service for your needs: The Money Advice Service This free online resource at http://www.moneyadviceservice.org.uk has a wealth of information about debt, handling your money and how to behave responsibly even when you are struggling with your finances. The service has online advisers who will be able to point you in the right direction or you can call them on 0800 138 7777 for free debt advice. It also has a section on how to deal with a debt adviser and ho
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Why are debt consolidation loans so popular?

We hear a lot about debt consolidation loans and why they might be a sensible way for a family with more than one debt to get their finances under control and reduce their monthly payments. But what are debt consolidation loans and do they really make sense for people who are concerned about the amount of interest they are paying on their unsecured debts? Debt consolidation loans explained Most families in the UK owe money on more than one card or on more than one unsecured loan. While it can make life difficult keeping track of all of these balances and repayments, it is possible, likely even, that you could be paying more in total interest charges than you have to. A debt consolidation loan is exactly what it says on the tin: you wrap all of your debts into one balance with one interest rate and once monthly repayment. While this can make household budgeting much simpler, it can also substantially reduce the amount of interest charges you are paying each month, although be careful
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How to pay off debt even when it seems overwhelming

It can be tempting to live in denial when it comes to debt. As long as you are making the minimum monthly repayments on your credit cards and sticking to the schedule on your loans, why worry about the total sum that you owe? But while the responsible management of debt is healthy, irresponsible behaviour can mean that debt can eventually overwhelm you and reduce the chances of financial security in later life. It is now common for Britons to owe more than £10,000 in unsecured borrowing which excludes mortgages and other loans secured on property. Having such a large amount of debt can often lead to exactly the kind of behaviour which will pile misery on top of misery: those in this situation often prefer to pretend it is not there and just carry on with reckless spending. But dealing with your debts – even when your income is low and the amount that you owe seems overwhelming – is perhaps more straightforward than you think. Here are some steps you can take to start to reduce th
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How to borrow money safely

Household debt is back at record levels as families use credit to finance home improvements, new car purchases, holidays and to consolidate other debts. While borrowing is, in itself, not a bad thing, the key to successful management of credit is to ensure that you behave with discipline and to use it safely. There are many ways to borrow money but choosing the right method for you will be a decision based upon the amount that you need, how quickly you will be able to pay it all back, how financially disciplined you are and whether you have a problem with a poor credit record. Make the right decision, and you will save yourself a lot in interest payments. Make the wrong one, and you could end up having difficulty repaying the loan or card every month and get into arrears and face a default or legal action. So it’s definitely worth taking the time to assess your options and being honest with yourself about your circumstances. Scenario 1: You have run out of money before payday If yo
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Can debt ever be a good thing?

By: Alex Hartley Nov 19, 2015 Can debt ever be a good thing? There is no doubt that debt that is badly managed can be problematic for everyone and it’s important to make sure that the level of debt that you have doesn’t overwhelm you. However, the purpose of debt is not to get individuals into a sticky spot but out of it. It should be about achieving your dreams earlier than you might otherwise be able to if you had to save up first. There are many different types of debt in modern society and most of it is designed to be constructive and to help you move your life on another step – if responsibly managed it can do just that. But what kinds of debt are there and how might these help? Mortgages The most common type of debt by far in the UK, a mortgage is essentially a long-term loan. At its simplest, a mortgage is supplied by a lender in order to enable the borrower to buy a property – without a mortgage most people wouldn’t be able to afford to get on the property ladder unl
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How to keep control of debt and make it work for you

By: Alex Hartley Nov 04, 2015 How to keep control of debt and make it work for you Debt is something that a large proportion of people in the UK live with. The Money Charity has predicted that by 2020 adults will each owe an average of £47,000 and with factors such as rising house prices pushing up the size of mortgages it’s unlikely that we will be a debt free nation any time soon. Debt is often viewed as a negative but if you have borrowed for a constructive reason then in that sense debt can be a stepping stone to better things. With that outcome in mind how should you manage your debt to make sure that it works for you? Keep track Knowledge is power and that’s particularly the case when it comes to what you owe. You need to keep a record of outstanding amounts, interest rates and payment dates so that you are not making decisions in the rest of your life based on a lack of information or on the wrong information. Create a spreadsheet, make notes or use an app – just be awar
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