Debts Hit Middle Classes

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Debt Crisis Hits Middle Classes

Free debt solutions service, Payplan, has responded to this weekend’s national press coverage focusing on the increase in enquiries for debt advice from the middle classes.

Debt advisers at the service have been speaking to many families and individuals with high incomes, but whose debt has reached breaking point.

Debt Affordability Decreases

Payplan’s managing director, John Fairhurst, said:

“Our clients are really feeling the pain of the rising costs. Householders’ budgets are being squeezed as the cost of food, fuel and energy bills reaches ever higher levels. A direct result of this is that the affordability of their debt burden is at an all time low.”

Free Debt Advice

Call Payplan free on 0800 917 7823 six days a week to speak with an experienced debt adviser. Lines are open 8am to 9pm Monday to Friday and 9am to 3pm on Saturdays. Alternatively get debt advice online

Debt Figures Could Be Eye Of The Storm

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Insolvency Figures Mask True Extent Of Debt Struggle

Payplan, the free debt solutions service, has responded to today’s figures on the number of people that became insolvent during the first quarter of 2008 with advice for people in debt. The figures released by The Insolvency Service this morning, show that 15,651 people went bankrupt, with a further 9,614 taking out individual voluntary arrangements (IVAs) during the first three months of this year.

These figures are in line with ones reported for the previous quarter, but are considerably lower than for the same period of 2007, with IVA numbers dropping by around 22%.

John Fairhurst, Managing Director of Payplan, said:

“Although there has not been a big increase in the number of people going bankrupt, our clients are far worse off than they were this time last year.”

Debt advisers at the service have seen a significant change in the affordability of clients’ debt. Expenditure has increased faster than income resulting in an average drop of 14 per cent in the money available to service debts.

Mr Fairhurst went on:

“The latest figures show that people are managing to soldier on for a bit longer, but it seems that it will be only a matter of time before we see a big jump in these numbers. The rising costs of essentials such as; food, petrol, gas and electricity, is putting increasing pressure on those who were already struggling to make ends meet.”

Currently, only five per cent of the people who contact Payplan for help go down an insolvency route.
There are places where people can get free debt help and support – Citizens Advice Bureau and Payplan are both free services giving impartial advice and support to people in financial difficulty.

Mr Fairhurst added:

“To people struggling we would say – don’t continue to battle this alone, get the help and support you need.”

Information for Editors

Payplan provides free, ethical and immediate debt help to over 100,000 people every year, working closely with organisations in the field of money advice and consumer and employee welfare.

Press office contact - For more information please contact the Payplan press office on 01476 541980, 07812 736861, or email Jayne Newton.

Contact Payplan

Call Payplan free on 0800 917 7823 six days a week to speak with an experienced debt adviser. Lines are open 8am to 9pm Monday to Friday and 9am to 3pm on Saturdays. Or visit the Payplan website to submit your debt problem online.

‘IVA Council’ Continues To Contact People In IVAs

Filed Under  IVA News, Personal Finance, UK Debt News  |  4 Comments

The IVA Council (IVAC), who in October last year was forced to remove logos similar to the official Insolvency Service logos from its website, still appear to be actively sending letters to people in IVA arrangements, as recent comments on Payplan’s previous article ‘IVA Council’ makes false claims suggest.

Insolvency Service Statement

The Insolvency Service has recently stated the following on their website:

“The Insolvency Service would like to make it clear that we are in no way associated with an organisation called the IVA Council.

IVAs are a flexible and effective means of dealing with debt. For debtors they provide protection from creditors, debt forgiveness, flexibility in terms of what assets are included, and none of the restrictions, which apply in bankruptcy. For creditors they provide a better return than could be obtained in bankruptcy.

IVAs allow debtors to repay their creditors that which they can reasonably afford and resolve their financial problems, and are supervised by licensed and regulated insolvency professionals.
The principal statutory alternative to an IVA is bankruptcy. Bankruptcy should always be the last resort as the debtor will lose control of their assets and will be subject to bankruptcy restrictions, potentially up to 15 years.

Consequently The Insolvency Service does not condone any implication that people in IVAs should stop paying and enter bankruptcy. If you have had any communication from the IVA Council or other third parties suggesting that you stop making payments under your IVA you should discuss this with the supervisor of the IVA and seek advice from professional, qualified advisers before taking any action.”

As the Insolvency Service make clear, anybody who receives a letter from the IVA Council or for anybody who is struggling to meet their monthly payments in an IVA, they should seek immediate advice from their IVA Supervisor, who should be more than eager to assist.

IVA Council - Original Concerns

Below are some of the original concerns about the IVA Council:

There was NO ‘Consumer Credit Licence’ number evident. You need this to be able to give debt advice, according to the requirements set out by the Office of Fair Trading

There were NO ‘Limited Company’ (Ltd) details, registration number or company address which is a mandatory requirement on all emails and letters from any Ltd company

They used the logo of IP trade body R3 in the past, which it NEVER had permission to do.

They offered NO ‘Data Protection’ registration details which is necessary for a business that will be recording data.

Credit Today published that ‘numerous attempts’ to contact IVAC had been unsuccessful (25 October 2007). Jonathan Baker, The IVA Council’s (IVAC) auditor later told Credit Today that the IVAC had been foolish by advising recipients of their letter to stop making payments into their IVA arrangements.

How to Get Free Bankruptcy Advice

If you are in an IVA arrangement and are being encouraged to petition for bankruptcy from a third party, again, contact your IVA Supervisor immediately.

THERE IS ABSOLUTELY NO NEED TO PAY SOMEONE ELSE TO PETITION FOR YOUR BANKRUPTCY

Payplan believe that all people struggling with debt should have access to free debt advice and that they should be made aware of the best debt solutions available to them. That is why Payplan provide free debt management plans, IVAs with no up front fees, and free debt and bankruptcy advice.

Call Payplan on 0800 917 7823 or contact their advisers online for free and ethical debt advice within 24 hours.

IVA Advice Increases as Recession Fears Loom

Filed Under  IVA News, UK Debt News  |  Leave a Comment

IVAs and Levels of Bankruptcy to Rise

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Chris Tapp from Credit Action has raised concerns that there will be a rising demand from those struggling with mounting debt problems for free debt advice, IVA advice and bankruptcy advice in 2008.

Will House Prices Fall 5% in 2008?

According to Credit Action UK debt now stands at £1.4 billion, and with the average household owing nearly £9000 in unsecured debts such as credit cards and personal loans, the current economic gloom with predicted house-prices falling 5% across the UK and the credit crunch squeezing debtors’ options to re-finance it is imperative that debtors take free debt advice to review their options sooner rather than later.

Job Cuts Fear for Debtors

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An increase in IVA applications and personal insolvency such as bankruptcy is widely predicted as a result of the current economic climate. A recent Deloitte Economic Review has stated that employers may need to “wield the axe more sharply” to prepare for a possible recession within the next 2 years. For those already with poor credit and bad debts and who are unable to meet their commitments on credit cards and their mortgage payments, the loss of income from unemployment could be the final straw.

Get Free Debt Advice

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For those who are already struggling to pay their debt, be it credit cards, personal loans or their mortgages, it is important to take free debt advice as soon as possible. As well as giving experienced and professional free debt advice, Payplan offer free debt management plans (DMPs), and Individual Voluntary Arrangements (IVAs) advice and can help suggest ways to maximise your weekly or monthly budget.

Call Payplan free on 0800 917 7823 or for detailed free debt advice online, or to enquire about which free debt solution can benefit you (DMP, IVA or Mortgage Advice), submit your details through the quick and simple Debt Calculator

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