Landlord Debt Advisory: Case Settlement Process

Following on from my previous post where I introduced CD Fairfield Capital as a company and our property debt resolutions brands, my next posts are case studies, real-life client situations we have dealt with and resolved.

Our Professional Landlord client approached us via our www.landlorddebtadvisory.com website for advice. For the sake of anonymity, we shall call him Bob. Bob had overextended his borrowing,  purchasing 35 properties since 2004, refinancing several times to raise deposit funds for further purchases and so on. The challenges he was facing were:

  • Interest rate rises (2x 0.25% Bank of England rate rises since we initially took instruction – all mortgages on variable rates
  • The financial impact of Section 24 taxation;
  • Bob’s age, 53 – all mortgages were interest-only with varying expiry dates (2019 – 2031); there were no repayment vehicles in place
  • Miscellaneous costs such as rental void periods, repairs and maintenance, management fees and charges

The Financials;

Portfolio Value:                                                                        £5.12m

Outstanding Debt:                                                                  £5.93m

Expected Shortfall/Negative Equity:                           £810,000

Total Debt Written Off:                                                        £696,000

Total Settlement:                                                                      £114,000

There was a combination of properties with equity and those in significant negative equity.

Bob told us the catalyst for contacting us was a combination of unplanned repair bills and the realisation that any further interest rate rises deemed the portfolio unprofitable as his cash-flow position was already precarious (up until that point it had always made a profit, albeit a rather modest one).

There was also a serious concern for the family home. This property is also mortgaged, owned jointly with Bob’s wife and has significant equity.

Once instructed, we completed a detailed review to include:

  • Recalling all lender documentation (15 lenders) to review security
  • Completing a detailed Statement of Affairs and reviewing all relevant client documentation
  • Portfolio Valuation – 35 individual reports

After concluding this work the following was clear:

  • As Bob had suspected the portfolio was untenable; despite there being some cash available, any combination of the challenges highlighted would quickly absorb this reserve.
  • Some lenders had the right to consolidate against the equity in other properties if sold.
  • This venture would become loss-making Q4 2018 or Q1 2019, and significantly so.

The recommendation was made that all properties were to be sold with the exception of the family home (this is not always the case). The Move With Us network was appointed to address the asset management element of the case (various agents and locations through England and Wales) to commence in line with each lender’s specification.

As the majority of the properties were tenanted, management contract extensions were agreed (where applicable) to ensure consistency with incoming rent, and the properties marketed.

While marketing was ongoing, we provided all lender representation for Bob. Further to this a bespoke shortfall settlement package was offered and accepted on a pari passu basis amongst the lenders (in this case an IVA); the highlights being:

  • Bob retained his family home; we negotiated new terms with his existing lender on a full repayment basis (had previously been interest-only)
  • Bob avoided bankruptcy
  • The equity from the properties sold above the loan value formed part of the settlement (£74,000)
  • Bob also added £40,000 – a combination of his own savings and gifted funds from family to this sum ie total settlement paid £114,000, total debt written off £696,000
  • Our total fee for this work was £37,500 (typical fee for addressing a single property and settlement is £4,000; average shortfall debt write-off is £70,000+)
  • The timeframe from instruction to conclusion circa 18 months

The above case type is common. We receive dozens of enquiries per week from Landlords with similar circumstances and varying portfolio sizes, geographical locations and levels of equity. It’s often the case that the Landlord has already spoken to the lender(s), the Accountant, a Financial Adviser, Solicitor and/or an Insolvency Practitioner unfamiliar with the intricacies of individual lender shortfall policy.

We are the ONLY company of our type in the UK with the expertise, regulation, lender relationships and track record to complete complex, multi-faceted cases of this type in a commercial and client-focused manner.

Are you in Negative Equity? We can help!

There is a considerable amount of misinformation surrounding property debt and negative equity. The aim of this and subsequent articles is to provide an overview of how we have been assisting homeowners and landlords with property debt issues since 2012.

CD Fairfield was formed by Philip Davison (MD), and myself as a reaction to the fallout from the unprecedented property crash in Northern Ireland in 2008. At the time it was estimated that approximately 60,000 properties had mortgages greater than their value. The Council of Mortgage Lenders estimated the negative equity total to be circa £2.5billion.

Of course, this isn’t an issue for everyone in negative equity, but for those who need to sell for financial reasons or otherwise, many found themselves in a “bad debt” situation for the first time in their lives, and through no fault of their own.

The “party line” from Lenders and Government Agencies was to speak to your lender. I can tell you from significant experience that in many cases that is the last thing a borrower should ever do!

It was clear that a bespoke mediation service was required to take borrowers by the hand to not only guide them through this minefield but provide full representation, an end-to-end solution.

As well an being authorised and regulated by the Financial Conduct Authority we have an in-house Insolvency Practitioner, Edward Walsh, a member of the Chartered Accountants of Ireland and R3 (The Association of Business Recovery Professionals). We also have Senior Management who holds membership of the Insolvency Practitioners’ Association.

With these associations and levels of regulation, we have the full suite of debt solutions under one roof which includes:

  • Mortgage re-negotiations (with the existing lender)
  • Mortgage Mis-selling Claims
  • Informal/Negotiated Settlements
  • IVA (Individual Voluntary Arrangement)
  • Bankruptcy

We also recognised that there were a number of distinct differences based on whether we were helping homeowners or Landlords in Northern Ireland or in mainland UK. This being the case variations in brand were created as follows:

Negative Equity UK

Negative Equity NI

Landlord Debt Advisory

Get Help With Debt

What sort of results does Negative Equity UK achieve? This is a snapshot of some settled cases: Settled Cases

Our independent Client Review show an approval rating of 4.89/5.00

Securing successful outcomes for clients is front and centre in all that we do. How do we do this?

  • Developing and maintaining excellent working relationships with lenders
  • Recruiting highly competent staff from the legal, accountancy, insolvency, banking and financial services sectors
  • Continual investment in systems and people
  • We listen to our clients and implement constant improvement based on feedback

 

(up to April 2018)

In my next articles I’ll provide specifics; the mechanics of a case, the process that followed and the outcome for the clients.

 

CD Fairfield Secures Major £2M Partnership with Move With Us

CD Fairfield Capital, one of the UK’s leading Non-Statutory and Statutory property debt specialists, has secured an exclusive two year rolling contract with Move With Us to be the sole approved provider of debt services to its group. Move With Us is the UK’s largest network of independent estate agents (with over 1200 high street locations) and is owned by London private equity investors Palamon Capital Partners. This new relationship will see CD Fairfield Capital create 25 new jobs over the next 18 months, 21 in Belfast and 4 in Cambridge.

Speaking on the announcement, Phil Davison, Managing Director at CD Fairfield Capital said: “This is a great result for all involved in CD Fairfield. It has taken over a year to deliver what is a hugely exciting development for the company. This allows us to bring our expertise to the widest possible UK market; becoming a partner with a company of Move With Us’s size and scope can only be a validation of five years of hard work.

“The property market in mainland GB is experiencing a downturn with property still 20% below peak 2008 price levels in parts of the North of England and Wales and prices falling in London and the South. With interest rates expected to rise and the Bank of England warnings around house prices in the last week; we are posed to bring our specialist expertise to beleaguered buy-to-let landlords and those requiring property debt advice.

“With our experience and growth in this specialist area of debt management, coupled with the economic and fiscal outlook over the coming years looking less favourable for landlords in particular, we expect to see the number of Clients CD Fairfield are helping grow exponentially, thanks to this exclusive partnership with Move With Us.”

Speaking on the decision to partner with CD Fairfield Capital, Ben Greco, Managing Director at Move With Us says: “Move With Us started working with CD Fairfield last year when some of its NI property-debt cases required properties to be managed and sold in England and Wales. Being a leading residential asset manager, Move With Us were a good fit.

“CD Fairfield brings bespoke help to a range of property-linked debt problems for investors, accidental landlords or actual homeowners. Its case studies really are testament to the help it gives and what can be achieved to mutually benefit all parties involved in those issues. With interest rates likely to rise further, property prices flat at best, landlord tax breaks being squeezed, and the wider market suffering from Brexit-based uncertainty, I think the number of property owners that may need this sort of individually tailored help with their debt and property situation will rise steadily in coming months.

Ben continues: “Our job is to bring the best processes and agent partners to the table to achieve the optimum sale results for all involved. All in all, I expect our relationship with CD Fairfield to grow closer and stronger as case numbers rise steadily and consistently. I am looking forward to developing this new partnership over the months to come.”

Founded in 2013 by Directors Philip Davison and Tom Cardwell, this is a significant development for the business, that currently has over 650 retained clients and is regarded as the best specialist property debt company in the UK. Settling over 500 cases with an average debt write down of £57,000 for buy to let landlords and homeowners.

CD Fairfield, Director, Tom Cardwell adds: “This collaboration marks an exciting time for CD Fairfield and sees significant financial development in our NI base. It will see the expansion of our team and the investment in new offices to house the increased capacity required.

“At CD Fairfield we have a unique service and the only company of our type to currently offer clients the full suite of potential property debt resolutions under one roof. By partnering exclusively with MWU and extending our reach as a company, this can only be good for the UK consumers.

“From day one our focus has been on our clients and as we continue to grow that will remain the cornerstone of our company philosophy.”

CD Fairfield Capital operate in the UK under the trading styles Landlord Debt Advisory and Negative Equity UK, In NI under the trading styles Negative Equity NI and Get Help With Debt.

What is Negative Equity and why is it a problem?

Around the UK, many homeowners have found themselves trapped in negative equity since the property crash and recession ten years ago, but many people don’t know what negative equity is or how it can affect them and their finances.

Put very simply, ‘negative equity’ means that the value of something against which a loan was secured is now less than the outstanding balance. In the United Kingdom and Ireland, it is a term applied almost exclusively to property debt.

In the past, bricks and mortar were popularly seen as a safe investment, guaranteed to gain in value.Similarly, it was accepted that other things depreciated in value, often quite significantly. The market value of a car might drop by 20-30% as soon as it is driven out of the showroom. People understand this and factor this loss of value into their calculations whenever they decided to make an expensive purchase.

But property? That was different. Or, at least, so most people thought.

The recession which hit the UK in 2008 saw the value of many properties plummet. This left those who had taken out loans based on the pre-recession worth of their homes, with debts greater than the post-crash value of their property.

If, in 2006 to ‘07 when the British and Irish property booms were at their peaks, a buyer took a mortgage of £210,000 for a house, today valued at £140,000, they have a problem as selling their home will still leave them with a significant shortfall, which they will still have to pay back.

This is the main problem with negative equity, in addition to this significant loss, the amount raised from a sale at this stage would be insufficient to clear the outstanding debt to the bank of building society.

In the current climate those who have suffered are the borrowers who, in the days of ‘easy money’, took out loans of 90%-100% of the property’s value. From the outset, they were most at risk in the event of any fall in the value of property.

We can Help.

There are a number of possible solutions we can offer to resolve your property debt problems, depending on your circumstances, but for many of our clients a sale and settlement is the only solution to their problem.

We have successfully negotiated hundreds of cases every year where we have arranged the sale of our clients’ homes and reached an affordable debt settlement with the lender.

For other clients remortgaging might be their best option and, in some cases, we might pursue an individual voluntary arrangement, or IVA. This is a legal agreement between you and your lender and is suitable for people who have debts with multiple lenders.

Whatever your circumstances, the first step to dealing with your property debt is to contact Negative Equity UK for an initial free, no obligation consultation with one of our advisors.

Take a look at our reviews and call us on 0161 631 2727 or go to our website and arrange for us to call you at a time that suits you.

We offer solutions for unaffordable property debt.

At Negative Equity UK, when we meet our clients for the first time, they often tell us that they believe their situation is hopeless and they do not think there’s any way out of their debt situation. Many are worried that their debts will inevitable force them to go bankrupt.

There are, however, a range of solutions that can be pursued in order to deal with a property in negative equity. Once we have completed an initial consultation with our clients, we can begin to plan the best course of action for dealing with you problem debt.

Informal settlement.

For the majority of our clients, the best option available is usually a negotiated settlement with their lender. This involves the borrower selling the property and our team negotiating with the lender to write off as much of the shortfall from the sale as possible. This leaves our client with an agreed, affordable amount to repay either in instalments or as a single lump sum payment depending on what makes the most financial sense for them.

We often find that our clients are sceptical that a bank would agree to write down debt, but there are good reasons for them to do this. Repossessing a property and then paying someone to sell it for them is a long and expensive process for the bank and they rarely get the full market value for the house, so agreeing a settlement is often the best option for both parties.

An Individual Voluntary Arrangement.

An individual voluntary arrangement (IVA) is a legal agreement between you and your creditors. IVAs are a possible solution we would examine where a borrower owes money to multiple creditors.

Most types of debt can be included in an IVA, including mortgage debt, credit card debt, unpaid council tax or money owed to HMRC. An IVA might also be worth discussing if you own multiple properties with mortgages from different lenders, or you have unsecured debt from several creditors.

Once a settlement is agreed with your lenders it can be paid as a five year payment plan, known as a contribution IVA, or, if you can afford it, as a single lump sum.

Remortgage/restructure.

For most of our clients, it won’t be a good idea to try to resolve their debt problems by taking on more debt, in a few cases, however, it can be possible to deal with property debt by remortgaging.

While not suitable for everyone, restructuring your mortgage is an option that we might consider with clients who are struggling financially due to unexpected changes in their circumstances, such as a change in your work situation, if you have been made redundant, retired or had your hours reduced, or if your family is growing.We have successfully negotiated with many of our clients’ lenders to extend their mortgage term, allowing them to stay in the home they had worked so hard to secure.

What do our clients say?

One of our recent clients, Kerry, said this after we completed her case; “The service provided by Negative Equity was excellent. Despite all of my concerns and fears about the process they really went out of their way to provide excellent guidance and advice. They took their time explaining in detail the process, no question was left unanswered. My negative equity of £97,000 was reduced to £14,000 final payment. I can’t thank them enough.”

Contact Us Now.

We have successfully negotiated hundreds of cases every year where we have arranged the sale of our clients’ homes and reached an affordable debt settlement with the lender. Whatever the situation we will offer you a bespoke solution based on your own personal circumstances. The first step to dealing with your property debt is to contact Negative Equity UK for an initial free, no obligation consultation with one of our advisors.

Take a look at the rest of our reviews and call us on 0161 631 2727 or go to our website and arrange for us to call you at a time that suits you.

Universal Credit continuing to hit landlords’ finances.

The roll out of the government’s flagship benefit reform is causing financial difficulties for landlords as tenants receiving Universal Credit struggle to budget for rent and face delays in payments.

Universal Credit is intended to simplify the existing benefits system by consolidating a range of benefits, including housing benefit, into a single monthly payment. Previously housing benefit was paid directly to a renter’s landlord, but under the new system recipients are intended to be in control of their own money.

However, lengthy waiting times before an applicant can receive their first payment, administrative issues and problems budgeting for priority expenses, such as rent, has led to many people receiving Universal Credit falling into arrears.

According to the Residential Landlords Association, 38% of landlords with tenants receiving Universal Credit are owed rent, an increase of 10% on last year.

In an interview with the Guardian, one Croydon based landlord has revealed that she has been left with £9,500 in arrears after a tenant on Universal Credit was unable to keep up with their payments.

The landlord, who preferred not to be identified by her real name, said the council who arranged the tenancy had given her assurances that the rent would be covered by housing benefit. In January, however, the tenant was switched to Universal Credit and rent payments ceased.

Since then she has been unable to recover the arrears owed to her, leaving her £9,500 in debt.Richard Lambert, chief executive of the National Landlords Association, said; “Underlying all the problems with Universal Credit is the freeze on housing benefit rates, which means that the housing element of Universal Credit is simply insufficient for many tenants to be able to cover their rent.”

How can we help you?

At Landlord Debt Advisory, we offer bespoke solutions for landlords with problem debts. If you’re a landlord struggling with negative equity, under performing properties or the impact of recent tax changes such as Section 24, contact Landlord Debt Advisory for an initial free, no obligation consultation.

After we resolved his case, one of our recent clients said; “We contacted Landlord Debt Advisory as a buy to let property purchased in the housing boom left us with negative equity.“They dealt with our case very professionally and efficiently from start to finish. They had an in depth knowledge of what options were available to us and provided us with advice on the best option to take.

“They dealt directly with the lender and provided us with regular updates on the progress of the case. We got a great result in the end which has alleviated a lot of stress caused by being in negative equity.”

Check out our reviews and all us on 0161 222 4311, or go to our website and start the process of dealing with your debt.

Bank of England raises interest rates.

The Bank of England’s Monetary Policy Committee has voted to raise interest rates by 0.25% to 0.5%, the first time in ten years rates have gone up, in a move that could have a significant effect on borrowers.

The decision to raise interest rates will see the average homebuyer with the typical mortgage in Britain of £175,000 pay about £22 every month. The 500,000 borrowers on one of the most popular deals, Nationwide’s base mortgage rate tracker, will see their interest rise from 2.25% to 2.5%, taking the monthly bill from £763 to £785 on a £175,000 loan.

For many home owners, the rate rise won’t have a dramatic effect on the affordability of their mortgage, but for those borrowers who are already struggling to keep up with their repayments this increase could be enough to make their monthly repayments unaffordable.

At his press conference announcing the decision, Mark Carney, Governor of the Bank of England said that the Bank was aiming to continue slowly raising interest rates over the next several years, which could increase pressure on borrowers.

How will rate rises affect you?

For existing mortgage customers, a rise in interest rates will lead to higher monthly repayments. For the 57% of borrowers currently on fixed rate deals, the effect won’t be felt immediately, but depending on when their two or five year term finishes, these borrowers will eventually face higher repayments. Homeowners are being warned that they could be facing a ‘payment shock’ if they fail to remortgage and end up paying their lender’s standard variable rate. Borrowers with Santander, for example, could see their SVR go from 4.49% to 4.74%.

For borrowers with variable or tracker mortgages, or those with interest only loans, the effect will be felt more immediately. Lenders with the lowest standard variable rates, those below 5%, will probably be the first to increase their rates.

Meanwhile, homeowners with interest only mortgages will also see their monthly repayments increase, but these higher monthly repayments might, in some cases, reduce the amount of money they are able to put into a repayment vehicle to repay the principal loan when the interest only term ends.

Jeremy Leaf, former chairman of the Royal Institute of Chartered Surveyors, said; “Although the change is very small, it could have a disproportionate impact on many, especially first time buyers and sellers, who have told us they have high loan-to-value mortgages and/or other loans. The direction of travel for interest rates will have a bearing on future plans. Inflation rising faster than salaries is also adding to the pressure on household finances.

“It’s not the increase itself but the impact on buyer confidence and a property market already compromised by political and economic uncertainty, which is more relevant.”

`We can help.

At Negative Equity UK, we’re property debt specialists. If you are worried about the impact the rise in interest rates will have on your finances, take a look at our reviews and contact us on 0161 631 2727 or online at negativeequityuk.com to arrange an initial free, no obligation consultation.

 

Struggling With Unaffordable Debt?

Struggling With Unaffordable Debt?

Unsecured debt is a serious problem affecting many in the UK. Individuals, families and businesses alike are victims.

So what is unsecured debt? And, more importantly, what can be done to help those drowning beneath its waters?

An unsecured loan is one that has not been secured against an asset or is not covered by a guarantor.

Examples include credit card debt, utility bills and arrears on other types of loans or credit given to a borrower who was not required to provide collateral to offset the risk of non-payment.

This contrasts against a secured loan for the purchase of a house or a car, for example.

Those loans are secured against the asset, which can be taken from the borrower if he or she fails to maintain repayments in keeping with the terms and conditions of the agreement they signed with the lender when the loan was set up.

‘Repossession’ is the technical term in this instance.

But unsecured debt is different as there is no house or car to offset it.

Always an unsecured loan constitutes a sizeable element of risk for lender. Why? Because there is the possibility that the borrower will fail to make full repayment of the loan. And there is no house or car to compensate for this.

So what action can the lender take against the borrower in such a situation?

They can also report the borrower to a credit reporting agency, sell the debt to a collection agency or sue. If they file for a law suit, the court may force the borrower to use specific assets to repay the unsecured debt.

In view of the element of risk to the lender, unsecured loans carry a higher rate of interest. Obviously, then, this in turn translates as the borrower having to make bigger repayments.

But if that borrower then runs into problems as a result of sickness, unemployment, reduced working hours, the loss of a partner – either through bereavement or divorce – or for some other reason, the fact that those repayments are bigger simply adds to the problem.

The fact that you have visited this website and are reading this article suggests you may have recognised that you need to get help with resolving unsecured debt problems.

If so, you will be relieved to learn that such assistance is indeed available from reputable, knowledgeable advisors who excel in finding statutory and non-statutory solutions to debt.

The Get Help With Debt staff certainly fit the bill.

They are gifted individuals from a variety of backgrounds in banking, finance and the law relating to those areas. So if you need to get help with debt, be assured that they will find solutions which satisfy the law as well as meeting the requirements of your creditors.

Their statutory solutions are IVAs, bankruptcy – but only very occasionally – and debt relief orders. They are regulated by the Accountants’ Regulatory Board, thereby guaranteeing their clients the best possible advice in their particular situation.

Their non-statutory solutions are debt management plans and informal settlements. These, too, are regulated – in this case by the Financial Control Authority, the independent regulators of all reputable financial organisations in the UK.

A word of warning: never seek help or take advice from any individual or company not regulated by either of these two bodies. Big mistake.

Those who are in over their heads with unsecured debts almost certainly are highly stressed at this stage. If so, they will not be thinking clearly. And if they are not conversant with all of what is happening they are in no position to navigate a route out of this financial/legal jungle.

So they need guidance in order to protect themselves.

It is vital, too, they know that even in their seemingly precarious state, they continue to rights. And options.

And this – by virtue of their experience and know-how – is where the experts who provide help with debt shine on behalf of those in trouble.

Joe or Joan Average’s perception of their debt position is: “I have X amount of pounds going out on debt repayment per month and I don’t have enough coming in to service it.”

But Get Help With Debt’s experts assess things differently. Their questions at the outset are: What are the priority debts? What are the absolute essentials, the things that MUST be paid?

And what are the non-priority debts?

That simple priority/non-priority split makes things look very different. Immediately. And once that difference has been established, those experts can get to work on finding solutions to your problems.

Follow the contact details on this Get Help With Debt site and benefit from the assistance you require.

I Need A Debt Management Plan

I Need A Debt Management Plan

Debt debilitates people. It affects their physical and mental health, robs them of their self-respect and slowly, gradually, ultimately takes away their sense of well-being having first ended their hopes and dreams.

American financial author and television/radio personality Dave Ramsey advised: “You must gain control over your money or the lack of it will forever control you.”

As advice goes, it wasn’t too wide of the mark.

It has never been easier to accumulate debt. We are encouraged to do so all the time with the entire capitalist economic system now appearing to run on tick. As a result, tens of millions of people spend tens of millions of pounds, dollars, euros or whatever else buying what they want when they want it.

Profligacy was anathema to earlier generations, of course. Our grandparents used to warn against this lifestyle, their motto having been, “If you don’t have the money to buy it, don’t buy it.”

But somewhere or other along the road we turned off away from that simple straight and narrow route and instead began to do things another way. Many have lived to regret that change, having discovered for themselves the wisdom of Mr Micawber’s oft-quoted, recipe for happiness as cited in Charles Dickens’ David Copperfield: “Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, nought shillings and six pence, result misery.”

As long ago as 1732 physician and preacher Thomas Fuller warned: “Debt is the worst poverty.” Prophetic words.

And in William Shakespeare’s Hamlet, Polonius cautioned: “Neither a borrower nor a lender be, for loan oft loses both itself and friend.”

There is an even older proverb which urges, “Before borrowing money from a friend, decide which you need more.”

We really ought not to be too surprised, then, to find just how cripplingly undermining debt is; over the centuries – the millennia, even – the warnings against succumbing to it have been numerous, after all.

But at some point some person or group of people, who stood to make an awful lot of money from the process, decided things would be much better if we were all to start borrowing money – from them, of course – and spending it like it were our own. Never have the results of that philosophy been more obvious.

On January 13, 2016, a report by Simon Read appeared in The Independent beneath the headline, ‘Is the UK facing a debt disaster?’
It was a rhetorical question given that the opening paragraph read: ‘Shock new figures published today reveal that household debt has soared by two-fifths in just six months.’
It continued: ‘Aviva’s Family Finances report found that average debt now stands at £13,520 – a climb of £4,000 from £9,520 last summer. It is the highest levels seen in the quarterly survey for two-and-a-half years.

“It is concerning to see that household debt has grown to such levels,” said Caroline Siarkiewicz, head of UK debt advice for the Money Advice Service.

‘The rise in the figure – which doesn’t take account of mortgage debt – means the average amount owed is 24 per cent higher than in winter 2011 when the data was first recorded.

“The alarming levels of rising household debt, along with a recent reduction in income and savings levels, paints an uncertain picture for the family purse in 2016,” said Louise Colley, managing director, protection, Aviva Life UK.

‘Aviva’s reports makes for sobering reading. It suggests average credit card debt has climbed by more than a fifth in the last six months, from £1,960 in summer 2015 to £2,370 now. The amount owed on overdrafts has increased even more quickly, rising by almost two-fifths from £870 to £1,190.

‘Meanwhile, one in four families now owes money on a personal loan – that’s a rise of almost a quarter from a year ago – with an average outstanding balance of £2,080. Over the last five years, mortgage debt has also risen by a more than a fifth.’

So there, in those few paragraphs, you see all the problem areas identified – mortgages, credit cards, overdrafts and personal loans. Add payday loans to that quartet and you have a full house of debt in its various guises.

Benjamin Franklin once said: “Creditors have better memories than debtors.”

But the problem isn’t with debtors’ memories – it’s with their inability to pay, not least because we insist on spending money which we should instead be using to pay off what we already owe.

We borrow too much too readily in living beyond our means. And that translates as more going out than is coming in, resulting in misery as per Micawber.

If we are to escape it, debt must be managed. And almost certainly that will require help from an outsider with a lot of knowledge.

The good news is that such help is available from experts who know exactly what debt resolution entails and understand fully what, under the law, is required of a debtor. That’s a level of expertise most of us just don’t have.

Debt management is the answer to the question of how to get out of debt. So too is our commitment to the belief that debt relief is realistic and therefore can be achieved. Mortgage debt, credit card debt, unsecured loans, overdrafts – there is a solution for all of these.

There are different ways of achieving debt relief, though ultimately each will involve negotiation with creditors. YOU DO NOT HAVE TO DO THE NEGOTIATING. There are others who will act on your behalf.

But before they can do that, they and you have to sit down and have a very honest, to-the-point, no-nonsense, tell-it-like-is meeting to reveal the full extent of the problem and how it has come about.

Then, armed with that information, your adviser will come up with what amounts to a rescue plan designed not only to ensure your fiscal survival but to liberate you from the hardship in which currently you are entrapped. Getting free of debt isn’t so much a case of beating the wolf back from your door – it’s about making sure it never comes back to imprison you again.

Lenders listen to advisers, negotiators and facilitators they respect. If the debtor’s case is made to them by professionals of proven knowledge, they will do business.

Get Help With Debt certainly ticks those boxes. Typically they achieve 80% to 90% debt write-off for their clients, many of whom had feared  that they were beyond help.

Lenders know that a GHWD settlement proposal is only made after a thorough examination of all the facts – the size and nature of the debt, the circumstances whereby it has come about, income, outgoings, resultant ability – or inability – to pay, the precise type of loan(s) and the small print of the contract.

Their respect for GGHWD stems from experience of having negotiated with them in the past, plus the fact that they are Financial Conduct Authority (FCA)-licensed and regulated. In bankers’ eyes, that gives GHWD real status. It is also the client’s safeguard.

Loans can be re-negotiated. Loans can be written off. Banks know that attempts to recover debt take a lot of their time and money so they do the sums in weighing up how much of both they might have to spend pursuing something that ends up being irretrievable.

Loans are re-negotiated or written off every day of the week, with creditors ‘providing debt forgiveness’ to give the process its legal and technical title.
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Personal Debt, Do You Need An IVA?

Personal Debt: Do You Need An IVA?

Personal debt is a growing problem in the UK – and many financial forecasters are predicting that things could get a whole lot worse.

Earlier this year Louise Colley, managing director, protection, Aviva Life UK, warned:. “The alarming levels of rising household debt, along with a recent reduction in income and savings levels, paints an uncertain picture for the family purse in 2016.”

Personal debt has grown, in part due to record-low interest levels. Those have meant low-cost loans, with many having availed of the opportunity for so-called ‘cheap money’.

For many the day of reckoning has yet to come.

For others, however, it has arrived or will do so in the very near future. The number of ‘hits’ on the Get Help With Debt website confirms the level of public anxiety at this juncture.

And with so much uncertainty following the June 23 vote to leave the EU, a lot of UK citizens are keeping their fingers crossed that some of warnings as to what may happen a few months or years down the line fail to materialise.

The truth is that no-one knows for sure at this stage. It really is a ‘wait and see’ moment.

The likelihood is that personal debt will continue to be a major problem in the UK, leading to an increase in the number of Individual Voluntary Arrangements (IVAs) between those entrapped and those to whom they owe money advanced as unsecured loans.

An IVA is a formal debt solution enabling a debtor to pay back what he or she owes on unsecured loans – personal loans, credit cards and overdrafts – over an agreed period of time. This requires acceptance by 75% of the creditors.

And while an IVA is the best solution in certain situations, there are others in which a different course of action would be more appropriate and beneficial.

Get Help With Debt’s team of experts know what works best, where and when. For that reason they provide guidance best-suited to particular any given set of circumstances.

A typical IVA scenario is one in which money is owed to a number of creditors. That number may range from three to dozens.

If those debts are insurmountable, or if it is unrealistic for that debtor to continue to service an unfeasible volume of debts whilst trying to provide for their family, an IVA may well be the best solution to that problem.

An IVA can be a lump-sum settlement. Usually that money is raised through the debtor’s family or friends.

More typically, however, an IVA runs for a five-year period.

To qualify for an IVA you must be completely unable to repay your unsecured debts in a reasonable time, but able to make a reasonable monthly repayments towards clearing them.

.If  the IVA proposal is accepted  by the creditors, the borrower is required to meet all the repayment obligations to which he/she has committed himself/herself.

In negotiating an IVA, the whole premise is that it is both reasonable for you and affordable to you whilst acceptable to the creditors. But that means there is no wriggle room; it must be adhered to, without fail, from start to finish.

Provided the debtor keeps up his/her end of the bargain, creditors will do likewise. That means they will leave the debtor alone, so no more letters, phone calls or hassle.

And at the end of five years, provided the debtor has honoured the agreement, the creditors will write off any remaining debt. This can amount to a huge percentage of the original debt.

Because they know the law inside out, Get Help With Debt’s highly qualified personnel are equipped to negotiate best-case solutions to your debt problems.

In any given situation, they know what will work and what will not. So if an IVA is not the best solution, they will examine the other options to find which one is.

Always they start by contacting all of a client’s creditors to point out that the current situation is unaffordable, providing proof of why that is so.

At that, they will propose an interim arrangement to demonstrate willingness to pay what is affordable.

Meanwhile the team will work on a more permanent solution – an IVA, a debt management plan or bankruptcy.

The bottom line is that creditors are realists who know that they cannot get money where there is none. That is why they are willing to work with people whose knowledge, ability and integrity as negotiators they respect.

If, therefore, your case is presented by those your creditors recognise as being experts, it will be viewed much more favourably than would otherwise be true.

Use the contact details on the Get Help With Debt website to get advice on how best to solve your personal debt problems.