On top of that at the end of April people in the UK owed £1,637 billion in personal debt (Office for Budget Responsibility’s) and household debt is forecast to reach £2.4235 trillion in 2023-24.
And Credit card debt is the most common form of unsecured debt people are struggling with.
Almost two thirds of people in NI – 67.2% – who look for debt advice are dealing with more than £8000 in credit card debt they cannot afford.
And the number of people defaulting on their credit card debts soared in the first three months of this year, according to figures from the Bank of England.
Credit card lenders reported that defaults jumped to their highest level since the first half of 2017, following a deteriorating trend that dates back to last summer.
The default rate, which is calculated by the central bank based on a balance of responses from lenders, increased to 22.9% in the first quarter from 12.7% in the last quarter of 2018 and -11.2% in the third quarter of the same year. A positive figure indicates that the number of defaults has increased.
The last time the credit card default rate rose above 20% was in the second quarter of 2017, when it hit 25.4%.
With wage growth stagnating since the financial crisis ten years ago – there has been a -5.5% change in the average real wage figures since the pre-cash peak in February 2008- it is no surprise that people have been forced to turn to credit cards just to make ends meet.
And with no sign of wage growth, the situation will only spiral downward. To make matters worse, credit lending companies are releasing new offers to lure customers in. Deals like buy now pay later and 0% interest deals for short periods of time.
But with these deals it can be easy to misunderstand the complicated terms and conditions or overspend while trying to make the most of the offer. And if you are not careful to make repayments on time and in full, you can end up with your credit card debt getting out of control with interest payments accumulating and charges mounting.
Where can I get help?
Get Help With Debt typically achieves up to 90% debt write-off for their clients, many of whom had feared that they were beyond help.
To get the process started you can take our online assessment before booking your free, no-obligation consultation with one of our debt advisors at our Belfast office – beside the SSE Arena – to find out how we can help you?
Once you have spoken with your advisor by phone, we can present you with a range of bespoke solutions that will help you make an informed decision about what is the best way forward for you. We offer a range of options to meet the needs of our clients.
What options do we have to free you from your debt struggles?
1 Negotiated agreement with creditors
This is a way to reduce your debt repayment by explaining to your creditors you are having difficulties – but want to repay your debt as best as you can.
Creditors are likely to be open to negotiated reduced payments once you have proven hardships.
An Individual Voluntary Arrangement Is a formal agreement between you and your creditor and is seen as an alternative to bankruptcy.
In an IVA you make an offer to your creditors to repay a portion of your debt over a set period, which is generally five years for monthly contribution based IVA’s. You can also propose a shorter IVA based on a lump sum offer.
If your IVA is approved by your creditors and you successfully pay all the funds you proposed, then at the end of the IVA any balances left on your debts are written off.
The IVA has to be voted on by your creditors and agreed by 75% by value of those creditors who vote.
3 Debt Relief Order
A DRO is a simplified, quicker and cheaper alternative to bankruptcy in the UK, suitable for debtors who have few or no assets (less than £1000 and not homeowners) and little disposable income (less than £50 per month).
The maximum level of debt that is allowed for this is £20000.
4 Debt Management Plan
With a debt management plan, you will have one monthly payment to worry about and you’ll only have to pay whatever is affordable for you until your debts have been cleared.
A DMA will also secure a lower overall interest rate than you had been on before.
There is no maximum or minimum amount of debt that can be included in a bankruptcy. However, a creditor can only issue a bankruptcy petition against you if you owe them £5000 or more.
Almost all debts can be included, some exceptions are student loans, court fines, or maintenance arrears, child support arrears, debts built up through fraud or debts arising from a personal injury claim.
Most bankrupts are discharged from their debts after one year but there can be exceptions to this. If you have surplus monthly income you are expected to pay this to your bankruptcy for three years.
You can petition for your own bankruptcy or a creditor can make you bankrupt but only if you owe them more than £5000.
6 Debt re-organisation/consolidation loan
A debt consolidation loan means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones. In effect, multiple debts are combined into a single, larger piece of debt, usually with more favourable pay-off terms.
And CD Fairfield’s Tom Cardwell (Director) explains what they offer people who are struggling with debt.
“At Get Help with Debt we know that financial problems can affect people in all walks of life. That is why it is our aim is to support you and give you a stress-free journey away from their financial hardship.
“The first step of this journey is a chat with one of our debt advisors. Through the years our staff have overseen 35000 IVA’s with a combined experience of over 30 years dealing with this issue.
“We offer telephone and face to face advice totally free of charge. You will then be a given a dedicated and experienced case manager who will take away the stress of dealing with those dreaded letters and telephone calls from your creditors. Chat with us today to find out the best option for you,” he added.
What our clients have said about our service?
“I was finding it difficult to sleep with the stress of dealing with my creditors, but once I spoke to Craig he put me at ease that there were options available. Each step of the IVA process was fully explained and everyone who has worked on my case have been very kind and supportive. Thank you so much for giving me a chance to put an end to my debt problems.” Mr D Moore (Ballymena)
“We were having a difficult time and thought we would have to go bankrupt but were fearful of losing our home. We realised an IVA was a better option to deal with our debts and protect our home, so we were so happy it was approved. A special thank you to Emma who has been so helpful and a pillar of strength for me! Thanks to everyone for all your hard work.” E Marshall (Lisburn)
“Since my initial chat the whole service has been fantastic. I was totally lost with no idea what to do with my debts and Laura was so kind at sorting through my paperwork to figure everything out for me. I know it is only the start of my IVA but I now have hope that I will be debt free soon.” S Glynn (Dungannon)
“Thanks for taking away the hassle and worry of dealing with my creditors and I am determined to see this through. Everything was easier than I thought it was going to be, and it was nice to know that when you said we would get the paperwork that day we got it that day! “ L McAllister (Belfast)
“Everyone so kind and helpful and nothing is never an issue. Big thanks to Luke at getting things sorted quicker near the end and I cannot believe I am now debt free.” J Downey (Newry)
“It all started with a phone call from a strange number that I was reluctant to answer but am thankful I did. My IVA was sorted in a few weeks after struggling for years. You have been lifesavers and a massive weight has been lifted from me. Thank you thank you thank you.” B Lowry (Belfast)
“Just wanted to say a big thanks to you for getting my finances back on track I couldn’t have done it without your assistance. Thanks again to Craig I would highly recommend him for advice if you are struggling with your debts.” J Jamison (Cookstown)
“A great organisation with non-judgemental staff. They listened to my concerns and worries and alleviated the stress that I had. From day one everything went smoothly. Thanks to all the team for your help.” M Rodgers (Bangor)
What do Get Help With Debt deliver for their clients?
Lenders listen to advisers, negotiators and facilitators they respect. If the debtor’s case is made to them by professionals who have proven knowledge, they will do business.
Lenders know that a Get Help With Debt settlement proposal is only made after a thorough examination of all the facts.
Lenders want the issue resolved as much as you do. Get Help With Debt never makes judgments as we are all human and everyone makes mistakes! It’s how you fix those mistakes that matters.
We are Financial Conduct Authority regulated and if you find yourself in debt stress have a no obligation chat with one of our experienced advisors today on 02890 393626.