| ding to a recently published article by the Financial | | | | satisfied and you need to really understand what you |
| Services Authority (FSA) on the latest mortgage | | | | are doing and the consequences. Below is a quick |
| lending statistic they reported a sharp surge in | | | | explanation of the four types of debt help you can find: |
| mortgage arrears. With borrowers continuing to | | | | Debt Consolidation |
| struggle to clear their mortgage arrears, the numbers | | | | This is only possible if you are a homeowner and you |
| of arrears have been progressively increasing since | | | | have sufficient equity in your home. You can |
| the beginning of 2007. By the end of 2008 there were | | | | consolidate some or all of your debt into a secured |
| 377,000 mortgage accounts in arrears, which is an | | | | homeowner loan. You must think carefully before |
| increase of 36,000 accounts. This is an increase of | | | | securing other unsecured debts against your home. |
| 31% on the previous year. | | | | Your home may be repossessed if you do not keep |
| The FSA report comes in light of a recent survey of | | | | up your repayments on your mortgage |
| 1,407 new debt clients conducted by the Citizens | | | | Debt Management Plan |
| Advice Bureaux (CAB). They found the average | | | | This is a great way of getting your debts under control |
| amount of debt owed by their clients’ was | | | | and it helps to protect your home. Debt Consultants |
| £16,971 in 2008 and one client in ten had ten or | | | | are able to negotiate with your creditors (those people |
| more credit card debts. More than 50% of these | | | | you owe money to) and in most cases they are able |
| clients had four or more priority debts like their rent or | | | | to have the interest on your unsecured debts (credit |
| mortgage, rent, electricity, gas, water or council tax | | | | cards, loans) frozen to help you pay off your debts |
| arrears. The Citizens Advice Bureaux discovered that | | | | faster. |
| a third of these people spent more than half of their | | | | Individual Voluntary Arrangement (IVA) |
| monthly income on housing costs and forty five | | | | IVA help is available to most people with debts of |
| percent of them had mortgage and secured loans that | | | | more than £15,000 and no way of paying the |
| were in arrears. | | | | debts off. This kind of arrangement is a legally binding |
| So what can you do if you find yourself struggling to | | | | arrangement and you can be debt free within 5 years |
| clear your debts? If you’re struggling with | | | | and it helps to protect your home so you do not lose it. |
| mortgage arrears, paying your mortgage, credit card | | | | Bankruptcy |
| bills and loan commitments. Then you will need to | | | | This is a solution of last resort and should only be |
| seriously speak to a professional debt advisor that is | | | | considered for serious debt problems when there is no |
| qualified to talk about debt and the various solutions | | | | other financial solution. Bankruptcy does protect you |
| available. You need to speak to someone who offers | | | | from your creditors and it allows you to start again. |
| free and impartial help and advice. It is important that | | | | Think carefully about the advice you are being offered |
| they assess your needs and they are able to explain | | | | and if you are not happy with the advice you are |
| the different types of debt solutions like Debt | | | | receiving find a second and even a third opinion. There |
| Consolidation, Debt Management plans, Individual | | | | is a growing number of debt advice websites that are |
| Voluntary Arrangement (IVA) or Bankruptcy. Ask as | | | | providing questionable debt advice so you do need to |
| many questions as you need to you need to feel | | | | carry out your own due diligence. |