Uk Citizens Seeking Debt Advice Still At All Time High
It's little wonder that a plethora of debt management companies continue to
enter the market as demand for debt help in the UK remains higher than at any time since records began. According to the Bank of England's debt figures, total UK personal debt now stands at nearly 1.5 trillion pounds, which in numeric terms looks quite staggering: 1,457,000,000,000.
A simple way to help understand just what an enormous figure this is would be to put it like this. Imagine if you watched the second hand on your watch tick round for 1 million seconds. It would take you approximately 12 days to count to a million. A million is generally considered to be a pretty big number, right? To count to a trillion would take over thirty thousand years!
With such enormous sums owed on credit cards, loans, overdrafts, mortgages and so forth, it's no surprise that the numbers seeking debt help is stretching the debt advice charities to the limit. The Citizens Advice Bureau is reportedly dealing with 9,562 new debt problems every day. Figures also confirm that over a thousand people every single day are actively seeking some sort of formal debt rescheduling.
The problem however with debt advice from most debt charities, is that because of the sheer numbers seeking debt help, most debtors are treated with a one size fits all system designed to get people in and out of the door as quickly as possible. Yes, they will go through all the options that a client has to solve his debt problems such as debt management, IVA, consolidation or bankruptcy. But if a client's case can be analysed in more depth, there may be extra ways in which a debtor may be able to reduce the amount owed, or even claim compensation for mis-sold financial products.
When people make applications to take out a loan, credit card, store card or mortgage, lenders have over the years looked at ways to increase their profits from their lending and one way that has proved particularly profitable has been to offer Payment Protection Insurance.
In theory, it makes sense to insure yourself against unforeseen problems that may arise during the course of repayment such as redundancy, ill health or an accident. However, the more profits the banks made from selling PPI, the more aggressive their approach became and this has led to a high number people looking to reclaim payment protection insurance on the grounds of mis-selling.
Debtors who, when taking out their loan or credit card, were told things like "you have got more chance of getting the loan if you take the insurance" or "we can't accept you for the loan unless you take the PPI" would have a valid case to reclaim ppi. Some people may even be unaware that they have a valid case for reclaiming payment protection, such as the self employed for example, as they may not be aware that many policies exclude the self employed from ever being able to make a claim from the outset!
Other areas where people in debt may want to investigate whether or not they may be entitled to reduce their outstanding balances could include unfair charges and unfair credit agreements.
By "charges" we" are talking bank charges levied for things such as bounced cheques or exceeding the overdraft limit, or credit card charges applied for exceeding credit limits or missing payment deadlines. Even though the Office of Fair trading recently lost a fight against the banks in regards to unfair charges, many people are still making claims against their banks, but debtors can attempt to reclaim credit card charges if they feel they have been unfairly overcharged, as this is a separate issue to bank charges and was not included in the test case.
In regards to unfair credit agreement claims, successes in this area against the banks have not been widespread but it is not beyond possibility that, as with PPI, many people may have been mis-sold their loan or mortgage without ever knowing it. You can find many companies on the internet offering debt elimination programs which seek to identify mis-selling of credit contracts and then have the debt deemed unenforceable. However the jury is still out on this one and it remains to be seen whether we have all been treated completely fairly by the banks over the years or whether we have been getting ripped off to high heaven - this is one for the claims management companies's solicitors to battle out.
by: Mark J Ellen
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