Going Bankrupt will cost almost double from 6th April 2010...

Bankruptcy petition fees from the Government backed Insolvency Service will increase from £360 to £450 from 6th April 2010. This basic fee increase equates to 25 per cent and there will also be an additional court fee of £150. The new total fee is £600, just £60 short of double the current fee.

The reason given by the Insolvencey service was because of the economic downturn which means that money recovered from debtors is not enough to cover the costs of going bankrupt. The Insolvency Service said that the fall in property prices was one of the main contributing factors.

An Insolvency Service spokesperson said: 'The economic downturn has reduced asset values especially property which means a greater proportion of cases don’t generate enough money to cover the fee.'

'This has meant that within the overall fee structure, we have had to ensure that more cash is realised earlier in the process. This has led to increases for some but will ensure that the cost of the regime is paid partly by the debtor and partly by creditors.'

'Over the last year, the average unsecured debt in debtor petition bankruptcies has been around £33,000. Even with the new higher petition deposit cost, it is not unreasonable to expect those getting the benefit of writing off this debt to pay a proportion of the cost.'

Craig Gedey Marketing Manager for Debt Advisory Line said: 'choosing bankruptcy is a huge decision and people must be sure it is the right choice for their curcumstances.'

'Choosing a DEMSA approved debt management company like Debt Advisory Line means that you can be sure the company will be providing advice that is best for your circumstances.'

'DEMSA stands for the 'Debt Managers Standards Association' and it is the only organisation within the debt management industry to have code approval from the Office of Fair Trading.'

Visit www.debtadvisoryline.co.uk today for more details or call our help line on 0800 542 6872.

The value of debts written off by UK banks shot up in 2009 from a total of £6.9 billion in 2008 to £9.3 billion in 2009.

The debts written off include £4.12 billion in credit card debt, up from £3.2 billion in 2008. The total of 'other loans' written off was up from £3.2 billion to £4.2 billion in 2009. The biggest jump was seen with mortgage debts written off more than doubling from £408 million in 2008 to £984 million in 2009.

The rest of the £4.12 billion debt write off includes £5.9 billion lent to non-financial businesses and £154 million lent to other financial corporations.

The main effect of these loses is felt by people who borrow and make repayments on time because the banks are simply increasing interest rates across all financial products. See our news from 22nd February; Credit Card Interest Rates Are Excessive

Craig Gedey, Marketing Manager at Debt Advisory Line said: 'With interest rates are still at an all time low the banks continue to make their mortgage lending criteria more stringent than ever which makes it increasingly difficult for first time buyers get on the property ladder.'

'The good news here is for people who may be coming towards the end of a fixed rate repayment period with their mortgage lender. Shopping around for a better mortgage deal could save hundreds of pounds in repayments."

'If you are stuggling to keep up with loan, credit card and even mortgage repayments Debt Advisory Line can help visit our web site www.debtadvisoryline.co.uk or call us Free on 0800 157 7254.'

The payment limit was raised on contactless cards yesterday to £15 per total purchase. This includes credit cards and debit cards using the new 'contactless' technology which allows customers to swipe their card to pay for purchases of £15 or less without entering a PIN or providing a signature.

It is estimated that 1 in 7 people in the UK will have a contactless card by the end of this year and the hope is that more UK retailers will offer contactless payments now that the limit has been increased.

A spokesperson for the UK card industry said that because the payment limit is relatively small fraudsters are not tempted to target this part of the card industry. Your card provider should cover any loss if the card is stolen and you report this at the earliest possible opportunity.

Brian Cunnington of Barclays said: 'Contactless technology is undoubtedly the future of payments and we are seeing it grow hugely in popularity.

'The new higher limit gives customers the flexibility of paying for even more transactions quickly, securely and conveniently via a contactless card payment and will lead to more retailers implementing the technology.'

The new Barclays Visa debit card will have the contactless technology built in as standard and there are now around 4 million Barclaycard credit cards with contactless technology live in the UK.

Craig Gedey Marketing Manager for Debt Advisory Line warned contactless card customers: 'You should always ensure you keep a close eye on credit card and debit card spending habits.'

'My worry with contactless payments is that people may run their bank accounts into overdraft or run over the available credit limit with their credit cards unless monthly management and especially clearing of credit card balances takes place every month.'

'Running up what may seem like an insignificant amount of debt at the time can soon add up and may lead to major debt problems if not managed correctly.'

'At Debt Advisory Line we offer free initial debt advice and we try to help our customers make one affordable monthly payment, we also deal with our customers creditors on their behlaf which can help take away the stress of debt.'

The credit report and credit checking web site Equifax says that more than 1 in 3 of us let credit card debts pile up; a situation that could lead to serious debt problems in the future.

Equifax say this dependence on credit could have serious cost implications on family budgets as 22 per cent of people only make the minimum repayment, while 35 per cent of people are paying off up to 25 per cent of their credit card debts every month. More than one in five people said that debts have increased over the last twelve month.

With 32 per cent of people saying they are further in debt than twelve months ago it is not surprising that credit card repayments are amongst the first to be cut to a minimum as families struggle to cope with monthly budgets.

Neil Munroe, External Affairs Director at Equifax said ‘I don’t think consumers are naïve they know that reducing payments on credit cards is going to cost them in the long-run. But it seems they don’t feel they have much choice.’

The survey of Equifax Personal Solutions customers showed yet more pressure is put on to family finances with 20 per cent of people saying they have lost income because of bonus, overtime or working hour cut backs. At the beginning of 2010 nearly 25 per cent of people said they had not received a pay rise in the last twelve months and 64 per cent of people are not expecting one.

Craig Gedey Marketing Manager at Debt Advisory Line said: ‘Reducing credit card repayments is fine as long as people understand and are comfortable with the affect this will have on the time period over which repayments are made.’

‘However, anyone who is starting to make payments for everyday living expenses on a credit card with no means to pay this debt off every month should seek debt advice immediately.’

‘At debt advisory line we help customers with all manner of debts, from credit card and loan debt to mortgage debts. Over 95 per cent of our customers would recommend their friends and family.’

Following on from our news story last week – highest credit card interest rates since 1998 – A former advisor to the Government has said that credit card rates ‘cannot be justified.’

Ros Altmann is calling for an enquiry into how the credit card industry sets interest rates. He says that credit card interest rates of around 18 per cent, the highest for over a decade, are excessive and he thinks there could be the need for a regulatory body to oversee how interest rates are set.

The Government is looking into some of the charges credit card companies make but this does not include the setting of interest rates.

The credit card companies say that failed payments during the recession are the reason why interest rates are so high. However, this is becoming harder to accept considering the all-time low Bank of England base rate of 0.5 per cent.

Craig Gedey, Marketing Manager at Debt Advisory Line said: ‘Higher interest rates simply mean higher repayments for customers.’

‘Interest rates of 18 per cent will surely only force the credit card customers already struggling with repayments, further into debt?’

‘Higher interest rates may also tip some customers ‘over the edge’ and into a situation where they miss a payment.’

‘Anyone who is struggling to keep up with repayment on any debt can speak to us at the Debt Advisory Line. We know how stressful debt is and work to help people under pressure pay off their debts by providing Expert Debt Advice.’

A report from The Times says that ‘There are estimated to be between 40 million and 50 million active financial accounts of all types, including mortgages and credit cards, classed as “missing” because they do not appear on the credit files held about borrowers by credit reference agencies.’

These ‘missing’ financial accounts are the details of bank accounts, mortgages and credit cards opened before 2000. They are referred to as ‘missing’ because they do not show on borrower’s credit files held by credit reference agencies.

The problem seems to stem from the fact that not all banks and building societies have joined industry-wide practices of sharing information about borrowers, even if the borrowers have given their permission.  Legally, high street lenders are not obliged to share this information.

Adverse credit information like missed payments and CCJs are already being shared more commonly by the banks.

Policy adviser at Which? Vera Cottrell said: “A missing account could have a significant impact on a lending decision. We do not think anybody should be forced to agree to share data, but if you are applying for credit it makes sense that lenders see what other accounts you have open. It is vital that the Government and the industry work out a solution to this problem.”

Craig Gedey Marketing Manager at Debt Advisory Line said: ‘A small amount of information on your credit file may affect an application for credit as much as having poor credit information like missed payments.’

‘Ultimately the more positive information a lender can see on your credit file the more likely you are to be accepted for the credit you want. However this report suggests that it now also depends if the lender has access to the positive aspects of your credit file.’

‘If you are struggling to keep up with repayments on a loan, mortgage or credit card you should seek professional advice from a DEMSA approved debt Management Company.’

‘At the Debt Advisory Line our focus is helping people get out of debt in the shortest possible time. We know how stressful debt is and work to help people who feel under pressure.’

Credit card interest rates now stand at an average of 18.8 per cent, which is the highest since 1998. Rather alarmingly some customers are reportedly facing interest payments of more than 40 per cent on their credit card borrowing.

This recent hike in credit card interest rates may be seen as unfair by many UK consumers especially considering the fact that the Bank of England Base rate remains at a record low level.

Research from the financial product comparison web site Moneyfacts.co.uk found that average interest rates on credit cards in 2006 were 14.8 per cent. The increase in interest rates to 18.8 per cent today means that credit card holders with an existing debt of £5,000 now face additional interest payments of £2,289 over the life of their debt.

Moneyfacts.co.uk spokesman Michelle Slade said: 'The UK continues to suffer from a high level of unemployment and providers are worried about the increased risk of customers not repaying their debts. The increased risk continues to be passed on to both new and existing credit card customers through higher rates.'

'Other charges such as balance transfer, cash withdrawal and foreign transfer fees also continue to go up, leaving customers paying more across the board.'

Research from Moneysupermarket.com indicated that 14 million consumers use credit cards to pay for every day expenses and 1 in 5 UK adults have 3 or more credit cards. Credit Card Expert at moneysupermarket.com, Peter Harrison, said: 'Holding more than one credit card can be a good idea; if you are using one for balance transfers and one for purchases, and have suitable 0% deals on both.'

Craig Gedey, Marketing Manager at Debt Advisory Line said: 'Credit card customers need to be fully aware of the increase in charges they are facing. Checking your credit card statements on a regular basis is a good way of spotting an increase in interest rates.'

'It is all very well using separate credit cards for balance transfers and purchases but as Moneyfacts.co.uk have already pointed out the increase in charges is across the board, which could catch out some customers.'

'Anyone who is struggling to keep up with repayments on their debts should consider professional debt management advice from a DEMSA approved debt Management Company.'

With reports suggesting that some of the Capital One credit cards now charge customers almost 40 per cent in interest rates you can see why it is very important to make sure you have the most competitive interest rate possible and perhaps look at a debt management plan as a way of repaying the debt should you begin to struggle with repayments.

The monthly rental market report shows mortgage applications rose sharply in January 2010, up 14% on December 2009 and a 12% increase on January 2009.

More competition between lenders for the returning first-time buyer market has also resulted in a new wave of high LTV products dominating its the Top 10 mortgage applications for January.

The results are based on the activities of nearly 800 Countrywide mortgage consultants operating throughout the UK.

They found that eight products in the Top 10 mortgage applications for January were designed with first-time buyers in mind - four of which were 90% LTV.

The increasing number of 90% LTV mortgage products has pushed up the average interest rate of Countrywide’s Top 10 mortgage applications to levels not seen since July 2009.

The average interest rate has increased from 4.29% in December 09 to 4.78% in January 2010.

Countrywide’s findings also support recent reports that indicate a number of lenders have pushed up their standard variable rates, which might finally tempt remortgage customers.

One consequence of this action is the increase in remortgage applications with Countrywide seeing a 3% increase in January 2010 compared to December 2009 – the highest level since June 09.

Grenville Turner, group chief executive of Countrywide, says: “Activity in the market is on the up with our estate agency division reporting a 32% increase in new buyer enquiries.

“Lenders are also moving in the right direction and our broker network has noted that there are now 85 percent more mortgage products available compared to the same period last year.

“While the overall interest rate of Countrywide’s Top 10 Mortgage Applications has increased, this is attributed to the strong return of high LTV products with four 90 percent LTVs pushing up the average interest rate, as the best deals are reserved for those with the biggest deposits.

Grenville adds: “Improved lending conditions and competitive pricing is offset by the reality that customers with a 10% deposit could pay up to 2.1%  more in interest, as opposed to those who can afford a 20% deposit.

“That said, from a first-time buyer perspective, things are becoming more affordable and in the last few weeks we’ve seen a three year product originally priced at 6.59% drop to 5.89% and as first time buyers underpin the market, we hope more lenders will do the same.”

David Bagshaw Managing Director Financial Advisory Line, commented “The data from Countrywide is invaluable as an indication of market forces, more and more are we seeing the current appetite in the consumer starting the long process of influencing the lenders to give our client what they want – a fair and open mortgage market, lets hope that this trend is maintained as we see the country remove its self further from the grip of the recession”

House prices have risen for the seventh consecutive month - rising by 0.6% in January compared with December, the Halifax has said.

The average UK home was valued some 3.6% higher in January than a year earlier, at £169,777.

The figures show the continued trend of rising prices which has helped mortgage providers ease their lending criteria slightly. However, the Halifax is predicting that prices will stay flat overall in 2010.

The Halifax, which is now owned by the Lloyds Banking Group, said that the average price of a UK home was now 9.9% above its trough in April 2009.

However, housing economist Martin Ellis said that January's rise was more modest than in any of the previous six months. The average rise of the previous six months was 1.1%.

Rising values

The annual rise is calculated using an average of the last three months with the same three months a year earlier.

This has risen sharply owing to the low levels of a year ago. Interest rates have also been at a historically low level, which has helped make mortgages more affordable, Mr Ellis said.

"The marked reduction in interest rates over the past 15 months has, from a low base, boosted housing demand from those with a sufficient deposit to enter the market," he said.

"Increased demand has combined with a low supply of properties available for sale to push up prices."

Since April, there has been an increase in the average property price of £15,287. However, this followed a notable house price slump when prices declined by 23% between August 2007 and April 2009.

Supply of homes

Mr Ellis added that the state of the economy would be the dominant factor for the future trend for house prices.

However, he said that there were signs that more people were putting up homes for sale, which would curb any future rises.

The Halifax's figures show that the pace of increase in house prices has been slackening off a bit. Prices in the past three months were 3.3% higher than in the previous three months.

That was down from the recent high point recorded in November, when the three-month on three-month rate hit a peak of 3.7%. That was the highest it had been since November 2006.

Rising prices have helped lead to a rise in the availability of mortgages over the last month.

The number of deals on offer is up 20% compared with the start of the year, figures from financial information service Moneyfacts show. Some of these include deals requiring a relatively small deposit of 10%.

Catherine Penman, head of research at property company Carter Jonas, said that the housing market was still starved of good quality homes for sale. She said that uncertainty in the market and the economy was preventing people with premium homes in good locations selling up. Predicting a 5% fall in prices in 2010, she said that the regional market was slow. London was an isolated case, where the market was buoyant owing to international buyers. "The price of a property is defined by its location and quality, not what is happening in the broader market," she said.

David Bagshaw, Managing Director of Financial Advisory Line commented “the signs are encouraging that market is picking up and we can see the lenders moving criteria to support the public in their need for Lending, lets hoe that this continues”

Tim Moss, head of loans and debt at moneysupermarket.com, said: "We can expect to see around 30 per cent more applications for debt management plans this year and consumers have to be very careful when dipping their toe into this world, as it currently exists outside the realm of government regulation."

Moss continued: "We have heard of horrific cases where up to six payments are taken in charges before a creditor is paid, this means you will have paid lots of money to the debt manager before they have cleared a single penny of your debt.”

"If you are going to use a debt management company you should only do so with your eyes wide open. Not being fully aware of all the charges involved could make a bad financial situation much much worse," he added.

Craig Gedey, Marketing Manager at Debt Advisory Line said: ‘We are one of the DEMSA accredited debt management companies listed on Moneysupermarket.com.’

‘It is vital that people seeking debt advice contact a DEMSA accredited Debt Company. This means that the code of conduct, as set out by DEMSA is adhered to at all times.’

‘People should also be aware that the DEMSA code of practice is approved under the OFT (Office of Fair Trading) Consumer Codes Approval Scheme (CCAS). This provides more confidence for people when dealing with debt management companies.’

Gedey added: ‘The Debt Advisory Line were voted ‘debt management provider of the year 2008 & 2009’ and over 95 per cent our customers would recommend their friends and family.’

According to moneysupermarket.com high unemployment and rising interest rates are expected to drive a 30 per cent spike in the number of people seeking debt management plans in 2010.

It looks like the time lag between the beginning of recession in the UK and Britons losing control of their finances may have lapsed.

A record 150,000 Brits could be facing insolvency, 15 per cent more than last year, as debt levels climb to around £56,000 for every UK household. Personal debt, excluding mortgages, stands at around £24,000 and on average people are trying to deal with 11 different creditors.

These debts are made up of a combination of mortgages, credit cards and personal loans; with the per household debt being 60% more than the average pre-tax income.

Not surprisingly there has been a 30 per cent increase in the number of people asking for debt help and the National Audit Office reports that some agencies are turning away new clients.

Craig Gedey, Marketing Manager at Debt Advisory Line said: ‘Seeking professional help as quickly as possible is key for these people today.”

“If you are trying to deal with 11 different creditors then adding more to that list of debts with further borrowing is not the solution.”

“At the Debt Advisory Line we give professional and impartial advice. We provide free initial advice from qualified debt advisors so that people are best informed to make their own choice about which debt solution is right for them.”

The Governments ‘Debt Strategy’ from April 2004 until March 2011 is to help 261,000 people at a cost of £330 each. At the moment 270,000 people have been advised at a cost of £311 each. However looking at the current UK debt figures it is becoming obvious that more needs to be done.

According to figures from Credit Action 1,995 people are made redundant every day in UK. This is despite all the recent reports that the UK is now officially out of recession as the last quarter of 2009 saw a 0.01% growth in Gross Domestic Product (GDP).

Credit Action reports that every UK adult now owes £30,252 which equates to 129 per cent of average earnings. Total UK personal debt stood at £1,460bn at the end of 2009 which was 0.7 per cent higher than 2008.

With such large personal debts redundancy can have a huge impact on an individual and their ability to make mortgage payments, other credit payments and may even impact on paying household bills such as utilities and food.

In fact 386 people are reported to be declared bankrupt or insolvent every day and every 11.2 minutes a property is repossessed.

Craig Gedey, Marketing Manager at Debt Advisory Line said: “If people are struggling to keep up with repayments on their mortgage or other debts they should seriously consider speaking to a qualified debt management company.”

“Ignoring your current debt levels and applying for more credit to pay off existing debts or bills is not a long term or viable solution.”

“A good debt management company will negotiate on your behalf to have interest charges and payments reduced and they should always work to have your debts cleared as quickly as possible. This is something we always try to achieve for our customers.”

Other borrowing on car finance, retail purchases, credit cards, personal loans and overdrafts also rose to £4,692 for every UK adult at the end of December 2009.

Rather alarmingly more than 25 per cent of UK adults say they are relying on winning the lottery to help pay off their debts. Only 1 in 20 UK adults will be looking for professional debt help.

With total lending by UK banks on the increase for the first time since June 2009 perhaps people should borrow with caution as we move into 2010. New figures from The Citizens Advice Bureau report that 9,300 people contact them for debt help every day.

For the first time since June 2009 the amount being borrowed on credit cards, loans and overdrafts was greater than the amount being repaid by consumers in the UK. This is a surprising change in the trend we’ve seen so far - during an economic downturn consumers’ tend to pay off debts, especially when interest rates are so low.

The main reason for this increase was credit card borrowing, which increased by £195 million. With personal loans and overdraft borrowing the opposite was true with repayments still higher by £143 million.

Is this increased spending on plastic a direct result of consumer Christmas spending? Andrew Goodwin of Ernst and Young said: "The small increase in consumer credit is likely to be connected to consumers bringing forward purchases to avoid the VAT increase and a relapse is likely next month,"

"The household sector is continuing to deleverage and we expect consumers to provide little support to the recovery as it develops this year."

The number of approved mortgages for purchases was down in December 2009 to 59,023 when compared to November 2009 but this was still higher than the average for the previous 6 months.

£1.2 Billion was double the average of the last 6 months for total net lending to individuals. Most of this lending is mortgage lending.

When it comes to remortgaging consumers are choosing to remain with their current lender as their fixed rate mortgage deal ends. The number of consumers remortgaging increased slightly to 27,276.

The Bank of England Base rate is expected to remain low for the first quarter of 2010 and perhaps further into 2010.

Commenting on Building Society Savers, Brian Morris, BSA’s Head of Savings Policy said "Savers continue to face difficult conditions while the Bank Rate remains at such a very low level, especially with inflation returning in the near term,"

"December is traditionally a slow month for savings as consumers make additional purchases for the Christmas period, and the return of VAT to 17.5% at the end of the year provided a further incentive to spend."

Of course Building Societies have traditionally relied on the business model where savings are used to fund mortgage lending. This model has been hit hard during the downtown; in December £400 million was withdrawn as customers either paid off debts, moved savings to higher interest rate accounts or funded Christmas spending.

Building societies net lending fell by £283 million in December 2009, this compares to an increase of £273 million in December of 2008.

A newly commissioned government report says that the gap between rich and poor is wider now than it was 40 years ago.

The National Equity Panel, set up by the government in 2008, found that huge differences still remain between minority groups and also men and women when it comes to employment and pay.

Of the people who have worked in what is classed as a top profession, fifty per cent of them have net assets worth more than £900,000. This compares to only ten per cent of unskilled workers having total assets worth less than £8,000.

The report also revealed apparent discrimination against people from ethnic minorities. People from nearly every minority group were also reportedly less likely to be in paid employment than white British men and women.

Equalities Minister Harriet Harman said: “ sustained and focussed attention” would be needed and "But for the sake of the right of every individual to reach their full potential, for the sake of a strong and meritocratic economy and to achieve a peaceful and cohesive society, that is the challenge that must be met."

Professor John Hills, who is the National Equity Panel Chair said "The challenge that our report puts down to all political parties is how do you create a level playing field when there are such large differences between the resources that different people have available to them. “

"Things that allow you to buy a house in the catchment area of a good school or allow you to help your children get on the housing ladder. These are very big differences."

The study said that the type of job and pay a parent had could have a cumulative effect throughout a person's life, setting them on "tracks that make all sorts of differences".

The report also said that the gap between rich and poor could be ‘colossal’ by retirement age.

Valentine's Day is fast approaching and whilst you want to do something special for the one you love, times are tough and you’re not able to spare a lot of cash.

But being truly romantic doesn’t need to cost a fortune and mean be the end of those good intentions to clear your debts, according to leading debt management company, Debt Advisory Line.

Mike Ransom of Debt Advisory Line, holder of the title of Debt Management Provider of the Year, said: “You can save money this Valentine’s Day and still show your loved one how much they mean to you! Many people are still feeling the pinch from overspending during the festive season so January debt is still having a strong effect. Booking a table at a swanky restaurant can be extremely costly and coupled with the fact that you won’t find much space to yourselves in a busy eaterie, it won’t prove to be the romantic gesture you dreamed of!”

Debt Advisory Line has compiled some simple but effective money saving advice to help people make the most of Valentine’s Day without ruining their well thought out budget plans.

• Meal deals and money saving offers - keep an eye on restaurant and supermarket meal deal offers – vouchers are always available to download on money saving websites offering ‘buy one get one free’ meals or two courses for as little as £10 so keep an eye out. Many supermarkets are also doing a three-course Valentine's dinner for two for £10, as well as money off selected champagnes and sparkling wines.

• Cooking for your Valentine – who doesn’t appreciate a home-cooked meal, especially if you make your Valentine’s favourite dish? Eating at home saves money over eating in a restaurant and can be more romantic. Fill the room with candles and enjoy a bottle of wine.

• Breakfast in bed – this is always a nice treat and what better way to spoil your Valentine than cooking a delicious breakfast to start the day. This year Valentine’s Day falls on a Sunday so it’s a good excuse for a lie-in and a lazy morning.

• Think outside the box – roses are a traditional Valentine’s gift but are pricey. Carnations, Chrysanthemums, Snow Drops, Lilies, Freesia and even rarer choices like a nice bunch of lavender or anemone are less expensive and make a unique gift.

• As a symbol of your growing love plant a shrub or a rose bush in the garden and watch it grow together throughout the year.

• Make something! - create your own poem, or if you sing and play an instrument - create a song!

• If Valentine's Day does matter to you, then it doesn't have to be all hearts and roses – instead of splurging money on chocolates and cards surprise your other half by buying them something you know they already want and will appreciate more if you get it as a gift.

• If it's raining on Sunday that romantic walk might be called off, but there are plenty of places you can go where you don't have to pay to get in. Look into art galleries and museums near you and maximize the benefits of memberships already paid for such as leisure centres, and stately homes within the National Trust.

See www.debtadvisoryline.co.uk  

Recent research from Scottish Widows, the Pensions, Insurance and Savings Company confirms that 4 million UK parents will be forced back to work in 2010 because of increasing levels of debt.

The Scottish Widows figures reveal that of around 6.6 million UK households with dependent children 4 million households are dependent on 2 or more salaries for the household. Overall 11.3 million UK households rely on more than one salary to cover household bills.

Clive Allison, Scottish Widows Protection director, said: "The days of one parent going out to work while the other takes care of the family is just not an option for many people. Nearly half of families with dependent children now rely on two incomes to maintain a decent standard of living."

Levels of debt also rocketed with children – the average household with dependent children has £91,648 still outstanding on their mortgage, a £3,000 jump from levels last year.

But the average household with dependent children has carried over £8,653 in short term debt over the last three months, compared to an average of £7003 for those with no dependent children.

Allison said: "This reliance on two incomes to run the family homes means millions of households are leaving themselves at risk of being unable to survive financially if one of the bread winners become unable to work as a result of critical illness, death, disability or due to an accident."

Parents also face higher levels of outstanding debt if they have more than one child. Those with one dependent child face £78,830 of debt, having two dependent children means parents have £98,122 of debt and parents with three or more children face £107,922 of debt.

Warning: Be wary of companies that may contact you claiming that loan agreements are unenforceable. As provider of your debt management plan it is important we make you aware that many of the statements about loan agreements are not only untrue but dangerously misleading.

Independent regulatory bodies are all concerned about companies making these claims, charging vulnerable customers moneys up front and even diverting direct debits paying creditors only to find that the customer is in a worse position than when they began.

The charity Citizens Advice said there had been a recent "rash" of BOGUS adverts from claims handling firms stating that most loan agreements were "unenforceable".  Among the BOGUS claims were: "Eighty percent of credit agreements are unenforceable" ; "Fifty million credit agreements are created every year, at least 25 million are unenforceable" ; "We'll get your credit cards written off within 6 weeks!" "Fast results guaranteed!". 

The Ministry of Justice (MoJ), who regulate claims companies, have reviewed these claims resulting in an official crackdown on misleading adverts and companies.

The Office of Fair Trading (OFT) have stated that they will not hesitate to take enforcement action against businesses who engage in unfair business practices by deliberately misleading vulnerable consumers about the services they offer.

If you have been contacted by one of these companies it is vital that you contact your personal account manager to obtain an honest opinion on your current situation.  Promises that are too good to be true are often just that.

However, if you think you have been sold PPI on either a loan or credit card or have experienced any charges on your credit card you may have a legitimate claim that Debt Advisory Lines sister company, Investor Compensation, regulated by the Ministry of Justice with a valid Consumer Credit Licence may be able to help you with.  They work on a no win, no fee basis and could successfully claim £000’s in compensation for you, and most importantly without jeopardising your Debt Management Plan.

If you would like to discuss any concerns you about companies making these claims or have any questions about your debt management plan or Individual Voluntary Arrangement please contact your Personal Account Manager. If you think you have a valid claim against mis sold PPI or want to reclaim any credit card charges going back 6 years please contact our dedicated team on 0800 6888 666

Prices in December were 1.1% higher on an annual basis, marking the first rise since March 2008, shows the latest Halifax House Price Index.

Prices increased for the sixth successive month with December’s rise slightly below the average for the preceding five months - 1.2%. 

Prices in the final three months of 2009 were 3.5% higher than in Q3.  This is the biggest quarterly increase since 2006 Q4 - 4.2%.

Prices have increased by 9.4% since reaching a low in April 2009; an increase in the average price of £14,552 over this period. This follows a decline of 23% between August 2007 and April 2009. The average house price is now £169,042. House prices in December were 1.1% higher on an annual basis. This is the first increase in the annual rate of change - measured by the average for the latest three months against the same period a year earlier - since March 2008. The annual rate has turned around markedly from a low of -17.7% in April. 

Low mortgage rates have reduced the burden of servicing mortgage debt. Monthly repayments accounted for an estimated 23% of average gross household income in December 2009 for existing mortgage borrowers. The proportion of income devoted to mortgage repayments over the past few months has been the lowest since 2005 and compares with a peak of 27% in October 2008. This improvement in affordability has also helped to boost housing demand.

David Bagshaw managing Director of Financial Advisory Line writes: House prices increased for the sixth consecutive month in December. The 1.0% rise between November and December was slightly below the average increase over the previous five months. Prices increased for the second successive quarter following falls in both the first two quarters of 2009. Prices in December were 1.1% higher on an annual basis, marking the first rise since March 2008. House prices have risen by 9.4% since reaching a low in April 2009.

The significant cut in interest rates following the worldwide financial upheaval in the autumn of 2008 has markedly reduced the burden of servicing a mortgage for many households. This has helped to stimulate housing demand, albeit from a low base.

The recent improvement in the labour market, highlighted by increasing numbers of people in employment in both September and October, has also supported housing demand.

The prospects for the market this year will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our current view is that house prices will be flat during 2010, which will at the very least bring some stability to the market prior to the General Election, as such clients should consider at this time the long term benefits of switching lenders to a fixed rate Mortgage and the long term benefits that this would bring to the household.

January 18th 2010, dubbed ‘Blue Monday’ is known as the most depressing day of the year – that fateful day when Christmas overspending threatens to catch up with you.  The final full week of January is when the culmination of Christmas debts, broken new year resolutons, the return to work after the festive break and the extreme bad weather, combine to create a day of misery for many of us.

Debt Advisory Line, which has been awarded the title of Debt Management Plan Provider of the Year 2008 & 2009, experiences a 40% increase in calls to its debt advice centre in January with many customers being motivated to call because of the misery of impending bills in the New Year.  Mike Ransom of Debt Advisory Line explains how the amount of desperate people contacting the company soars at this time of year. He said: “The day, coined according to a formula devised by happiness and motivation expert, Cliff Arnall definitely has firm foundations with many financial aspects behind its identification.”

“December is one of the biggest spending months leading to a tough January for most of us.  This combined with the increase of home utility bills due to the extreme weather conditions equals bad news for people struggling to keep up with regular direct debits and overdue credit card or loan repayments.”

Debt Advisory Line is offering some simple money saving advice to help people take stock of the situation before its too late and crucial payments are missed.

• Create a monthly budget that gives you a realistic amount which must include necessities like food, essential utility bills and general living costs.  

• It is important you maintain all payments, but there are certain priority debts that have bigger implications if you don’t pay them for example mortgage/rent, secured loans, utilities, child maintenance etc. if you don’t make these repayments, you could face losing your home or having your gas, electricity or water supply cut off.

• If you are struggling to pay your priority debts because you are paying non priority debts (unsecured loans, credit / store cards, catalogues, mobile phones, overdrafts) you need to change your focus so priority debts get paid.

• Retain receipts and at the end of the month, totalling what you’ve spent. Then mark off essential buys and impact purchases. This will highlight weaknesses and it may be possible to returning some goods.

• With freezing weather heating and water bills are likely to increase. Try taking quick hot showers rather than hot, deep baths and wear an extra layer to bed rather than sleeping with the heating on. Another invaluable tip is to set your heater on a strict timer.

• Spread the cost of bills rather than them all arriving at once and if possible pay all your bills by direct debit.

• Money can be saved by planning your menu – try making bulk meals at the beginning of the week and using ingredients for several dishes to add variation.  These can also be frozen to help time pressures throughout the week and avoid the temptation to rely on expensive ready meals and extortionate takeaways.

• If, even after changing your focus and trying to budget more effectively, you are still struggling to make your monthly payments then a different solution is needed.  Debt solutions are available in the form of Debt Management Plans, Individual Voluntary Arrangements (IVAs), Protected Trust Deeds (PTDs) in Scotland and in extreme circumstances Bankruptcy.

See www.debtadvisoryline.co.uk 

A Staggering one million UK households have used a credit card to pay their mortgage or rent during the last twelve months according to a new report from the housing charity Shelter.

Shelter's Director of Policy and Campaigns, Kay Boycott said: ""If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer."

Craig Gedey, Group Marketing Manager for The Debt Advisory Line commented: "The one million UK households equates to around 6 per cent of all UK homes. People should be aware that although a credit card is an unsecured debt more and more lenders are approaching the courts in order to have what is called a charging order secured against the borrowers property."

"A charging order secures any unsecured debt against the borrowers property, which means that ultimately people could end up loosing their homes."

The Debt Advisory Line encourage anyone experiencing utility bill, credit card, overdraft, or unsecured loan related debt problems to take a look at their web site at www.debtadvisoryline.co.uk to learn more about debt management and the various solutions available. Alternatively, they can call for free advice on 0800 157 7254.