debts getting out of control

UK households are facing an increasing challenging financial situation after a study published today revealed that more than one in three people are worried about the uncertainty of Britain’s current economy and 15.3 million consumers feel they are in a financially poor situation.

The report by uSwitch.co.uk has shown that the average person in the UK now sees over half (53 per cent) of their monthly take home pay eaten up in debt repayments while 35 per cent goes straight out to cover mortgage payments and 18 per cent get consumed by other debts.

Consumer confidence is crumbling as the reality of the ‘credit crunch’ starts to bite particularly in the wake of the Northern Rock fallout coupled with interest rate uncertainty and a slowing property sector.

Now 15 million people claim to feel financially worse off than ever before which is having a knock-on effect on people’s aspirations. More than half of consumers say that now is not the time to make life-changing decisions such as making a career change, getting on the property ladder or starting a family.

living beyond our means

The credit crunch has started & yet it appears according to Uswitch the online comparison website, one in ten of us are living beyond our means. The website claims that a fifth of adults have no money spare at the end of the month.

   People living beyond their means often rely on overdraft and/or credit cards to make up the shortfall.

The average income is £2,607 each month of which £1,229 is spent towards essential items. Debt repayments on average are well over £300 and Non essential items use on average £865 per month. The average consumer had just £157 left by the end of each month.

Some customers could help lower monthly repayments by switching to a 0% balance transfer credit card or a personal loan. If you are living beyond your means, debt management could also be a solution to help make things easier.

when debts take over

   

If you’re in debt, it’s time to face up to it. Denial is the worst thing you can do. Priority debts are the most important debts to repay because your creditors can take the strongest legal action against you: priority debts include mortgage, rent arrears, income tax/VAT, fines, council tax, maintenance, utilities and car hire purchases. Deal with these first.
When debts start to take over (one or more of these may apply)

- You are in arrears with at least two lenders
- Some of your accounts are handled by debt collectors
- You have been threatened with court action
- You make promises to pay that you can’t keep
- You may even have judgments already
- Your family relationships are affected
- You avoid opening any bill that arrives in the post
- You are very worried
- You are losing sleep, weight and friends
- You are thinking of emigrating/doing a runner

 Get help now -

Home Owners and Tenants - Got Debts? Get Debt Free - Click here for more information

You can’t be imprisoned for not paying non-priority debts which include credit/store card arrears, catalogue arrears, bank overdrafts and loans, hire purchase on televisions, and so on, money borrowed from family or friends. But if you continue to refuse to pay your creditors they can get a court order allowing them to send the bailiffs in.

Therefore it’s better to get some advice and sort out any debts which are currently in arrears. Remember, by sorting out your debts you will stop the harrasment of creditors calling or visiting you at home or place of work. You can arrange the advice for free by visiting your local Citizen advice. A website we believe will be of interest to you is debtadvicebureau.org.uk you will find a free debt advisory information service providing you with advice and solutions to help you deal with your debt and credit problems.