More than a million people are on the brink of serious debt difficulties

HenryWeston

More than a million people are on the brink of serious debt difficulties even before the increase in interest rates the Bank of England is expected to announce next week. The Bank's most recent Financial Stability Report estimated that Britain's personal debts have reached £1,300bn - or £1.3 trillion - making huge numbers of people vulnerable to an economic downturn.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/05/cmdebt05.xml scary :-/

ZTD

It actually a pretty good article

Ms Miller added: "If people have debt problems, there is nothing to be gained from delay. We cannot stress enough the importance of telling your creditors as soon as you have difficulties in paying - they should treat you sympathetically.

Notice, she doesn't still her neck out and say "will" rather than "should"...

."The main sources of free expert help on tackling debt are the CAB, the CCCS and National Debtline. Several other companies now advertise debt advice but people should beware of hidden costs.

Malcolm Hurlston, chairman of the charity Credit Action, explained: "If you are in debt you want to pay off your creditors as quickly as possible. However, these firms will generally take their fees out of any money you have available to pay creditors before passing the balance on.

"That means it will take even longer to clear what you owe. Why pay for what you can get for free?"

In response, Matthew Cheetham, chief executive officer at All Clear Finance, said: "The most important thing for customers is to receive timely, appropriate and impartial advice.

"While some organisations offer their services for free, we believe those that do make a charge for their services - like ourselves - are able to offer a higher level of service.

And then the boot goes in:

"It is worth noting that many organisations offering their services for free are funded by the very banks to whom customers may owe money."

Hilarious.

ManAtHome

The "oldies" are either in more difficulty or maybe more realistic about it? http://news.bbc.co.uk/1/hi/business/6620035.stm

Garnet_Gem

A lot of people must be very worried now. The banks and credit indusrties can't let everyone off the hook with an understanding nod (if they ever did) so a lot of homes will be up for sale if interest rates keep rising.

ZTD

And in this, the BoE are complaining about the money supply increasing so much. I said ages ago that they were wasting their time using interest rates when the money supply was expanding so much, and that they were just being set-up to take the blame for the next recession.

Looks like they've finally realised... :doh:

Conor_3

Garnet_Gem wrote: »

A lot of people must be very worried now. The banks and credit indusrties can't let everyone off the hook with an understanding nod (if they ever did) so a lot of homes will be up for sale if interest rates keep rising.

I've been putting money away for this happening. Going to be some very cheap houses about.

No doubt everyone will be blaming everybody but themselves for getting up to their eyeballs. It makes me laugh when they go on about irresponsible lending. Surely nobody was holding a gun to their heads when they signed up for the loan?

ZTD

Conor wrote: »

It makes me laugh when they go on about irresponsible lending. Surely nobody was holding a gun to their heads when they signed up for the loan?

It's rather unfortunate to laugh at other people's misfortune. What do you think about those that lost their pensions? After all, no one held a gun to their heads either.

Pobby

Well come on,this was bound to happen.A whole bunch of circumstances have come together to create the situation we are arriving at.Interest rates at historical lows.High employment if you believe what you are told,the``miracale economy``(I remember Old Mother Thatch and her ``economic revolution`` and its final collapse}.All a bunch of spin that many are sucked into.Very low interest rates,``affordability``goes up,people over commit and then the economy takes a downward cycle.Gordie saying that he had brought an end to boom and bust sounded like Cannute thinking he was so great that he could stop the tide from coming in.It is the nature of capitalism that you will get ``market corrections``.I have been in business for many years and seen the peaks and the troughs.

Many fortunate to have equity ripped it out to buy plasma tvs,good holidays and all the other gee gaws on offer.Why not?They were being told that they were getting rich because of the rise in their properties.Now that surprises me somewhat that these borrowers failed to realise that this wasn`t ``free`` money.All they were doing was using their property to secure debt.IT HAS TO BE PAID BACK!

Pensions,and don`t I know it ,have taken a big nose dive.This has brought about the buy to let brigade.Armed with little or no money they have jumped into this ponzie scheme,certainly encouraged by the lenders.Some of these will be the first to be hit as interest start to rise.I feel very sorry for those who live in property owned by these people.It can`t feek secure.Blairs government ha sbeen born along by cheap borrowing and rising house prices.Maybe now the party is drawing to a close.No more cheap money.

ManAtHome

Not just cheap money - we've also had the "China effect" and the "Internet effect" lowering prices, and the "Poles effect" lowering wages and some service costs. All of these seem to have bottomed out - costs and inflation won;t drop as easily again.

Pobby wrote: »

like Cannute thinking he was so great that he could stop the tide from coming in.

<Pedant=on>
Canute actually did that to prove to the Court that he wasn't capable of engineering a miracle economy... lol
<Pedant=off,parm=fornow>

Pobby

Well I could have gone on and on about it but thought I might get boring ---lol.But yea,you are right about these different dynamics all playing a part.

oscar52

Its still suprising even talking to people in work(in finance) who think house prices will either keep rising or level off. If people in finance close their eyes to it and ignore it what hope have others got - trust in their bank?!!

Prices are bound to fall - interest rates need to rise to keep down inflation and bring the economy back under control - there is also the matter of the dollar being highest just about ever and the rising euro.

I just feel sorry for all those that will end up losing money due to the very poor advice they may have recieved