British Families and Debt

There is current concern from the Bank of England that British families are getting deeper into debt, however, it has been said that lenders are putting themselves at risk because people are now more willing to make themselves bankrupt.

Despite people already having significant amounts of debt, credit card companies are still prepared to lend these people money. This is a combination of a creditor not knowing the full picture of a persons financial commitments and employees of credit card companies being under pressure to sell credit cards and insurances policies to earn bonuses.

People will receive random telephone calls from companies who will try to sell the benefits of their cards and use the selling point of lower rates plus the option to transfer the balance from their current credit card at a lower rate.

Many people who receive these calls may already be in some kind of debt. There possibly will be some who are currently looking for solutions to their debt problems, and the temptation of obtaining a new card thereby having more spending power could prove hard to resist.

The Bank of England has every right to be concerned about the financial state of this country, but possibly the lending system needs to change to make it more difficult to obtain credit.

Lending companies blame the debtor, and the debtor blames the lending companies but who will stand up and make a difference when it comes to the huge family debts the UK are currently experiencing?

We have already been made aware that borrowing in the UK has crashed through the 1 Trillion pound barrier, but surely this should provoke concern rather than just being a headline in a newspaper.

The Government are concerned with raising financial awareness, however, what restrictions do the lending companies have? We know that a new Bill is currently in motion, which was first mentioned in the Queens Speech back in November 2004 and is set to come into effect in mid-2006. This bill will give creditors more rights over debtors rather than placing any restrictions on how creditors lend money.

Yet another case of suicide due to debt is circling the Internet. 43-year-old Mark McDonald's body was found on a railway near his home, with him was his rucksack containing 80 letters from his creditors regarding monies he owed which mounted up to £65,000. Mr McDonald is now the 5th known person who has taken his life due to debt in the last 2 years. Others include a 21-year-old farm worker who owed £10,500 and a 65-year-old grandad who owed £135,000.

If people were more aware of the free financial help that is available, perhaps they would realise that borrowing more money to pay off current debts is not the way to ease their financial situation. Debt Management Companies such as Payplan (http://www.payplan.com) offer free financial assessments and Debt Management programs which work around peoples current incomes to find the best solutions to debt problems, it is hardly ever necessary to borrow more money to resolve financial difficulties.

Perhaps there should be a system in place, which allows a lender to see whether or not a person can afford either a loan or a credit card before making a decision whether to lend money.

Creditors currently say that they will only lend money if the applicant meets their criteria. However, if people are still able to borrow money when they cannot afford to pay it back, then the criteria fails to give a true representation of whether or not the applicant is able to repay.

Information supplied through the credit reference agencies do not show the full picture to a lender when making a decision to lend money, either that, or the credit companies are not taking full advantage of the information provided.

Some lending companies will lend you without question half of your annual income, not taking into account what you already owe.

These are the things that need to be addressed when lending money. Both lenders and borrowers alike are responsible; therefore, tighter restrictions need to be applied on both sides.

We can only rely on the Government to recognise the problem, and do something to resolve the current state of lending and borrowing in this country. Debt in the UK crashing through the 1 Trillion pound barrier is not something to be proud of; it is something that needs to be addressed now!

Nicola Bullimore has been working with people regarding debt issues for a number of years. For more information, please visit Debt Questions website

---

Debt Elimination

If you're reading this article right now I'm sure that... Read More

Repair Bad Credit Yourself

In March 2005, the U.S. financial services industry succeeded in... Read More

Learn How to Get out of Debt

Debt is becoming number one problem in the United States... Read More

Questions to Ask a Credit Counseling Service about Debt Relief

Debt relief is a topic on a lot of consumers'... Read More

Bank Like a Banker

The business of banking has changed dramatically over the last... Read More

Reduce Your Debt

Do you want to reduce your debt? Having trouble paying... Read More

Bankruptcy: What the New Law Means to You

On April 20 of this year, President Bush signed a... Read More

Do It Yourself Debt Relief

With mounting bills and unforeseen hardships, you may be considering... Read More

The Effects of Consumer Debt

Consumer Borrowing Consumer borrowing in the UK has now crashed... Read More

How Do You Spell Debt Relief?

Of all the problems possible in a marriage, finances cause... Read More

Eliminate Your Credit Card Debt, But How?

Can a debt consolidation loan eliminate your credit card debt?... Read More

Five Hot Tips To Get Out Of Debt Forever

The financial and psychological burden of being in debt causes... Read More

Budgeting and Debt Management

Debt management (specifically unsecured) is the first step to taking... Read More

Slowing Spending - The Key To Your Debt Plans Success

Anyone who embarks on a debt reduction program should know... Read More

Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

Do you have stacks of unpaid bills?Are you in debt?Are... Read More

Get Debt Free

If you once have been caught in the debt trap,... Read More

Utah, the Nation?s Bankruptcy Capital

Congress recently passed the Bankruptcy Abuse Prevention and Consumer Protection... Read More

Debt Collectors: Men or Mice?

Who are these people anyway? They viciously harass you and... Read More

Debt Elimination 1

If you have multiple debts, you may well be wishing... Read More

Credit Card Debt Freedom is Possible

Credit card debt have you drowning financially? You're not alone.... Read More

What Are The Benefits and Consequences Of Getting Rid Of Debt The Easy Way

We have all experienced getting so far in debt we... Read More

British Families and Debt

There is current concern from the Bank of England that... Read More

Is Independence Overrated?

Happy Independence Day from The Money Motivator!If you don't celebrate... Read More

How To Pay Credit Card Debt Off

If you are determined to pay credit card debt off... Read More

Debt: Dont Pay Your Minimum Balance

Almost all Americans carry credit card debt. Actually, over 40%... Read More

The Debt Free Lifestyle

Many people have been taught that you cannot get ahead... Read More

Debt Validation: Do you have to pay ?

It happens all the time. Debt collectors try to collect... Read More

The ONE Law You Should Be Breaking

There is a law all smart people break.Parkinson's law.Parkinson's law... Read More

Debt and Financial Optimism in the UK Continue

With £1.3 trillion pounds worth of debt in the UK,... Read More

IVA Advice

An IVA (individual voluntary arrangement) is an alternative to bankruptcy... Read More

Eight Ways to Consolidate Debt

Next to winning the lottery, a debt consolidation loan is... Read More

The Bankruptcy Code Acknowledges the Validity of the Homestead Exemption

Many times the subject of bankruptcy seems baffling in its... Read More

Credit Counseling or Bankruptcy: Which is Best for You?

People often get to a place where they simply can't... Read More