More bad news for people struggling with debt problems in the UK comes in the form of a recent report. Findings from the British Bankers Association have revealed that Britons owe high street banks £52 billion in debts from personal loans.  The total amount of new loans taken out in February was £1.3 billion, £100m higher than the previous month.

This of course will come as no surprise to us all; however I am surprised that lenders are willing to lend such amounts of money whilst there is a high risk that the borrower will be unable to keep up with the repayments and as in most cases will end up paying off the interest each month and be forced to seek debt help advice or debt management.

The BBA believe the increase may be linked to Britons borrowing money to take advantage of the government’s car scrappage scheme. However as I remember the scheme was introduced to encourage consumers to buy new cars in order to help boost the economy. On the plus side, the new findings also revealed that overdraft debts decreased last month by £200 million, with the net figure now standing at £9.3bn.

I believe that the increase in UK borrowing will encourage borrowers to try and sort out their debts in a more effective way through debt management, which will enable them to pay off their existing personal loans and credit card debts without having to take more credit from high interest lenders as the high street banks are being more careful with who they lend to.

These days going to University and getting a degree is almost a necessity to get any decent job in the current UK job market. When we think about going to University, we think of the fun times we will have living away from home, meeting new people, enjoying new experiences and increasing our chances of securing a well paid job and a brighter future. We fail to foresee the amount of debt we will owe at the end of it all including the student loan, credit card debts and overdrafts. Therefore it comes as no surprise to hear that recent research has discovered that 40 per cent of students are worried about debt problems.

According to the Sodexo 2010 University Lifestyle Survey, published in accordance with Times Higher Education, half of all full time UK Undergraduates expect to graduate with £15,000 of debt, with 28 per cent set to clock up debts of more than £20,000.  These new figures are of no surprise to me, as I am increasingly receiving calls on our debt help line from recent graduates who are struggling to find work due to the increasing unemployment levels and therefore do not have enough money to pay off their credit card debts and any debt consolidation loans.  

Lenders prey on students, as soon as you register for a student account the credit card offers will start pouring the through the letter box and into your junk box as they know that credit cards are often the only way students can survive during their University years. They are away from home and having to deal with a new student lifestyle, needing money to buy clothes, books, equipment and paying to travel to and from home.

My advice to any graduate who is suffering with debt problems and seeking financial debt help is to stay clear of taking out any further credit, as this will only get you further into debt. You are best off going to a professional debt management company who will be able to offer free professional advice on debt and explain the debt solutions available to you. In most cases a debt management program is the best solution as it is an informal arrangement which means you can increase or decrease payment into the plan at any time. Therefore when graduates do find a job they can afford to pay more into the plan and get their debts paid off quicker.

Credit card debts continue to be the most common form of debts that consumers continue to struggle with and seek debt help advice on. This is most commonly due to the high interest rates and the increasing credit limits which encourage consumers to spend beyond their limits. The government has identified this problem and has announced new rights for credit card users, which will apparently save consumers millions of pounds and give them more financial control.

This is excellent news for consumers with credit card debts who seek advice on credit card debt reduction. The new rights will be implemented this year as soon as possible and the government estimates this will save consumers almost 300 million pounds a year. Gordon Brown said ‘These new rights will put an end to the irresponsible lending practices that people have been most concerned about, and help cut the cost of borrowing’.

The new rights will mean that consumers with credit card debts will pay the most expensive debt first, reversing the current practice. As well as this consumers will now be able to choose not to receive credit limit increases and the right to reduce their limit at anytime. They will be given more time to reject increases in their interest rate or their credit limit. This will help to cut and reduce consumer overspending on credit card debts.

There is also good news for consumers who are seeking debt help advice on taking out future credit, as there will be a new annual statement that will be sent out to consumers seeking credit card debt advice which will allow them to conduct an easy cost comparison with other providers.

Consumers seeking advice on debt through debt management, will welcome the ban on credit limit increases and rises in interest rates to protect people at risk of financial difficulties. The new rights can only be a good thing for consumers with credit card debts, let’s just hope that the government can implement these changes efficiently  and effectively in order to have the best possible impact on credit card users.

The recession has had an effect on everyone but it seems that families on low incomes have been hit the hardest. Households earning between £13,500 and £25,800 a year spend 41% of their income on essentials such as food and fuel, which have risen considerably in price. Due to the rise in essential expenditure and no change in the household income or in many cases a drop in household income, many people who fall within the low income category are finding it increasingly difficult to keep up with the repayments on their unsecured and secured debts and are seeking debt help advice.

In many cases people who fall within the low income category are facing debt problems for the first time, they may have been in a job with a salary that allowed them to comfortably be able to afford their credit card debts and essential expenditure without struggling but due to redundancy, a pay cut or a loss of hours they are no longer able to keep up with the repayments but don’t know what to do as they have never had to face debt problems before.

At first people in this situation may put sorting out their unsecured debts and seeking advice on debt as last on their list of priorities and just concentrate on being able to afford their essential expenditure, leisure activities or unnecessary clothing because this is the lifestyle they have become accustomed to and find it hard to accept they are no longer able to afford such luxuries.

The best thing to do rather than jumping in at the deep end and thinking your only option is to go bankrupt, is to seek debt help online or advice on debt through a free debt help line who will be able to talk you through the options available and recommend the best route out of debt as well as offer debt management help. Through a debt management plan your income and expenditure will be taken into consideration when determining what disposable income is available to pay towards your creditors. This will ensure that you are able to afford your essential expenditure, as well as repayments on your unsecured debts.

Can you afford to go bankrupt? You may think this is an odd question but many borrowers are unaware that you have to pay to be declared bankrupt, not only that but bankruptcy fees are increasing despite there being no increase in the cost of administering bankruptcy. So if you’re credit card debts are mounting up and you are thinking if it all goes pear shaped I can just file for bankruptcy it may not be as simple as you originally thought and may take you a while to afford the bankruptcy fees itself.

The government has announced that the cost of bankruptcy will increase in April and is raising its fees by £90. From the 6^th April the cost of bankruptcy will rise from £360 to £450, as well as an additional court fee of £150 which will be waived for those on benefits but overall the cost of bankruptcy will be at an all time high of £600. This is far from good news for those borrowers who are severely stressed and unable to afford to pay anything at all towards their credit card debts and are seeking credit card debt relief in the form of credit card debt bankruptcy.

The new increase in bankruptcy fees will force borrowers to seek debt advice on alternative debt solutions such as a debt management plan or a debt relief order.  On a positive note these solutions don’t have the same negative stigma as bankruptcy and in most cases a debt management plan can help a borrower to achieve credit card debt relief and put them back on the straight and narrow, as creditors will see that the borrower is willing to attempt to pay their debts back and are actively seeking credit card debt management help.  

The best thing to do is to call a free debt helpline where you can get free professional advice on the debt solutions available, then weigh up your options and choose the most cost effective solution to suit your circumstances; bankruptcy should only be your last option.

It is no secret that debt in the UK is a major problem, according to Credit Action the UK personal debt at the end of December 2009 stood at £1,460 billion. As a result of this advice on debt is becoming more available to those who have the confidence to face up to their debt and admit they need debt help advice.

However despite the debt help line available consumers are still shying away from facing up to their debt, afraid to open the red letter bills that fall through the letterbox and even reluctant to tell loved ones and friends, or in most cases are in denial that they have a debt problem at all due to the stigma of debt. Shying away from debt problems can only makes matters worse and can often result in debts being passed on to collection agencies, CCJ’s and charging orders.

A popular way of seeking debt help advice is through a debt management company who are able to offer debt help management and relieve the stress of having to deal with creditors directly. A debt management company will deal directly with the creditors and collection agencies including all telephone calls and correspondence.

Debt Plan Direct offer consumers a tailored debt help management service to suit individual needs and offer free professional advice on debt. Our professional and friendly staff can talk through your debt problems with you and advise you of the best solution to meet your circumstances.

Debt help is out there and readily available it’s just up to you to pick up the phone and call the debt help line. According to credit action 43 % of people in the UK are too scared to take action, don’t let yourself be part of that 43% stand up to debt and face it head on, it is the only way.

It can be hard to get out of debt once you have found yourself buried deep in a financial crisis. You need to prioritise what you can do to help yourself before the situation gets any worse.The first thing to do is assess your situation. Work out who’s charging what, how much interest you are being charged, and who should be getting how much. Sit down with all of your bills and calculate what you owe and what your ongoing expenses are likely to be. Get a copy of your credit report and analyse it carefully to make sure its correct.

Next look at why you are spending. Have you been unhappy and felt like buying a new outfit? If so, this is due to emotional spending. But, if you’re short because you had to buy your weekly groceries, then that is practical spending. Knowing the difference between the two could help you manage your debt quicker.You will be able to create a budget once you know your situation and why you are in that situation. Work out how much you spend on a monthly basis, and an amount of money that you will need for everyday life. 

Cutting out your expenses is a simple concept but so hard to follow. 

If you really can’t seem to get out of debt following the above steps, speak to a debt advisor who can help you. 

The Pros & Cons

Consolidating all your debts can reduce both the interest and the amount you are paying each month It can also make your debt much easier to manage. This may also mean it will take longer for your debt to be repayed, which could cost you more in the long term.

Present Market Situation

We can never be sure what the economy status will be like for the future, or even what your own financial situation will be for that matter. You may be able to afford your repayments today, but maybe not tomorrow if your salary decreases. Who knows you may change job roles and end up with a larger salary which means you can pay all your debts off even quicker. In the long run, consolidating your debts could free up the cash you need to bring your expenditure back in line with your income.

In a Credit Crunch

Today’s credit markets might make debt consolidation loans a bit less attractive than they were before. Lenders are having to pay more for the money they borrow, which means they have to charge more in return.

The Alternatives

You can consider other options for solving your debt. For example, a a debt management plan or an IVA. It’s important to speak to a debt adviser who can help you understand what’s right for your situation.

Recent research by Unbiased carried out suggests that the average UK consumer will need to work 70 days to cover the interest alone on their debts for 2008.

The numbers of consumers looking for debt help and advice has again increased this year showing that there is trouble ahead for UK consumers due to personal debt levels increasing over the last 10 to 15 years.

The 70 days consumers will need to work to pay off the interest on their personal debt levels is an increase from 44 days last year – showing the increase in the total UK personal debt levels.

The  Chief Executive, David Elm stated: “In the current economic client is has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so.”

Further research conducted by Credit Action, at the end of January showed that the average UK consumer owed £4,748 in loans, overdrafts and credit card bills.

A new initiative launched by the government to help educate individuals in the UK about their personal finances has been officially launched in the London.

The new personal finance programme called ‘Programme in Personal Financial Planning’ available at the ifs School of Finance has been welcomed by politicians.  The new education programme has been earmarked by a ceremony at the House of Commons.

The aim of the programme is to educate and help individuals who are struggling with their personal debts and free them from the burden of debt; in addition to educating people to avoid future financial problems. The organizers of the personal finance programme hope it will be avialbe throughout the UK in adult education centres.

Noorjahan Rashid, from Tower Hamlets in London commented: “I have only been taking this course for four weeks but have found it life changing.”

“I know about mortgages and interest rates and all sorts of financial things…it’s really given me confidence,” she added.

Many pf the UK’s indebted consumers could have been disappointed recently as the Bank of England opted not top reduce the cost of borrowing.