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Types of Debt

Debt can sometimes be necessary in order to take that next step in life such as getting a mortgage or buying a car. These types of debt can be classed as healthy debt as it is planned and to the most extent affordable.

Where we can run into issue is when debt starts to become unhealthy, unmanageable & unpayable come the end of the month.  Each type of debt comes with their own conditions it must be paid back under as well as the interest rates associated.

We suggest that if possible pay your important debts first but if you are struggling to cover these then check below and find tips on how best of deal with different types of debt. If you are struggling to get by each month and feel overwhelmed with debts give one of our staff a call today and we will find the best solution for you.

As a business owner you can often fall victim to cash flow problems that place a strain on the finances of your business.  Many businesses in the early years of operations can face debt issues when sales or payments slow down.  This can result in losing control of your finances and falling into debt.

Even though your business has the potential to trade successfully there could be a serious risk that you could be declared bankrupt.

Our advisors can work with you to find the best possible debt solutions for you and your business.   Together we can find a solution that eases your debt worries and allows you to continue trading.

Simply fill in the contact form on this page or give us a call.  The advice we give is impartial and confidential.

Using a credit card is a simple way to pay for the things you need.  But they are also a very easy way of building up your outstanding debts if you do not manage them effectively.

There are several card types that you may have used, each has pros and cons and different rules that apply:

Credit Cards

Credit cards are a form of borrowing, and if you have one of these you will have completed an application form in order to get it.   When you apply for a credit card you will have agreed to the terms and conditions that apply to that card.   Each card will have a spending limit and a minimum monthly repayment.  Some cards also charge a fee.

You should always be aware of the interest level that is charged on any credit card that you have, as these can increase depending on the agreement you have.  If you keep a balance on a credit card, this will generate interest payments that will be added to your debt, and this will be paid on a monthly basis.

If you use a credit card to withdraw cash, you will probably be charged a fee plus a higher interest rate.  Credit cards are not recommended as a source of cash for this reason.

Debit Cards

Debit cards are associated with your bank account, and when you use a debit card to make a payment or to withdraw cash, the money is taken directly from your bank account.  Unlike a credit card, there is not usually a charge for using your debit card.   You will be charged for using a debit card if you attempt to make a payment when you do not have sufficient funds in your bank account.  This will result in your card being declined and the bank charging you an admin fee.

Store Cards

Store cards are very similar to credit cards, and you must fill in an application form and undergo credit checks to qualify for one.  Store cards are issued by retailers usually with an introductory discount offer that makes them an attractive way to pay for things.  After this initial offer period finishes, the interest rates and charges may increase, so it is important to keep an eye on any changes to a store card account.  Most store cards have a much higher interest rate than credit cards do, which makes them an expensive form of borrowing.

Why you can get in debt with a credit card?

The way that credit card companies make money is to charge interest for the amount you borrow.  The more you spend – the more interest will be charged.   If you do not pay off your balance each month, this will mean that the interest charges will continue to mount up over time.   What’s more there could be additional fees if you overspend your limit, or you miss payments.  This combination can quickly create a credit card debt problem.

Late payments could also affect your credit rating and make it lower.  This will make it more difficult for you to get other sources of credit in the future.  The best way to deal with credit card debt is to pay off as much as you can afford each month in order to reduce your payments.  If you are struggling to even make a minimum payment on a credit card, it’s time to contact Creditfix and talk to one of our trained advisers.

Call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

Your council tax bill should be seen as one of your priorities to pay.  As any missed payments will mount up and will usually need to be settled in the same financial year.

Council tax can either be paid in a lump sum for the entire year, or spread across the year in smaller payments.   If you choose to pay monthly and miss a council tax payment, you will receive a reminder from your local authority.  This will give you seven days to pay the missing installment.  If you don’t pay within this time, you will be asked to pay all outstanding council tax within a further 7 days.  If you do not pay within this time, the council will probably take legal action to get payment of the amount you owe.

At this stage the council does have the power to pay for any unpaid council tax direct from your employer.  Deductions will be taken direct from your salary. If you still don’t pay the council can get your employer to pay your unpaid council tax direct from your wages. Even if you are receiving benefits, local councils can deduct money from them to pay any outstanding amounts.

There are some ways to reduce the amount of council tax that you pay; if you are disabled, live alone or have a low income, it is worth checking if you qualify to pay less council tax.  For more information on council tax reduced payments please visit www.gov.uk/council-tax-reduction.

The worst case for non payment of council tax could be a prison sentence.  You can be sent to prison for up to 3 months if the court decides you don’t have a good reason to not pay your Council Tax and you refuse to do so.   This is an extreme circumstance and as long as you cooperate with the council and make some attempt to pay you should be able to make a valid defence against imprisonment.

In cases where no payments have been made, councils are likely to send in bailiffs to gather your possessions for sale in order to settle the debts.  Bailiffs must gain legal and peaceful access to your home prior to seizing your possessions with a view to selling them.  If a bailiff is visiting you for the first time, you are not obliged to let them in.

Bailiffs work on behalf of the council and if you contact the council to settle the debt, they will be able to stand them down.

If you’re struggling with council tax debt call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

Mainstream Gambling

Gambling is not the seedy pastime that it once was.  It has become mainstream now and is available on mobile phones, online and through scratch cards to name a few.  Whilst the odd punt on a race or putting some change in a fruit machine is harmless, there is a darker side to gambling.  It can become addictive and start to have a massive impact on your life if you start to spend more then you can afford.

How can gambling put you in debt?

It is often a knock-on effect that causes people to struggle with gambling debts.  Using a credit card or other borrowing to fund gambling is a very dangerous game.  The minute you lose, you will not only lose the money that you have gambled, but you will also be paying interest on the money that you have borrowed. This can then become a vicious circle – gambling drives you to borrow money, and get into debt which leads to gambling a bit more in order to try and pay off the debt.

If you or someone you know is struggling with a gambling addiction, the first thing to do is to seek help.  In the UK there are organisations such as Gamcare http://www.gamcare.org.uk/ or Gambler’s Anonymous http://www.gamblersanonymous.org.uk/.  Both organisations will give you the help and advice you need to dealing with your issues.

Even if gambling has contributed to your debt problems, here at Creditfix we want to work with you to find a way out of your current situation.  We won’t judge you, but we will give you practical help and support, and advice on the best debt solution.

Call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

Everyone in the UK has to pay Income Tax if their income is over a certain amount.  If you are in employment you will pay directly through your employer, if you are self employed, then you must complete a self assessment tax form that will reveal how much tax you should be paying.

Self Assessment

If you are self-employed then your self assessment form has to be provided to the tax office (HMRC) by the 31st January following the end of the tax year.  You can usually submit this form online once you have registered on the government gateway.

When you have completed the self-assessment, HMRC will inform you how much tax you owe for that financial year – or if you are due for a tax rebate. It is very important that you contact HMRC quickly if you are not able to pay any tax that you owe.  If you don’t’ then you may be liable for penalty charges or having your debt passed on to a debt collector.

Consequences

HMRC can also use debt collectors to chase any tax amounts outstanding.  If the debt is less than £2000 and is less than a year old, they may also pursue you through the Magistrates court.

Failing to act quickly will not only incur additional penalties but HMRC may do any of the following…

The debt may be passed on to one of HMRC’s preferred debt collectors who will chase you for the outstanding amount.  In other circumstances they could petition for your bankruptcy or seek to raise a County Court Judgment against you.

If you have received your tax bill and are struggling to make payments it is worth contacting Creditfix.

Call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

You can secure a loan against your vehicle’s logbook (also known as a Vehicle Registration Certificate or V5C). to do this you will be required to hand over your logbook to the loan provider until the loan is paid off.  In most instances you will still be able to use the car during the period of the loan.

Circumstances

Logbook loans can be very expensive with very high interest rates of up to 450%.  They also put your vehicle at risk as the lender technically owns it until the loan is paid off.   Your car could be repossessed if you miss payments and you will still be responsible for covering any difference in value between the car value and the balance remaining on your loan.

To qualify for a logbook loan, you have to be the legal owner of the car and you can not have any finance outstanding on it.  The nature of these loans makes them a risky solution to debt, and there are other ways to get finance which could be cheaper for you.

Consumer Protection

Logbook loans rarely have the same degree of consumer protection as other hire purchase agreements, and many have additional early repayment fees and other charges built into the deal.  The loan provider is able to take action following any defaults and will utilise the services of bailiffs sometimes without having to apply to a court.

If you’re thinking about using a logbook loan as a way out of debt, you should talk to Creditfix first.

Call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

A secured loan is taken against an asset such as your house.  If you default on the loan, the lender has the right to sell this asset in order to settle any outstanding debt.  Borrowing money against your home as a way of settling your debts is not a good solution, if you are struggling with debt there is a real risk that your property could be repossessed if you fail to make loan payments.

If you have missed payments and your loan provider is threatening you with repossession, you need to act quickly.  Talking to one of our advisers could help you find another debt solution and help you slow down or stop the repossession process.

At any stage where you think you are going to fall behind with loan or mortgage payments you should immediately contact the loan provider for further information.    Make sure you take the time to explain your situation to them and be completely open and honest.  Start a dialogue and show them that you are open to looking for a solution to your problem.

Don’t ignore letters from the loan provider.  You should respond to any mail you get, and let them see that you are trying to find a solution.  If your lender does not want to explore alternative repayment options and is looking to proceed with court action you should contact one of our advisers.

Should your house be repossessed, your lender will sell the property to pay off the money you owe them. In instances where the amount raised from the sale doesn’t cover the amount outstanding on the loan, the lender may still take you to court in order to get the remainder of the money owed.

Call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

Everyone has to find the money to pay for basic utilities such as gas, electricity and water bills.  If you find yourself falling behind with payments with any utility bills, it is important to quickly do something about it.  Ignoring the problem will not make it go away, it is likely to get worse.

Even though you are not likely to have any basic services cut off these days if you miss several payments or if you pay late, you should always avoid building up back payments on any utility bill.

The very first port of call should be to call the utility company to discuss your situation.  Be open and honest with them and make it clear that you know about the level of debt that you have with them and that you are willing to do something about it.  All utility companies should be prepared to work with you to find a realistic way of clearing your debt with them

Many of us choose to pay a monthly direct debit to cover utility bills.  This is often a fixed amount, so it is worth checking to make sure it covers your usage.

It is also worth checking whether any utility bill is based on estimated usage.  If so you should take a meter reading and contact your provider with it so you can get a more accurate picture of your situation.

If you are struggling to make payments to utility providers and building up arrears, simply call Creditfix and one of our advisors will run though your options with you.

Call us now for immediate and confidential free debt advice on 0808 208 5198 or complete the form.  We can start to work through our debt problems as soon as you contact us.  Our advisers are trained to give you the best advice for your situation.

Do you have unmanageable debt? Call today and find out how we can help.