Features
THE DEBT INCREASESince 1997 the number of people in serious debt is calculated to have quadrupled and the number of County Court Orders issued to retrieve debt is now running in excess of one million court orders per annum. An estimated one in five adults in the UK is systematically denied access to mainstream credit. The number of consumers exposed to predatory lending has risen in the last 10 years and is linked to the financial exclusion caused by insecure employment, family breakdown and recession.
It is currently asking people to write to their MP and ask them to sign Early Day Motion 257 as part of their campaign. Its also responding to current consultation on how to tackle extortionate lending. Debt on our Doorstep campaigns for: In December of last year Debt on our Doorstep took
its case to parliament. More than 300 people lobbied MPs, participated
in workshops and looked at ways to provide a ‘joined-up’ response
to financial exclusion. The day of action also saw the launch of
two key reports from the Debt on our Doorstep is asking local community groups to send them information about their activities. This could be a ‘debt hearing’ that brings together local people and policy makers and reports on the first hand experiences of people in debt. Or it could be details of credit union activities and other projects that provide an alternative to high cost borrowing. To send information about the work that is being done around the country, complete a standard template available on the Debt on our Doorstep website. They plan to make summaries of activities and results of debt hearings available on the website soon. |
The financial world is full of unscrupulous money lenders and loan sharks waiting to trap you in a vicious cycle of debt. Laurence Pollock sees how a UNISON-backed free debt advice company can help those struggling with their financial commitments
Managing your debt
Advice is the first port of call for anyone facing serious debt problems.
Ideas on handling the legal and financial crisis can stop the panic and
offer a way forward. But a fresh start also means sharpening up money
management.
Some advice, however, will get you deeper into trouble. There are plenty
of horror stories about the percentage mark-up charged by maverick financial
advisors.
Now UNISON Welfare is working with a free debt advice company to help
members who are struggling with their financial commitments.
Lincoln-based FCL offers free advice which is accessible directly through
a freephone number UNISON Welfare Debtline on 0800 389 3302. Previously
members had to be referred through UNISON Welfare.
The first stage is an initial assessment before seeking more detailed
information. This allows FCL to tailor a solution to members’ particular
needs. It has a number of strategies depending on individual circumstances.
The first stage of the ‘payplan’ programme, one of FCL’s
services is to negotiate with creditors to achieve some sort of reduction
in the amount owing. FCL will also offer advice on managing your budget.
Where debts are particularly serious, however, it will suggest an IVA
(trust deed in Scotland). This is a legally binding agreement but offers
a way to avoid impending bankruptcy.
FCL, of course, can also take members down the self-help route. This includes
making sound suggestions on dealing with creditors.
John Walker the secretary of Cambridgeshire police retired members’
branch recently attended a training day on debt at the Cambridge Professional
Development Centre.
He commented: "The areas covered were very involved and the course
handout of was excellent – probably the most comprehensive I have
received in more than 35 years of NALGO or UNISON training.
"Debt may not be a topic of regular canteen conversation because
the average person is reluctant to admit to the problem. Undoubtedly we
have members in our branch with problems and it is our responsibility
to inform them that confidential free assistance is available through
UNISON membership.
"A debt is most easily tackled as soon as it is perceived and we
have a duty to our members to be vigilant and point them in the right
direction. But this is an area that the average steward may feel unqualified
to get involved in. Now they can advise either the UNISON branch welfare
officer or FCL direct and they will do the rest."
Brian Jones, UNISON Welfare’s fundraising officer, points out that
FCL offer a free service because the company has an agreement with major
creditors, banks, building societies and companies such as Marks &
Spencer. As a result that the fee paid by those creditors to FCL will
not be retrieved from the debtor.
UNISON Welfare Debtline freephone: 0800 389 3302
A special aspect of the service is that by working in partnership with FCL, UNISON Welfare can maximise the effectiveness of any additional help. FCL advisers are aware of the type of help UNISON Welfare can offer and will refer the caller to UNISON's charity if they feel it can help further with a grant.
For example, FCL may suggest that a grant to deal with rent arrears for a member with multiple debts allows their position to be stabilised sufficiently for a repayment programme to be established for unsecured borrowings.
Members applying for a grant will we asked to complete an application form in the usual way.
Government moves on extortionate loans
The government has pledged to make it easier for consumers tochallenge
unfair credit agreements under new proposals this month (March). A new
body will fast track complaints about extortionate loans and, for the
first time, consumer bodies will be able to take group claims on behalf
of borrowers.
The proposals would change the wording of the law to make more credit
agreements challengeable on the grounds of them being 'unfair' instead
of 'grossly exorbitant'.
Other measures include allowing third parties such as the OFT to take
action on behalf of borrowers and ensuring that lenders provide appropriate
and timely information throughout the credit agreement
The DTI has already published plans to reform the rules governing the
licensing of credit businesses. Trade minister Melanie Johnson has announced
her intent to remove the existing upper limit of £25,000 on credit
agreements governed by the Act, and consulted onmaking the rules on early
settlement of credit agreements fairer, as well as enabling consumers
to conclude credit agreements online.
The consultation document on extortionate credit is on the 
DTI website
Contact the article's author Laurence Pollock
|
|
LOTS MORE FEATURESIncluding stress in the workplace, getting out of debt and the pensions crisis more... |
© Copyright 2008
