Debt Management Plans (DMPs) are much in news reports currently. A few unfavourable issues with the sector made the biggest headlines. Like any enterprise a handful of bad apples can give the barrel a bad name. In Britain the Office of Fair Trading (OFT) has recently taken actions to handle the bad apples. Essentially the most significant offences it has identified took place in the areas of marketing and charging behaviour. In September 2010 it issued a warning to 129 debt management companies and followed that up with high profile enforcement actions against the worst offenders. The OFT plans to publish revised debt management direction in June 2011. It is not evident now whether or not the government plans to introduce any laws to control DMPs. Still the Ministry of Justice has circulated a consultation document relating to the way forward for DMPs. Three options for regulation are being offered. They are to marginally enhance regulation by the OFT, to introduce industry self regulation with voluntary codes of practice and/or to create a fresh solution i.e. a statutory DMP. Since the DMP is the predominant personal insolvency solution in the UK at the present time, it is perplexing that the government seems to shrink from the obligation of legislating in this area. So what is the current condition of national debt management advice and how can it give relief to debtors? Continue reading
Author: admin
Challenging the Irish Insolvency Law
A challenge to Ireland’s arcane insolvency legislation might well be made to the High Court in just weeks, in line with a newly released story in The Sunday Independent by Maeve Sheehan. This is certainly an amazing development if a challenge is made because of claimed breaches of the constitutional rights of people looking at bankruptcy. It would be truly astonishing if this might happen and turn into the prompt for reform of the legislation and also the launching of fresh laws on individual personal debt in addition to debt codes. It might be unfair to accuse the new Fine Gael – Labour coalition administration of sitting on its hands on this question, given the inertia and inaction of the former Fianna Fail – Greens administration, that couldn’t manage to get thier combined minds round the idea of personal debt forgiveness. The new administration has had many significant sovereign and banking money issues to cope with but it is now time to deal with business that would help the individual citizen. Continue reading
Fall in levels of Insolvency
In recent months I have written on the dramatic growth of personal insolvencies in the UK over the last decade and of the reasons behind this growth. That is to say it was primarily down to the explosion of availability of credit and other economic factors. I have suggested that it will only get worse before it gets any better. Then earlier this month the third quarter statistics were released by the government’s Insolvency Service. They showed that for both forms of personal insolvency, bankruptcy and individual voluntary arrangements, there has been a fall. Continue reading
Banks and Treating Customers Fairly
The UK’s big five banks recently reported huge half year profits to the City and are projecting profits over £40 billion for the full year. I don’t want to sound like Gordon Gecko but “profits are good” and these profits could be construed as good news of a buoyant economy. Sadly however this is against a backdrop of falling house prices, rising interest rates, high levels of household debt, house repossessions up 30% on last year and inevitably an increase in the number of individuals seeking help with debt problems. Continue reading
How Debt Can Affect a Family
If you, your partner, or both of you are struggling with debts, it can affect the whole family and become a very harrowing experience for all. The effects of debt can cause stress, depression, anxiety and even aggravation of various physical illnesses too. The only way out of the problem is to communicate and work together to solve it, or seek help from an advisor.
Continue readingTaboos surrounding Insolvency, IVA’s and Debt
The past decade has experienced a huge growth in the number of personal insolvencies – Back in 1998 there were less than 30,000 per year. In 2007 it is likely that over 145,000 will be declared insolvent. To put this in context that equates to the entire population of Oxford for the year or 400 people each and every day. This growth has given rise to many myths and misconceptions as to the reasons behind the growth. Continue reading
CVAs and Self Employed Businesses
Last month I described administration and how it affected Leeds United. In order to save the club from liquidation* the administrator propsed a company voluntary arrangement (CVA). Under the proposal, the club would be sold back to a consortium led by the majority shareholder Kent Bates, and the sale proceeds (after deduction of the costs of administration) would be distributed to unsecured creditors. Continue reading
Insolvency & Administration
Leeds United fans will have followed the current crisis at the club with great interest. Most football fans have heard of Administration and know that any club choosing this path will be automatically deducted 10 points. However, how many fans know exactly what it means and what are the implications? Continue reading
Construction Industry Scheme | Financial turbulence | UK economy
You are probably aware the Current Construction Industry Scheme (CIS) will be replaced by a new system from April 6th 2007. There will no longer be any CIS registration cards, certificates or vouchers.
Instead contractors will now have to “verify” new sub-contractors directly with HM Revenue and Customs (HMRC). In addition, each main contractor must decide whether anyone being hired is either self-employed or an employee and must sign a declaration to that effect.
Financial turbulence in the U.K. economy
My articles in previous months have been somewhat depressing and downbeat. This would be surprising to those that know me as by nature I am optimistic. It can be a fine line between optimism and naivety but there comes a time when even the most optimistic of individuals have to face reality.
In economic terms the reality is that the UK is facing its most difficult time in the last fifteen years. By most accounts whilst the UK economy is not in a recession, economic growth is stalling, high street spending is down, house prices are falling and there has been a decline in mortgage lending coupled with confidence continuing to spiral downwards. In the US several accounts suggest the recession has already arrived and Japan shows similar signs. Whilst the Federal Reserve chief Ben Bernanke says they are not currently forecasting a recession he did say that the outlook for the US economy in 2008 has worsened. With the global economy now so interlinked, these signs also do not augur well for the health of the UK economy. Continue reading