Do you think a payday loans company should have sponsored NYE in London?

by on January 6th, 2011

Payday loan company Wonga sponsored free travel in London on New Years Eve 2010. The sponsorship deal led to much criticism for London Mayor Boris Johnson. Here are a selection of the views people expressed:

ClearDebt’s Andrew Smith spoke about payday loan companies back in August, you can hear his 50-second soundbite here. His main point was that for some people, payday loan companies are the only form of credit available, and these people have no choice but to use them for emergency expenses – and the interest charged, whilst high, is not unreasonable if it is used as intended for a very short-term loan.. The danger comes when people start to rely on these types of loans to pay their regular outgoings, and of course people who repeatedly use payday loans to fund non-essential items.

Do you think Wonga should have been allowed to sponsor such a high profile public event? Vote in our poll now and leave your comments below!

Tags: payday loan, payday loans, poll, sponsorship
Posted in Creditor Behaviour | 1 Comment »

Stricter bankruptcy conditions set out in new guidelines

by on January 4th, 2011

Comparison site Lovemoney.com recently posted an article on new proposed changes for the conditions put in place for bankrupts regarding disposable income.

Income Payment Orders and Income Payment Agreements

Bankrupts who are making payments towards their bankruptcy debts, must continue to make them, even after their discharge. These payments are known as Income Payment Orders or Income Payment Agreements. They last for three years. Previously bankrupts would be expected to pay around 50% – 70% of any disposable income they earned to their creditors as part of Income Payment Orders and Income Payment Agreements.

New Guidelines for disposable income

Lovemoney reported that new guidelines put in place by the Insolvency Service would mean that bankrupts would not get to keep any of their disposable income at all – not even an allowance for emergencies. They argued that if this guidance is put into practice, bankrupts would essentially be discouraged from working or bettering themselves, for example by going for a promotion, because they would not benefit from that extra income. We’ll try to keep an eye on this, because, in practice, in the past, the Official Receiver has not been unreasonable.

IVA as an alternative to bankruptcy

This news further adds to the advantages of an IVA as a debt solution for some people instead of bankruptcy. Unlike Bankruptcy Income Payment Agreements, IVAs contain a built in allowance for emergencies. Both IVAs and IPOs in bankruptcy  include windfall clauses which cover what would happen should the debtor come into some additional money, for example an inheritance or bonus. Typically the debtor would be expected to pay all of any windfall, up to the total amount owed, and up to 50% of any salary rises or bonuses into their IVA. The government’s guideline (see link above) is not so clear when it comes to an IPO.

It’s worth having a read of our full list of IVA advantages over bankruptcy, and if you need help with your debt problems and really don’t know what to do, it’s worth completing our online contact form and one of our trained advisors will be in touch to discuss what debt solutions are suitable for you. Complete our online contact form now.

Tags: Bankruptcy, bankruptcy income payment agreement, IVA
Posted in Bankruptcy | No Comments »

Monster budgets unnecessary

by on December 31st, 2010

If you asked us to pick out a film of 2010, it may come as little surprise that we may choose Monsters the widely acclaimed and daring film by British director, Gareth Edwards, who has been dubbed the anti-James-Cameron.

It’s not just that the film is an exciting seat of the edge thriller, staged in central america, which recounts six years after a NASA probe crashed over Central America how an alien-laden spacecraft spawns tentacle creatures of unimaginable sorts. Official website: monstersthemovie.com

It’s that the film has caused such a stir in these austere times in Hollywood as it was reportedly made for less than $15,000.

To put that into perspective, James Cameron’s Avatar has been estimated to have cost $300m.

That’s the equivalent of about 20,000 Monsters. Scary.

Monsters are welcome, but not monster budgets thank you.

At ClearDebt, we take the issue of personal debt seriously. We also believe moments of humour are affordable to everyone, including those in a serious situation. This Friday blog post is part of the monsters series. If you are concerned about your personal finances, we recommend you complete our online contact form or ask a ClearDebt advisor.

Tags: avatar, gareth edwards, james cameron
Posted in Monsters | No Comments »

That left over feeling

by on December 30th, 2010

I saw this article on Christmas food waste the other day.

It staggered me. Apparently we waste 230,000 tonnes of food in Britain over the Christmas period. I reckon that’s around 4 kilos of food for every man, woman, child and baby in the country. No wonder Rover and Kitty look a bit corpulent on the scraps. More poignantly, that’s more than two tons of waste food for each homeless family in the country.

tips for using your Christmas Dinner leftoversI’m no scrooge – I want to provide a great family Christmas and, this year, my Mum and my sister are doing most of the work and most of the paying. Nevertheless, I spent £75 yesterday just on the stuff I’d committed to for a boxing day lunch for eight.

Now, more than ever, i’m determined to waste not a pennorth’s worth.

I remember Christmas being a time for the creative use of left overs – and I think it should be again. It isn’t just the waste that’s worrying – it’s that we spend as much on food for a week, at Christmas, as we do in any other month (or longer) throughout the rest of the year.

So – I’m going to try to save money be using everything and keeping the recycling to a minimum.

Here are a few of the sites that will help me make the most of my left overs:

Love Food Hate Waste
Christmas Leftover Recipes from Good to Know
Good Food Channel Christmas Leftover Recipes

Happy Christmas and a peaceful and prosperous new year to all our readers.

Tags: budget for christmas, food waste, saving in the home
Posted in Managing Your Money | No Comments »

How much will the looming VAT increase cost you?

by on December 30th, 2010

For the last year or so we’ve luxuriated in a decreased VAT rate of 15% – down from the 17.5%. I don’t know about you, but I don’t think I noticed the difference in prices much. With an increase to 20% set for next week, we look at exactly how much extra you can expect to pay for goods and services in 2011.

At first glance, it seems a lot: We take a closer look at the figures to give you a clearer picture about whether it’ll be extra pennies or extra pounds that you’ll be paying out come January 4th 2011.

These are just some of the reported cost increases due to the VAT rise:

The rise will add at least £33 a year to the average shopper’s supermarket basket

Source – The Guardian, June 2010

VAT will rise to 20% on January 4 2011 – costing a typical household £425 a year

Source – MSN Money, June 2010

economists have also predicted it will cost the average middle class family up to £448 a year

Source – Which.co.uk, December 2010

The average family will be £225 a year out of pocket

Source – The Independent, December 2010

With people already struggling with their finances, it’s easy to panic when looking at the figures above but the additional VAT you have to pay will depend on your individual spending.

To help you calculate and plan for the extra expenditure we’ve put together some figures below showing how the VAT increase will affect you:

Price at 17.5% VAT Price at 20% VAT Increase
£5.00 £5.11 £0.11
£10.00 £10.21 £0.21
£20.00 £20.43 £0.43
£50.00 £51.06 £1.06
£100.00 £102.13 £2.13
£200.00 £204.26 £4.26
£300.00 £306.38 £6.38
£400.00 £408.51 £8.51
£500.00 £510.64 £10.64

We used The VAT Calculator, a free online tool, to put together the table above.

It’s also worth remembering that the price of some items won’t change because they are excempt from VAT, such as most food items, books, newspapers, magazines and children’s clothes. You can read more about VAT exempt goods and services on the Directgov website here: VAT Basics for Consumers.

If you’re concerned that your spending is going to rise to an unaffordable level, get in touch with one of our advisors on 0800 019 2095, they will be able to go through your income and expenditure and help you decide the best course of action for your finances. Calls are free from a BT landline but charges from mobiles and other networks may vary. Alternatively fill on our online debt analyser by clicking here and we can call you back.

Tags: budget, budgeting, spending, VAT increase
Posted in Managing Your Money | 2 Comments »

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