Those with deep debt problems can benefit from taking advice and instigating measures to solve the problem, but the right answer to the difficulties faced by individuals varies from person to person, an expert has said.

Managing director of the Debt Advice Foundation David Rodger listed a "wide variety" of solutions for those whose debt has become unmanageable, including debt management plans, individual voluntary arrangements, bankruptcy and loan consolidation.

"There is no one size fits all solution and the best option depends on the individual's personal circumstances," he stated.

And Mr Rodger emphasised that getting good advice matters, as taking the wrong approach could make the situation even worse.

He concluded: "The amount you owe, your employment status, whether or not you are a homeowner all affect which is the best debt solution for you."

Those who are in debt may wish to discuss their own options and in doing so could take the first steps towards becoming debt free.

Discussing debt management plans earlier this week, managing director of Yvonne Goodwin Wealth Management Yvonne Goodwin said the key is that people should face up to every detail of their problem and deal with it quickly, as the sooner they do, the faster they will get debt free and even be able to start saving for the future.

She warned people not to "bury your head in the sand" or leave envelopes unopened for fear of the contents, stating that failure to tackle problems head-on will only lead to the situation getting worse.

Posted by Paul Thacker
 

Those who want to make a debt management plan work need to be focused on working out exactly what the nature of their financial situation is, an expert has advised.

Managing director of Yvonne Goodwin Wealth Management Yvonne Goodwin said: "Make a list – what you've got coming in and what your outgoings are, including the costs of servicing your debts. This is essential to find out whether your debts are a problem."

The problem arises when incomings are less than outgoings, she explained.

Ms Goodwin added that it is vital to face up to all aspects of a debt situation, however unpalatable that may seem, stating: "Don't bury your head in the sand, don't leave the envelopes unopened – it won't go away, it will only get worse."

Such an approach will help tackle the problem and ultimately free people up to get on with their lives, she concluded, suggesting that in time this will mean people who have become debt free can put their money into savings instead.

This last consideration, however, is something people should look to only after they have resolved their debt problem, Justin Modray of candidmoney.com recently emphasised.

And he noted that many people currently need every spare penny to ensure they avoid "drowning in debt", due to the financial strain that is being placed on many family budgets.

People in this situation are facing contrasting fortunes to those who already have savings, Mr Modray pointed out, as the latter group can fall back on these as a means of covering their outgoings.

By James Francis
 

Britain is heading for a Japanese-style "lost decade" of very low economic growth, an economist has predicted.

Chief economist at Ignis Asset Management Stuart Thomson issued the gloomy prediction on the basis that the Bank of England is being too optimistic about the prospects for growth, a view which, if true, could spell very bad news for those trying to get debt free.

He said that while its current assessment is based on the historical truth that past recessions have not been as deep as first thought, the substantial recoveries the economy has made from them have resulted from consumers spending and borrowing more, whereas now people are trying to reduce their debt.

Mr Thomson said the Ignis view is the Office for National Statistics has produced a "misleading picture" of the economy based on an optimistic reading of data and that the reality for the UK is the economy will not reach its pre-recession strength for another 70 quarters.

Such a scenario would be similar to the Japanese experience after it went into recession in the early 1990s, where – despite persistently low interest rates – growth remained minimal fr several years.

Mr Thomson's predictions for growth were that the current level is "as good as it gets" and this year will see gross domestic product (GDP) expanding by 1.1 per cent, with 1.3 per cent growth next year.

However, this view is at odds with two recent reports on the economy, by the National Institute of Economic and Social Research (NIESR) and the Confederation of British Industry (CBI).

Both said this year would see 1.3 per cent growth, with the NIESR forecasting two per cent growth in 2012 and the CBI expecting 2.2 per cent.

Posted by Paul Thacker