As the cost of living keeps rising, many borrowers who have already renegotiated their debt payments with a financial management plan are struggling to make ends meet.
In the short term, household finances are set to worsen as the Halifax and several other banks and building societies have announced a round of interest rate rises that will add around £27 a month to a £150,000 mortgage.
As the economy languishes in the doldrums, few households can expect money problems to ease up.
Paying bills is a matter of pride for most borrowers, who don’t like to admit to themselves or others that they are in over their heads.
As mortgages become more expensive, families with children need to put themselves first and look after their own interests, even if that means looking at help from outside with debts.
If that means diverting some cash from a financial management plan towards paying the mortgage, then so be it.
The same goes for borrowers who are paying more to get to work because of increased fuel costs.
Financial management plans have a built-in review that makes sure a borrower is repaying a reasonable monthly amount while still having enough cash available to pay the bills.
Lenders want their money back, but their interests are not served if the borrower is falling in to even more debt.
Lenders will probably come back every year to see if the borrower’s circumstances have changed so they can pay more money towards their debts.
Don’t forget the arrangement works both ways - borrowers can also present a budget that proves they have less cash to spare because of changing circumstances.
Both amount to the same - a renegotiation of the terms of the financial management plan.
Neither side has to agree to a new deal.
Just as a creditor can still take a borrower to court to regain their money, a borrower can still opt for an individual voluntary arrangement (IVA) or bankruptcy.
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Notes to editors:
- Money Debt and Credit is one of the UK's fastest growing financial solution companies.
- The company was founded in 2006 on the belief that every client has the right to appropriate financial advice. Since then we've gone from strength to strength and have helped thousands of people with a variety of financial solutions.
- We offer a range of services including Financial Management Plans, IVA s, Loans, Mortgages, Full & Final Settlements, Bankruptcy, Investments and Pensions.
- Specialties: IVA s, Financial Management Plans, Loans, Mortgages, Trust Deeds, Full and Final Settlements, Bankruptcy
For more information or debt advice contact:
Money Debt and Credit
45 Clarendon Road, Watford, WD17 1SZ
Tel. 0800 16 999 46