Don't be a 'tosser' this Christmas

The debt crisis in the UK is spiralling out of control, and with the festive season spending this is just likely to worsen, but at what cost?

[ClickPress, Fri Dec 22 2006] The Conservatives are behind a controversial, yet innovative debt awareness campaign aimed at raising the awareness of the ever increasing debt crisis in the UK.

Launched in November this year, www.sort-it.co.uk was timed to coincide with the build up of consumer spending for this years festive season. Sort-it hopes to encourage people to take responsibility for their spending and ‘ignore the inner tosser and beat debt’.

The campaign has been heavily criticised by other political parties due to the provocative use of the word ‘tosser’. However it has been overwhelmingly supported by many of the larger debt help lines such as the Legal Services Commission, who launched their service 2 years ago, and are expecting double the amount of calls this year from concerned consumers.

The personal debt crisis is the UK has reached unparalleled levels, with the highest levels of debt in Western Europe, UK consumer debt has smashed through the £1 trillion mark. Experts believe that this festive season alone around £11.4 billion will be put on plastic in the UK. This is made even more concerning when we are told that over 4 million people are still paying for last years Christmas credit card spending.

The result of this irresponsible spending will cause repercussions which will be felt for many years to come. Cases of Individual Voluntary Arrangements (IVAs), the most favoured alternative to bankruptcy, soared to 12,228 in the third quarter of 2006, a 118% increase on the same quarter of 2005.

House repossessions are also on the up, indicating that secured lenders are taking firmer action on mortgage arrears, with a 43% increase in the first half of 2006 compared to the second half of 2005. The Council of Mortgage Lenders (CML) are expecting repossessions to hit the 15,000 mark for 2006-2008, however these estimates do not include repossessions which are the result of arrears in either 2nd or 3rd charge lending or now more commonly unsecured debt.

The Consumer Credit Counselling Service (CCCS) has warned that unsecured lenders are now turning to the courts for County Court Judgements, which in 2006 has seen the most rapid rise in the number of judgements for 14 years. Failure to keep up payments on CCJ’s can result in the unsecured lender applying for a charging order against your home.

Speaking about credit card arrears, Sean Gardner, chief executive of MoneyExpert.com, said: ‘…it is clear that there is a need for many of us to change our financial habits’.

The sobering effects of the festive seasons spending is unlikely to be felt until January or February, which will be exaggerated by the potential increase of interest rates in early 2007.

For some homeowners, the Conservatives message is too late. For those people the only solution to avoid repossession is to sell their home, if they are fortunate enough to have some equity left. With the average home selling in 153 days in the UK, waiting to sell your home on the open market may not be enough to avoid repossession.

Savvy property investors have identified this problem and are offering a solution to help prevent repossessions, and in some cases to rent back the property to give people an opportunity to clear their debts and start afresh. RedSofa, a property investment company is offering such benefits as purchase guarantees, generous £500 referral fees, legal fees paid and completions in a matter of a few weeks, in return for a discounted sale price. Homeowners are now offered a final lifeline to help solve their unmanageable debt problems prior to being repossessed.

For anyone facing repossession or having difficulty managing their debt burden, this could be the ideal Christmas present.

About RedSofa

RedSofa is a property investment company based in the North West, which offers tailored solutions to people who are looking for a quick guaranteed property sale. For more information please visit www.redsofa.com.

Contact: Jeremy Vernon, Director at info@redsofa.com or call 0800 0436631.

Bookmark this release: Del.icio.us - Digg - Furl - Blinklist - Reddit