Welcome to Credit Card Debts Cleared. This is my first blog post and I am new to this. I am finding it very daunting and bewildering trying to find my way around, it’s like the mine field most of us walk with our debts!
I’m sure you’re wondering why I would want to start a blog about Clearing Credit Card Debts. Well going back about 10 years ago I bought a Euro-Debt Franchise as I felt I was the world’s most qualified authority on the subject of Personal Debt. I had after all had it all my working life in many different disguises, for example mortgages, loans and credit cards. I use to think it was only me who had debt. I juggled it; I paid it off, and then replaced the credit card debt over the next few years again and each time I paid it off it just grew back again and around I went again.
I wound up my Debt company as all I was doing was taking people with £7,500 to £100,000 debt with sleepless night and worry from paying £600 to £1,900 a month and more, to paying £60 to £100 a month. Relief they might have had for £900 to £1800 for arranging their Informal Arrangement with their lenders. But the debt would now just sit there and one day when they died, the mortgage, loan and credit card providers would collect their money, granted without interest but they would get their money finally.
For many people I felt the real answer would be an Individual Voluntary Arrangement [IVA] or Bankruptcy. I found out after asking questions of my clients that they really needed was a remortgage for those who had the equity in their properties. Not everybody was in this fortunate position.
For those who I felt would have benefited from an Individual Voluntary Arrangement [IVA] or Bankruptcy; they would have had all their debts wiped out after three to five years if they had taken an Individual Voluntary Arrangement [IVA]. If they had a serious debt problem then they could wipe everything off and start again by going Bankrupt. These are serious decisions and need to be made. You should not make these decisions with out taking professional advice first.
I have never understood why anybody would want to stay in their home with massive debts for their mortgage, loans and credit cards and be constantly in debt. Then they agree to pay their debts at higher than normal interest rates when they are trying to consolidate their debts. This situation started because they had missed payments and clearly they have cash-flow problems. I understand the theory of my home is my castle, but at what cost should you keep your castle. When you have serious financial problems and your marriage and health are imploding, that is the time to take a deep breath and walk away and start again.
I finally wound up my debt company and became a Mortgage Broker. For the last ten years Britain has never had it so good and in the last eight years we have seen interest rates drop through the floor after 9/11/2001. What has surprised me the most about people in general was that most of them felt that interest rates would always remain low. We all seem to have forgotten the high interest rates of the eighties or have we just become more optimistic.
Recently, we were all hit by the news of the American Credit Crunch. All the journalist and renowned gurus of finance started to talk up a recession. Then the big banks in America started showing horrendous losses and their company presidents started resigning. I personally believe we are going into a global recession. To back my theory the Governor of the Bank recently said that things were going to get tight. Wow!
The British Banks, Building Societies and Finance Institutes have started tightening their lending policies. The Prime Minister Gordon Brown stepped in to give the Banking sector relief by offering to make more money available through the Bank of England to help the banks out of their awkward position. The Banks, Building Societies and Finance Institutes don’t trust each other and have stopped lending money to each other. This is why Gordon Brown stepped in to relieve the money crisis that was developing in the banking sector in this country. This problem is not yet solved!
Property valuers don’t know which ways property values are going and are down valuing properties, this will probably drive down house prices. The housing market in the UK is just buoyant and will probably remain like this for the next few years; this is mainly due to the shortage of new housing. To add to this the mortgage lenders are re-writing their criteria’s daily and lending policies are going back to the 1970’s. Six months ago we had 20,000 different interest rates available, now we have about 5,000 different mortgage products and where we had 160 different mortgager providers, we now have about 130.
By now you must be wondering what all this has to do with clearing your credit card debts legally. I have tried to show you that I have an understanding of Debt and the way finance and the economy works.
I said earlier we have never had it so good in the last ten years and the banking and finance sector has enjoyed it as well. We have all seen the millions of pounds of bonuses earned by the city banking boys and the banks over the last ten years. Well done to them they earned it!
Meanwhile, we were all allowed or should I say encouraged to keep on borrowing money for mortgages, buy-to-lets, car loans, homeowner loans, and credit cards. The Credit Card Companies offered us lots of different offers to entice us to take their credit cards on and even move our balances around.
We were all offered higher credit limits without proper due diligence being carried out by the providers to see that we could afford the new increased credit limit along with our existing credit card debts, mortgages and loans. The Mortgage and Loan companies relaxed their criteria’s and allowed us to self certify our incomes and our ability to pay the debts. We were allowed to borrow up to seven times our income to buy properties and homes.
The Financial Services Authority [FSA] started to regulate the Mortgage Industry back in November 2005 and Mortgage broker became responsible for making sure their clients could afford the mortgage along with all their other outgoings. The FSA does not regulate the whole of the Mortgage and Lending Industry; they only regulated residential mortgage and personal loans up to £25,000.
While all this easy money was being thrown around by the providers of finance; they were not ensuring that their documentation for their finance agreements were legal and correct when they asked us to sign for our finance agreements. Now, I understand that we have all arranged our finance [Mortgages, Loans and Credit Cards] ourselves and we agreed to pay this money back and we signed in accordance with the Financial agreement.
The providers of Financial Agreements are responsible for issuing legal agreements and they should have made sure that they had legal contracts that could not be challenged in a British Court. For some people this is payback time, for others it is just worth a punt and for the vast majority it has just arrived in time. One thing is for sure if we did not pay our Mortgage, Loan or Credit Card our providers of these financial agreement would be visiting us in court to recover their money.
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