Posted by kozmicstu on Tuesday, 21 November 2006 18:52:47

I think an important step would be to regulate advertising by loan(shark) companies who direct advertisements specifically at those who cannot afford repayments (CCJs? Arrears?) We regulate advertising on smoking and alcohol, and neither of these are as damaging to society as debt.

Particularly damaging are adverts such as those from FirstPlus featuring Carol Vordermann, who is trusted by many people, who claim to be able to solve debt problems, when all that they actually achieve is to extend the time period over which the debt is paid.

Financial education such as effective budgeting, spending within one's means, and what various terms such as APR, credit rating and interest really mean should be mandatory, and providing 'transparent' information on credit cards wouldn't be as good as discouraging the use of credit cards in the first place. Shouldn't we be asking what a credit card actually achieves, other than accumulatig debt?

Stu

Posted by canvas on Tuesday, 21 November 2006 20:11:24

Credit cards are an invaluable tool if used responsibly. I find it amazing that some people even don't check their bank statements on a regular basis. Financial education is a good idea.

Posted by terraEric on Wednesday, 29 November 2006 18:56:07

George, the problem of personal debt is not that big an issue for most people. For those who do have a problem we must reflect back on the institutions who allowed them to borrow more than they could afford to borrow and reasonably pay back.

There are quite a few High Street banks with managers struggling to achieve huge targets that will simply give loans to any one who asks. This is frequently seen on the television when the loans are being canceled by the lender once the spotlight comes on them.

The solution to this is simple but quite prescriptive. Most responsible lenders already apply the rule of no more borrowing than your annual income. Get the FSA to enforce this and the problem will gradually reduce in the coming years.

As a bank manager from a responsible lender I can assure you that this will work.

Posted by Debtbytes on Thursday, 30 November 2006 21:23:24

George, firstly I feel you would benefit from understanding the various 'tools' that debt advisors have to help struggling people get out of debt.

The Individual Voluntary Arrangement is a very important product for many people wishing to avoid bankruptcy and repay what they owe over a reasonable period of years.

Good debt advisors will use the IVA strategy alongside other tools such as bankruptcy and debt management plans and explain the advantages and disadvantages of all the options to their client. Unfortunately, less ethical organisations are more interested in 'selling' IVA's first without considering the suitability of the product for the consumer.

I read with interest your shopping list of issues that needed to tackled in order to address the UK debt problem and I did not see the relevancy of singling out one particular strategy. This simply sends the wrong message to organisations with a vested interest in gaining more control over the debt recovery process from a creditors perspective. If you are genuinelly interested in gaining a fuller understanding of the entire discussion then please feel free to join the not for profit Myvesta Private Debt Counsellors discussion forum. I am sure you will be granted access if you ask the administrator George.

In the forum you will see how some large creditors are breaking the banking code and forcing thousands of people into bankruptcy unnecessarily due to arbitory policies when it comes to casting their votes as part of the IVA process. I hope this will provide you with a truer picture of the controversy that surrounds this particular debt help tool.

http://myvesta.org.uk/forum/index.html

Kind regards

Sean