Consumer debt and its effects

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Debt consolidation agency facts
Sometimes life can get on top of you and out of control. When this happens many of us indulge in a little retail therapy but when a little becomes a lot then you can hit problems. When your spending constantly out strips your income you will find yourself in debt. The only way out may be a Debt Consolidation Loan to bring all your debt under the one payment. If you have got yourself int... Read debt consolidation article



Debt Problems - Can Forbearance Benefit You
Forbearance is when a lender agrees to let you delay your payments to them for a short period of time. That doesn't mean the lender has forgiven the debt but just allows you to pay what you owe at a later date.

Forbearance can be an option to someone that is experiencing temporary financial difficulty. A forbearance agreement is most commonly applied to two kinds of loans, mortgages and... Read debt consolidation article



Consumer debt and its effects
Consumer Borrowing Consumer borrowing in the UK has now crashed through the £1 trillion barrier. 80% of this is due to credit card borrowing, loans and mortgages. How are people managing to handle their debt and what effect is debt having on families today?

The National Consumer Council reports that 6 million families in the UK are already struggling to make repayments towards their debt, and Citizens Advice reports that over the last 6 years, they have seen a 44% increase in the number of people seeking debt advice. This may be just the tip of the iceberg. There must be many families in the UK who have debt problems, but are not aware of the free help and advice available.

Tackling Debt

According to a DTI survey carried out in 2002, a household is likely to be over-indebted if:

25% of your annual income is spent on repaying Creditors

50% of your annual income is spent on repaying credit and mortgages

You have 4 or more companies that you owe money to.

People find it difficult to make repayments for a number of reasons. Generally, the underlying cause is some kind of change in personal circumstances such as job loss, divorce, illness or a new baby. In these instances some people may resort to more borrowing in order to pay creditors or household bills. This is not always the best option.

Effects of Over-Indebtedness

The personal effect of struggling to repay debt can be far reaching. Sometimes a lack of financial awareness can lead to stress, depression, anxiety, mental health problems, relationship breakdown and even suicide.

Raising Financial Awareness

The Government recognise the need to raise financial awareness amongst the general public. The financial cost of debt is not only on an individual level, but there is also a cost to society in general.

People who experience stress due to their situation, will probably seek advice from their GP and may take time off work, therefore, this has an effect on already hard-pressed NHS and productivity due to absenteeism.

People who have had homes repossessed need to be re-housed, generally by the local Council. Those who seek legal aid due to debt issues also incur a cost to the taxpayer.

The Solution before the Problem

Will raising financial awareness alone tackle the issues of debt problems? It helps for people who are already struggling with debt, but are there other areas the Government should be looking at?

If you pay your creditors on time, regardless of what it takes to pay them, you are classed as a good payer and therefore, not a risk when it comes to additional borrowing. In fact, your finances could be in turmoil and you could be taking money from one card to pay another but you may still obtain even more credit.

The freedom creditors have to advertise loans, credit cards and mortgages could be challenged as well as how decisions are made regarding lending.

If people, who are currently in financial difficulty, find they cannot borrow more money, they should be made aware of the free financial advice that is available. Free Debt Management Companies such as Payplan can negotiate repayments with creditors so that monthly payments are reduced and become more manageable.

Nicola Bullimore has been working with people who have debt problems for a number of years. For more information regarding debt issues, please visit our Debt Questions website.

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Debt relief - Relief from medical bills

They say an apple a day keeps the doctor away; yeah well so does having no medical insurance. Many of you reading this right now may be thinking I'm only kidding but the alarming fact is that 43.6 million American's are walking around right now with no medical coverage at all. That is nearly 16 percent of our nation who sacrifice their annual physicals and rely on self-diagnosis of minor ailments, which may be indicative of bigger problems. I only know this because I'm one of those who haven't been to the doctor since my college housing required it and I have yet to jump through all the hoops it takes to obtain a reasonable coverage program.

Is this possibly the latest hobby for thrill seekers? The latest craze for those who like to live on the edge? No, in fact I would emphasize the fact that with no medical coverage I've become quite the germophobe and will rarely be found without my two best friends instant hand sanitizer and my big ol' can of Lysol. The time I spend each week on WebMD and the money I lay down for my vitamins is a story for another day. The sad thing is I was never like this prior to acknowledging the huge out of pocket costs that accompany an uninsured visit to the doc. I was never afraid of cutting my hand open on a piece of unbroken glass or to nervous to drive during rush hour traffic in fear of risking an accident which would surely involve major injuries.

So maybe I'm exaggerating a little on that last one but the point here is with no medical insurance, you can either watch your back or pay the gianormous fees that doctors are allowed to charge. Of course you will then have to watch your back from all the creditors who will be out to get you and just might do things to you that doctors can't fix. What is even more worrisome is the types of occupations that do not offer medical coverage these days and the growing number of people being required to insure themselves. A brief study (involving me walking around the mall with a clipboard- and looking very official might I add) exposed that its not just part time retail workers who have to scrounge the bottom of the bargain barrel for leftover HMOs.

The list included occupations ranging from a drycleaner's store manager (who had to buy her own coverage) to a fellow writer for a local newspaper. Respondents who toped the list however included a pre-school teacher (I was under the impression that a job of that service would most definitely merit some form of benefits) and a construction worker (but as long as he never gets sick and only gets hurt on the job he's perfectly safe)!

We are so lucky to live in a country where all the best technology and medical research are at our dispose; unfortunately the flip side of that coin makes these resources virtually inaccessible to so many of us. Lets face it though, not all ailments just "go away" and Nyquil may indeed help you get your Z's but it certainly won't do the trick against any form of meningitis. Sometimes, you just have to break down, throw up the white flag and make a visit to the doctor or even worse, the dreaded emergency room. Now I've had my fair share of jaunts to the ER and don't get me wrong, I would never complain about the care and attention I received, the doctors and nurses in those places put up with more than I could ever imagine. But from my experiences I will say that the ER is one of the few places where even in today's politically correct atmosphere, judgments fly and assumptions are a way of life.

Sure there are some alternatives such as a doc-in-the-box or free clinic but in the absence of insurance even these can get pricy. For those out there who weren't in the mood to wait out that stabbing pain on the right side of your lower abdomen or didn't have enough chewing gum in the house to fashion your own cast when you broke your ankle don't be afraid to reach out and ask someone for some assistance.

Find someone to contact because aside from becoming Canadian citizens and signing up for their free health insurance it looks like our only other option is to sit tight and wait for Congress to come to our rescue with a bill forcing employers to cover their employees (better not hold our breath on that one). For more information on who you may contact, just follow the link and I wish you all the health (and hand sanitizer) in the world.

Katie Spencer is a contributing writer for a number of international financial journals both online and in print. Katie has been delivering financial education to the public in a variety of areas to include budgeting, credit and debt management, and money saving tips. Recently, Katie has been in partnership with a national educational foundation to deliver financial advice to American consumers via the web.


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Consumer debt and its effects
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