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Debt News

Credit card companies face losing billions in write-offs

Written by Thomas Molley

IRISH lenders may be forced to write off credit card bills as debt rises and borrowers struggle to pay them off.

The International Monetary Fund expects 7pc of the €1.34tn of consumer debt in Europe will be lost as people default on credit card debt, the 'Financial Times' reported. In the US, the percentage of consumer debt that will be lost is double this, it added.

The number of people contacting the Dublin-based debt advice charity Myvesta about credit card problems has doubled in the past eight months and their debts have increased as well.

The average credit card debt of somebody in trouble is now €8,009 this year compared to just €3,833 in 2006 as the country's appetite for debt rockets.

"The whole culture of borrowing for lifestyle has been rampant both here and in the UK," said Sean Tyrer    , head of Myvesta. Borrowing on credit cards has been far more subdued elsewhere in Europe where there is still a stigma attached to going into debt, he added.

A spokesman for the Irish Banking Federation said earlier this month that credit card providers were forced to raise interest rates because the providers had to cope with greater numbers of people defaulting on their credit card debts. AIB, Ulster Bank, Permanent TSB, Bank of Ireland, Halifax and National Irish Bank have either increased the rates they charge on their cards or imposed higher fees in recent months, according to an Irish Independent survey.

The higher charges were introduced despite a record six falls in European Central Bank interest rates. The number of credit cards in Ireland is rising, touching 2.4 million in May, but the monthly amount being borrowed has fallen to €927m.

Payments on credit cards exceeded new spending in May and outstanding indebtedness fell by €23m during the month, the Central Bank said recently. Payments on credit cards has exceeded new spending every month in 2009 to date, and this led to the annual rate of increase in outstanding indebtedness on credit cards to slow to 0.1pc in May.

This is the lowest annual increase in outstanding credit card indebtedness since records began in 2002.

This article appeared on 'independant.ie'  on Tuesday 28th July 2009 

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Thousands Enlist Help Of Private Debt Management Companies

Wednesday, July 01, 2009

Tens of thousands of Irish people in debt are enlisting the help of private debt management companies to renegotiate new repayment terms with their lenders.

National Debt Relief, a British firm set up here last August, has dealt with more than 12,000 customers, according to its director.

Another debt help firm, Debtadvice.ie, said it too was dealing with "very significant volumes" of people in debt.

A spokesman for Debtadvice.ie said people were being "overwhelmed" by debt and that going bankrupt in Ireland was not an option as legislation was "outdated and draconian" compared to the rest of Europe.

He said people in debt were seriously considering travelling to Britain to petition for bankruptcy as they could potentially free themselves from debt after a year.

"Bankruptcy tourism is something that a lot of people are seriously considering."

The director of National Debt Relief warned going bankrupt here had "severe consequences".

"If someone in Ireland declares themselves bankrupt they can remain caught in the process for 12 years more. In England, a bankruptcy can end after as little as 12 months and the slate is wiped clean."

Mr Duffy said it was complex for someone to get back on their feet if they declared themselves bankrupt here.

"It is a nightmare, and people can find it very difficult to access credit afterwards," he said.

Mr Duffy said the firm had set up here due to a large number of enquires to a parent company in Britain.

He said people were reporting big delays with the State-financed Money Advice and Budgeting Service, and needed instant help to manage their debt.

Mr Duffy urged the Government to introduce new rules to help people formally address debt problems.

"We want the Government to introduce legislation to help Irish people to formally address their debt problems without having to go bankrupt," he said.

 

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Solutions To Out-Dated Laws in Ireland Surrounding Debt Issues

Surviving the recession is hard enough without trying to keep up with the re-payments on an existing loan, many people are often left frustrated and confused when dealing with debt problems.

Purchasing everyday items on a credit card is a clear sign that you or someone you know may have debt issues. Many people will admit they have issues with debt but continue purchasing items on their credit card without realising the damage they are causing on top of their pre-existing debt, which may result in some borrowers not being able to afford the repayments on that debt. 

Unfortunately due to Irelands out-dated laws there are significantly lower options for debt related solutions compared to other countries in Europe and USA. Poor debt enforcement laws meant that people in Ireland have not been able to seek proper protection from the courts, resulting in over 1000 people being sent to prison between 2002-2006 for debt-related offences. By re-visiting the law surrounding bankruptcy in Ireland it would be beneficial to adopt a similar procedure from the UK in which borrowers owing a sum of 1900.00 Euros or more can apply for bankruptcy which would last for a full year, after which the debts are no longer repaid.  

A normal reaction for many borrowers with poor credit history who owe money to one or more debt collecting agencies is to merge all their currents debts into one consolidation debt loan. Although this offer is attractive to many of its customers, it can in almost all circumstances increase the final amount of debt you re-pay, especially if you have poor credit history or have existing discrepancies’ against their name. Visiting the ‘Debt Advice Team’ at can help you feel at ease with FREE expert advice and friendly qualified solicitors who are willing to help reduce the debt problems you may be experiencing. By filling in a few simple details about your debt they can steer you towards the right direction of a debt free life.

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Debt Management Agents Needed

The Debt Advice Team are actively recruiting debt help advisors to join the team on a client introduction basis. Ireland has a real need for good debt solutions and we are interested in speaking with people that have a desire to help people that have debt problems and would like to earn a good residual income from the fee sharing programme offered by the Debt Advice Team at Breathe Financial Management Ltd.

For more information please call Sean Tyrer on 01657 5602
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Credit Card Companies To Give APR Warnings

Credit card companies may be forced to warn customers that they are charging them high rates of interest under a revision of the consumer protection code being considered by the Financial Regulator.

New provisions to come into effect next year mean moneylenders will have to warn their customers that their loans are high cost. Any moneylenders who charge more than 23pc annual percentage rate (APR) for a loan will have to warn their customers in writing that they are high-cost lenders.

Credit card lenders may also have to tell customers with debt problems how to get access to debt counselling services to that can assist them with their financial problems.

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Interest Rate Falls May Be On The Cards

It is possible that the worst may soon be over for over extended consumers following signs that interest rates are on the way down and price rises will peak in the next few months.

However, it will probably be next year before the benefits come through, to judge from the cautious stance of the European Central Bank and analysis of a surprise drop in inflation last month.

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Borrowing Growth At Lowest In 5 Years

The rate in which consumers and companies have been borrowing from financial institutions in Ireland is at its slowest point in over 5 years, according to the latest report from the Central Bank.

The annual growth rate in private-sector credit last month was 14.3%, down from 15.1% in May.

The report also demonstrates that the rise in mortgage borrowing is now at its lowest level in almost 17 years, while the annual rate of increase in outstanding credit card debt was down slightly to 11.4%.

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The Debt Advice Team - Help To Solve Debt Problems



Don't Let Debt Problems Get You Down

Debt problems effect people in many ways and the role of the Debt Advice Team is to ensure that you receive  immediate debt help when you have reached the point were you are unable to meet your monthly credit payments and are worried. The Debt Advice Team have been helping people with debt problems for 8 years and we are an established and highly respected organisation. View information about our organisation and the free and ow cost services that we offer by clicking here -  Online Video Information Clips.

Free Telephone Debt Help Or Free Local Meeting With A Team Member

Whether you prefer a confidential telephone conversation or would like a home visit by one of our local representatives we are here and happy to provide you with all of the help and support that you need.

Professional Debt Management and Token Payment Plans

We are the Debt Advice Team and we help thousands of people in Ireland that have experienced money worries or debt problems. The people that the Debt Advice Team assist range from construction workers and IT professionals to single mums, solicitors, mortgage brokers, civil servants and the increasing number of people facing redundancy as the economy takes a downturn. Debt problems can affect anyone at some point in their life. Debt does not discriminate.

We are very well respected in our field and we have extensive experience of assisting people with real  debt help and solutions to debt problems in Ireland and our team are a friendly and approachable bunch. We provide a confidential, professional and effective service to the many thousands of people in Ireland that need debt help and intervention at a time in this economic climate when personal stress levels can be very high.
The Debt Advice Team at understand that debt problems are often not just about money issues. Debt problems can serve to undermine many aspects of a persons life including personal relationships at home, work life and a persons overall confidence. This is why the help and support we offer often extends further than fixing debt problems and providing ongoing debt help and advice to our clients.

Often we are thanked by our clients for the benefits that our early intervention has brought about because they have become closer to their partners as a result of sharing their financial worries and pulling together to solve a debt problem with our support. In fact, the Debt Advice Team regularly receive 'thank you' letters from the many people in Ireland that we help.

Members of the Debt Advice Team are regularly called upon by the Irish Media to provide expert help and assistance to national newspapers when they have run news articles on how to deal with and get out of debt in Ireland.

The Debt Advice Team prides itself on how we always treat people that turn to us for debt help and advice with the utmost respect and confidence. As some members of the team have, in the past, themselves suffered from the stress that money worries can bring about we understand first hand the emotional strains that debt problems can bring about.

The good news is that debt problems can be resolved with help and intervention and contacting the Debt Advice Team is often the first solid step towards solving your debt problem and stepping forward towards a healthier financial future.

To speak with a member of the Debt Advice Team please feel free to call our advice line on 01657 5602 now or alternatively chat online using our secure, online chat facility by clicking the 'Live Help' button at the top right of this page. You can of course simply fill out a quick contact form by clicking here and tell us about your debt problem and a member of the Debt Advice Team will contact you at a time that you request.

If you have visited this site and are unsure about your situation then please do make contact with us in which ever way you feel most comfortable with as we will be happy to give you good honest advice about your options and as such you will be better informed about what course of action you would like to take next.

Debt Consolidation Loans

The first reaction by many people when they realise they have a debt problem is to consider debt consolidation via a larger loan to be the answer. This is often a very dangerous strategy as debt consolidation loans whilst, on the face of things, may appear attractive they often serve to simply make a debt problem worse as debt consolidation loans effectively will increase the overal level of debt that is outstanding.

Debt Consolidation Loans - The Dangers

Debt consolidation loans are heavily advertised in the media by loan companies. Often debt consolidation loan companies will advertise the fact the people with  a poor credit history can still apply for their debt consolidation loan stating that even if that person has court judgemnts they may still qualify for the loan, Such companies may typically charge a higher interest rate when arranging debt consolidation loans particularly if the individual applying for the loan has a bad credit history or other debt repayment discrepancies against their name.

It is always important to understand what interest rates are being charged by the loan provider and to have a clear knowledge as to just how much the total amount of the debt consolidation loan will be if you decide to apply for a loan to consolidate your debts.

The Debt Advice Team are contacted regularly by people in Ireland that have opted to take out a debt consolidation loan only to realise that the loan has not solved their debt problems and are now in a situation were they can't afford to pay the debt consolidation loan at the agreed rate and now owe more money than before they took out the loan. This is a very common mistake that many people with good intentions unwittingly make.

Are Debt Consolidation Loans Ever A Good Idea ?

Although the Debt Advice Team generally do not recommend debt consolidation loans as a positive debt solution as generaly speaking a person can not 'borrow themselves out of debt', sometimes debt consolidation loans can be used as a effective tool as part of a wider debt management strategy.

Debt consolidation loans can sometimes be used effectively to pay of more expensive forms of credit, such as credit cards, or store cards, providing the APR of the debt consolidation loan is significantly lower than the credit facilities a person is looking to pay off. It is worth remembering though that although the debt consolidation loan may be used to pay off credit card debts for example the actual outstanding amount of the debt consolidation loan is stil likely to be higher then the total amount outstanding on the credit cards at that point in time when the loan was taken out.

The benefit of using a debt consolidation loan in this scenario is likely to be the individuals ability to reduce monthly debt servicing costs and free up some spare cash each month that could be used to pay manage other bills or debts that the person may have. Again, this will only be the case if the debt consolidation loan repayments are significantly lower than the debt servicing payments beforehand. The key point here is to look at the numbers involved very carefully before committing to taking out a debt consolidation loan.

Debt Consolidation Loans and the Credit Crunch

Recently, many people have found that they have been refused a debt consolidation loan by the loan provider when they have applied. The impact of the global credit crunch has played a large part in the fact that many people are being refused loans in Ireland and in other countries.

This is because the credit crunch has served to make lenders much more cautious as to who they wil provide loans to and also how much money the are willing to lend. This has resulted in lots of people having to consider other debt management options such as the Debt Repayment Plan service operated by The Debt Advice Team in Ireland.

Speak To The Debt Advice Team

If you are considering applying for a debt consolidation loan in an effort to assist with any credit or debt issues then please feel free to chat with a member of the Debt Advice Team.

Tell us about your circumstances and we will be able to assist you in understanding what options are available to you in order to get on top of a debt related problem. Please cal us free of charge on the number below:

Debt Advice Team Free Phone Number:  01657 5602


Alternatively, you can start a secure online chat by clicking on the 'Live Help' button on the top right of this page. or simply complete our quick contact form by clicking here and one of our advisors will contact you at the time and method that you specify.

Popular Articles, News and Consumer Information

The Role of The Account Manager in the Debt Advice Team in Ireland

Basically, the debt repayment plan procedure has been designed to assist the person with debt problems of the requirement to negotiate directly with their creditors, it is the job of the debt counsellor in the debt advice team to act as the mediator between our clients and their creditors.  We receive an arranged monthly payment from our client then make agreed pro rata payments with their lenders and creditors.

Account Managers with the Debt Advice Team spend large parts of their time negotiating payment offers, on behalf of our clients, with their creditors. Mostly, creditors are understanding and sympathetic and they can accept an offer if we can show that it is realistic and is supported by a detailed analysis of our clients budget and take into account all other unsecured debts.

Creditors do have set policies and procedures on the minimum level of repayment they can accept but they will always give consideration to the requests we make and if at all possible we work together to get an arrangement in place.

Once the arrangement is in place then the onus switches to our client to keep up with these payment arrangements and make the agreed payment on time. Creditors set up a monitoring system to check that the payments are received on a regular monthly basis and as long as they get the payments everything is fine.

However if the individual does not make the agreed payment then we cannot send it on to the creditor. These situations are rare but we have seen a couple of instances where a client has unfortunately let all the work undertaken on their behalf amount to nothing because they do not stick to the plan for no sensible reason. The result is often that the persons money problems get worse and their creditors become less willing to negotiate new repayment terms.