Good forward planning essential for repaying debts
Released
on: December 23, 2008, 7:04 am
Press
Release Author: Gregory
Pennington
Industry:
Financial
Press
Release Summary: Debt management company Gregory Pennington have
emphasised the importance of forward planning with regard to debt
repayments, and have advised anyone currently struggling to repay
debts to seek professional debt advice.
Press
Release Body: Responding to a new report from PricewaterhouseCoopers
suggesting that over a quarter of borrowers are worried about
their ability to repay debts, debt
management company Gregory Pennington has
advised consumers that all forms of borrowing should be planned
well to ensure that the debts can be repaid, and has encouraged
anyone struggling to repay their debts to seek professional debt advice.
The
Credit Confidence Survey by PricewaterhouseCoopers suggested that
over one in four people (27%) are worried about their future ability
to repay debts, while 20% of UK credit customers are worried about
the future availability of credit – suggesting a reliance
on credit to pay off existing debts.
16%
of those questioned reported that they were already struggling
to make debt repayments, “very few” of whom have considered
options to restructure their debt, such as a debt management plan.
The
report also found:
•
Unsecured borrowing has actually risen by 6% compared with last
year – although secured borrowing has fallen ‘dramatically’
• Insolvencies increased by around 9% in the third quarter
of 2008, compared with the second quarter
• Every working hour, over 100 adults enter into bankruptcy,
an Individual Voluntary Arrangement (IVA) or start a Debt Management
Plan
A
spokesperson for Gregory Pennington commented:
“Although the survey on the whole represents good confidence
levels amongst a lot of borrowers, the fact that over one in four
borrowers are worried about their future ability to repay debts
highlights the importance of future planning when it comes to
borrowing.
“One
of the most important steps for borrowers to take before taking
out a loan is to establish how much they want to borrow and how
much they can afford to repay each month. There is also the matter
of how long the repayment terms should be – the longer the
terms, the more time there is in which the borrower’s circumstances
could change, and a change in circumstances could affect their
ability to make repayments.
“Of
course, there are many cases in which unforeseen circumstances
prevent borrowers from repaying their debts, such as unemployment
or a fall in earnings.
“Whatever
the reason, anyone struggling to repay their debts should take
decisive action as early as possible. A debt adviser can provide
information on a range of debt solutions that can help to minimise
monthly outgoings, which could be crucial to those hard-pressed
by the current economic situation.
“For
example, a debt management plan through a professional debt adviser
can enable people to pay back their debts at a more manageable
pace, while reducing or freezing interest and other charges. However,
this can mean the debts take longer to repay than originally planned.
“Alternatively, a debt consolidation
loan can ‘group together’ the borrower’s debts, meaning they pay
one creditor instead of many. A debt consolidation loan can also
be spread out over a longer period of time than the original debts,
meaning monthly outgoings are reduced – although this can mean
paying more interest in the long run. However, if the borrower
is consolidating high-APR debts such as credit cards, the lower
interest rate can often mean that less interest is paid overall.
“For
more serious debts, typically of £15,000 or higher, an IVA
(Individual Voluntary Arrangement) might be the most appropriate
option. An IVA involves working with an Insolvency Practitioner
to draw up a proposal for lower debt repayments based on an amount
that the borrower can afford. This normally continues for five
years, and on successful completion the remaining debt is considered
settled.
“As
with anything debt related, it’s always advisable for borrowers
to speak to an expert debt adviser before deciding on the appropriate
solution for their debts.”
Web
Site: http://www.gregorypennington.com/
Contact
Details: Melanie Taylor
0845 056 6480
melanie.taylor@gregorypennington.com
Pennington
House
Carolina Way
South Langworthy Road
Salford
Greater Manchester
M50 2ZY
2012
