The Debt Advice Online Blog

With Christmas less than a month away, the shops are already in hyperdrive with 20 – 25% sales to lure you in ahead of Christmas. Pressure to buy great presents, and make it a happy time always makes it difficult to balance your budget.

Temptation is everywhere. The message seems to be to buy presents with big discounts, and if you can’t afford it, then a new credit card deal is ready to help out.

Don’t think “I just need to get through Christmas” because January is just around the corner and it is usually the cruelest month for bills.

We decided we would get together and come up with our Credit Crunch busting Christmas ideas to make a great Christmas without being burdened by greater debts .

Firstly it’s time to start thinking like your grandparents and figure out how you can spend time rather than money on your presents. Perhaps get a favourite photograph framed. Better yet, make the frame yourself. You’ll be surprised that the reaction from the recipient will usually be greater than if you waltzed into a high street and bought the most expensive thing you could afford. Maybe think about making Christmas decorations yourselves. Time to get all Blue Peter.

If you are asked for present ideas for yourself, we recommend you ask for vouchers. That way, once the dust of Christmas has settled you will be able to pick up some bargains in the January sales. As you probably know, you would only have to wait one or two days for the sales to start anyway!

If this the time you usually book your summer holiday. We recommend you hold off until nearer the time. With the travel industry desperate for customers, you’ll be sure to get some last minute bargains in 2009, and you’ll help your wallet at this expensive time of year.

Some smaller tips that will help keep costs down. Make sure you don’t leave lights on in rooms not being used, or have the heating on too high if you can help it. You could save hundreds on your next quarterly bill.

The biggest gift we recommend you give yourself this Christmas is the gift of being debt free. Whether its credit cards, loans or worse, you will be glad to get rid of that horrible feeling you get when someone mentions Credit Cards or when you hear more depressing news about the economy.

If you need to talk to someone about getting out of debt, then hop over to our advice page and find out a bit more about it.
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With the economic crisis deepening, I am probably not the only one to notice a worrying trend, that the amount people owe on their credit cards is actually increasing! According to the Bank of England’s statistics, the UK’s consumer debt has risen to record levels this autumn, having risen by £300m between August and September alone.

I don’t know about you, but I’m worried. This is a terrible trend given the Credit Crunch we are in. The one thing you don’t want to do in a time like this is to get further into debt!

I know there are many people out there who are struggling to make ends meet, and just to feed their family and pay the bills, they are living beyond their means and resorting to extra loans or credit cards to temporarily get them out of trouble. But as I’m sure you know, this will lead to an ever increasing spiral of debt. Couple that with the inevitable recession we are about to enter and it could spell disaster for many people.

So what can you do about it?

First of all you, the simplest step is to take a good look at your outgoings and see if you can cut back on items that are not essential. You’ll be surprised at what a difference that can make.

If you’ve cut back all you can and still you are falling short each month, perhaps your lender is increasing their interest rate on your existing loans or your credit card’s introductory period has expired, then you can think about consolidating your debt into one lower monthly amount. These so-called Debt Management plans are very useful to a lot of people stuck in real debt trouble.

A good debt advice service will recognise from the information you give them that you are struggling with your payments and will propose a plan whereby you only pay what you can realistically afford once your essential costs have been factored in (mortgage, utilities, food etc). Your lenders then get a copy of your financial statement to ensure that you are paying the maximum you can afford to pay once your essential living costs are factored in, and then you are able to make ends meet once more.

If you are looking for this kind of debt advice, then there’s some fantastic information on our main site under Debt Management.

That’s all for now, but in the meantime, I know times are getting tough for everyone, myself included, but try to decrease any debts you have.

You’ve probably heard the term “Credit Crunch” so many times that you ought to have a pretty good grasp of what it means. But do you? Most of my friends, when asked, were stumped to come up with a satisfactory answer. The term is relatively new and is still considered slang by some quarters, so a good description is hard to come by. So putting on my heroic hat for a moment, I have put together a little handy guide that should hopefully clarify a few points for you.
OK, so lets start with a basic description. A Credit Crunch is a sudden reduction in the amount of cash available from loans (or credit), or from the sudden increase in the cost of obtaining loans from banks.

So, why might this occur? There are a number of reasons why banks may suddenly increase the costs of borrowing or make borrowing more difficult. It may be due to an anticipated decline in value of the security used by the banks when issuing loans, or even an increased perception of risk on the subject of the solvency of other banks within the banking system, which we have seen plenty of lately. It may be due to a change in monetary conditions (for example, where the central bank suddenly and unexpectedly raises interest rates or reserve requirements) or even due to the central government imposing direct credit controls.
A credit crunch is often caused by a sustained period of careless and badly chosen lending which results in losses for lending institutions and investors in debt when the loans turn sour and the full extent of bad debts becomes known. These institutions may then reduce the availability of credit, and increase the cost of accessing credit by raising interest rates. In some cases, lenders may be unable to lend further, even if they wish, because of earlier losses.

The crunch in general is caused by a reduction in the market prices of previously “over inflated” assets and the financial crisis that results from the price collapse. In contrast, a similar sounding Liquidity Crisis is triggered when sound businesses find themselves temporarily incapable of accessing the finance it needs to expand or smooth its payments. In this case, accessing additional credit lines and “trading through” the crisis can allow the business to navigate its way through the problem and ensure its continued solvency and viability. It is often difficult to know, in the midst of a crisis, whether distressed businesses are experiencing a crisis of solvency or a temporary liquidity crisis.

In the case of a credit crunch, it may be preferable to sell or go into liquidation if the capital of the business is insufficient to survive the post-boom phase of the credit cycle. In the case of a liquidity crisis on the other hand, it may be preferable to attempt to access additional lines of credit, as opportunities for growth may exist once the liquidity crisis is over.
A prolonged credit crunch as we may be currently experiencing from the excesses of the sub-prime market is the opposite of cheap, easy, and plentiful lending practices (sometimes referred to as “easy money” or “loose credit”). During the upward phase in the credit cycle, asset prices may experience bouts of frenzied competitive, leveraged bidding, inducing hyperinflation in particular asset markets. This can then cause a speculative price “bubble” to develop. As this upswing in new debt creation also increases the money supply and stimulates economic activity, this also tends to temporarily raise economic growth and employment.

Often it is only in retrospect that participants in an economic bubble realize that the point of collapse was obvious. In this respect, economic bubbles can have dynamic characteristics not unlike Ponzi schemes or Pyramid schemes which I hope to cover later on if you’re feeling brave.

I personally like the quote from the economist, John Maynard Keynes, when he said in 1931 during the Great Depression: “A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.”
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If you get a letter, telling you someone is making a County Court Claim saying you owe him or her money, do not be alarmed. The Court will decide whether you have a debt to pay - and if so, how you should repay it - in a way that is fair to everyone.

The purpose of a County Court Claim
Someone you owe money to (a ‘creditor’) can take a County Court action against you to claim the money. If you pay the amount outstanding, you can avoid a hearing or judgment. If not, there will be a simple court hearing in private. You can attend if you wish, or just send the information the court asks for by post.
The court does not find anyone ‘guilty’ or ‘innocent’. It looks at the facts and decides whether you owe any money, and if so, how you should repay it.
Under Scottish law, the Sheriff Court deals with claims differently.
County Court Claim Form
The court will send you a ‘Claim Form’, showing how much the creditor says you owe them and the details of the claim (though these details can be sent separately up to 14 days later). This form gives you the opportunity to explain your situation to the court.
Replying to a Claim Form
You will receive an Admission Form with the Claim Form, asking you about your income and outgoings. On the form, you can make an offer to repay the debt (or a lower amount if you think you owe less than the creditor claims).
If you do not make an offer and the court decides against you, it may say you must pay either the full amount or monthly payments.
You have 16 days from the date of the postmark to send the form back to the court. Or you can submit an ‘Acknowledgement of Service’ or a ‘Defence Form’, depending on how you want to proceed
County Court Judgments (CCJs)
After the court hearing, the court may issue an order saying you must repay the debt. This order is called a CCJ and will either be for the amount agreed between you and your creditor or, if you can’t agree, a payment set by the court.
If you have judgments from more than one creditor, the court can combine your debts and make an ‘administration order’ - saying you must make a single payment every month to be shared by all your creditors.
What to do if you can’t pay
If you pay nothing, or do not keep up with the payments, the creditor can ask the court to take steps to make you pay, in which case you may have to pay more costs. If you genuinely cannot pay, even in stages, you can ask the court to:
• change the amount of the regular payments
• suspend the order until you can afford to pay
County Court Judgment (CCJ) records
Unless you pay the full amount of the judgment within one month, your CCJ will be recorded on the Register of County Court Judgments for six years.
Organizations such as banks, building societies, and loan companies use the registered information to help decide whether to give you credit or loans, like a mortgage.
What to do if you disagree with a CCJ
If you have a genuine reason to disagree with a CCJ you can ask, the court not to apply it straight away (’set it aside’). You may have to pay a fee for this. If you don’t have a genuine reason, your application could be treated as wasting court time or even perjury - serious offences that can incur fines and prison sentences.
If the judgment is set aside, things go back to the start of the claim. You have another chance to reply to the Claim Form, and explain your situation. The CCJ is taken off the County Court Register until a new judgment is made.
Changing your credit record
Some companies charge for credit repair services that claim to help you get CCJs taken off the register - get free, independent advice first before using one of these companies.
You can get incorrect information removed yourself by paying £2 to see your credit file and asking for mistakes to be corrected. Remember though, a judgment is only taken off the register if:
• you paid it in full within one month
• it’s set aside by the court (see ‘If you disagree with a CCJ’ above)
You can search the record for any CCJ registered against you and have it marked ’satisfied’ if you have paid off the debt.
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With so much in the news about the state of the worlds banks, you could be forgiven for trying to fix the worlds problems and not concentrating on your own situation. If you’re one of the millions in this country with a little more parked on your credit card than is healthy you may have heard that debts incurred on UK credit cards before April, 2007 may actually be written off under certain circumstances. Yep, that’s right. Written off! We here at Debt Advice Online firmly believe that if you borrow money you should pay it back. No questions asked. We also believe that certain credit card companies have been far too exuberant when it comes to hiking their interest payments after the low or zero % introductory period, which has given them a less than favourable reputation.

So here’s the deal. Your credit card company is required to produce an original copy of the agreement that it had with you, and if this credit card company no longer has this document then the debt incurred on the credit cards becomes unenforceable by law. Now before you get all excited, do not misunderstand what is meant by this. The debt that you have on your credit card is not wiped off. It remains there, but the credit card company cannot legally process any claim for it.

To put it another way, the debt on your credit card stays put, but the credit card company cannot legally ask you to repay it unless they find your original agreement. If you are the kind of person who can bide their time, then you will probably like to know that there is an act of law called the Limitation Act of 1980, which is a six year rule. Under this Act the debt on your credit card becomes non-existent after six years from the last time it was acknowledged.

There are several agencies that can take up your credit card debt problems, and offer to have your debt written off. These agencies provide you with this service against a fee, while they deal with your credit card debt within the legislation which controls such claims. Now I have to officially remain impartial here and not mention any names of companies who have a darn good team who could help you if you so chose. Ahem.

You probably won’t be surprised to learn that since 1995, write-offs of credit card balances rose substantially from £0.1 billion to £1.6 billion in 2003.

It was also the nineties that saw the start of the sharp rise in credit card debts, with the rise flattened to around £1 billion, however if we factor in debt write-offs which rose sharply during 2001 and 2002, the overall debt was pushed up to around £2 billion.

Generally speaking, given the current climate, you will want to get on top of any credit card bills you have especially if those bills are mounting each month. It is wise to look into the possibility of having your credit card debt written off, but if that isn’t possible then working out a sensible repayment plan could be your next best alternative. Debt Advice Online has some great people who can walk you through your options, plus they can help you get the creditors off your back if you are getting constant phonecalls and letters and it’s getting too much for you to cope with.

You would think that the banks would want you to start saving rather than borrowing more money to ensure they had the safety of capital in their coffers, but even today, with not just banks but entire countries going under, you can still pick up a friendly looking credit card with 0% APR for the first sixteen months! Whilst that is a little crazy to my mind, you may think we’ve got it good when in some countries banks send unsolicited credit cards to people with instant balances of 1000’s of pounds even before they’ve signed anything. That is just asking for trouble!

So take care with your credit card, try to get it repaid on time, paying more than the minimum balance, so you actually pay back more than the interest, but also look into clearing your credit card either by yourself or if your not feeling confident with the paperwork try one of the specialist agencies.

Till next time.

Michael Ford

What is Equity Release?

If you are in need of funds, and you have a home in which you live, you can generate an income or raise lump sum amount through equity release of your home, and continue to live in your home as well. People in the UK often remortgage their home they are living in. This is done by transferring the outstanding mortgage debt on the property to a new one. By doing this you do not need to move away from your home. Further, it is not necessary for you to find a different lender, since you can easily get your second mortgage with your existing lender. This way you can raise funds for your other requirements, provided the home that you are remortgaging is worth more than your existing mortgage debt. Before you venture into equity release, you should consider all aspects, since the mortgage that you have, and your would be second mortgage are two of the biggest financial commitment that you are likely to have.

Why do you need equity release?

In remortgaging your home, you could have two reasons to do so. One that you wish to raise a comparatively lower interest funding to pay off high interest borrowings, or have renovations done to your home. Your home might be costing more than your outstanding loan, and you want to take advantage of this in form of some of the equity in your home. By taking out a second mortgage on your home, you may be able to raise funds at a better interest rate, substantially reducing your monthly outgoings, and financially gain considering the present credit crunch prevailing in the United Kingdom.

In recent times, the mortgage market in the UK has been facing quite tough challenges, with a decrease in availability of mortgage products. This has been due the stringent financial crunch existing in the country. Lenders have become very careful with lending, and borrowings have become scarce. Even it is available, interest rates have gone high as a measure of lending risk protection. Therefore, it has become difficult for a borrower to find loans charged at suitable interest rates. However, if you decide on remortgaging your home, it would be worthwhile to look for availability of better deals before deciding on a lender. This would mean that, you would be looking for lower interest rates, affordability of your monthly outgoings against your borrowing, and the value that you get on your equity release.

If you have short term debts, or if you wish to have renovations done, one better way to raise cheaper loan is through equity release of your home, provided the value of your home is presently much higher than your existing mortgage or collateral. People also raise funds in this way to pay for their holidays, or a new car, but mostly equity release is used to pay off high interest loans, or pay for the home renovation expenses. With all said and done, by remortgaging, you are risking repossession of your home if you do not pay your installments towards your borrowings regularly.

How do you gain?

Your credit card outstanding balance, your personal loan, overdrafts, and all other such short term loans carry high interest rates. The debts have mounted up and high interest goes on accruing on the outstanding. At one point of time you find the repayment to be hopeless. You would go for equity release, and then would have your short term debts consolidated and paid off. By this you will save on interest, and your monthly outgoings will be well within your reach. What you will be doing is to replace your high interest unsecured short term loans with a much lower interest loan on your house in the form of equity release. By doing this you will be getting more financial freedom on your installment payments.

Second mortgage, or remortgaging your home is a better way to get rid of your bad short term debts, and mostly people go for equity release for this purpose. It is a sort of financial recovery that you go through, gaining substantially on interest payments, and saving on monthly outgoings. With short term high interest loans, people very often find themselves in a situation where they are not able to meet their financial commitments. This could have various reasons. An illness in the family could mean larger medical bills, and as you try to meet those expenses, you default on your short term loan repayment schedule. Once you do that, the interest accruing on your monthly outstanding becomes alarming. It is better for you to consider debt consolidation, and paying off the loans by raising funds through remortgaging your home.
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When you are not able to re-pay your debts due to your financial difficulties, you have certain solutions at hand. You can take up the matter with your creditors, and explain to them convincingly the matter of your financial instability, and let them make concessions on the terms on which the loan was given to you. You can negotiate the interest rate, and get the fees levied on the loan waived off.
The total outstanding balance could also be negotiated to an affordable level. Along with this, the lenders might consider bringing down the amount on your installment payments to make it easier for you. If you like, you could also approach your creditors through credit agencies, or a lawyer who takes up the matter on your behalf.

The second option is to sign on a debt management plan. In case you are going through a deep financial crisis, and you are not being able to re-pay your debts, you might consider taking advice from a credit counsellor. The credit counsellor might advice you to go in for debt consolidation, where all your debts are merged into one. This task is mainly done by credit agencies, which take up the matter with your creditors, and bring down your liability to an affordable level. In this case you pay only one installment every month to the credit agency, who distributes the money to your debtors.

There is yet one other option which is available in UK, where you actually write-off a part of your debt. You might have solutions to your debt problem through debt management or remortgages, but these would only provide you with a relief in interest rates, and waiving off of certain fees. These do not let you write-off debts, but in fact replaces one debt with the other. On the other hand, writing off debts provides you with greater financial relief. You may go and file for bankruptcy to write off all your debts, but the consequences may become severe, and this should be kept as a last resort.

The Individual Voluntary Arrangement (IVA) in the United Kingdom provides a solution to debtors, where you can write-off a large percentage of your debt, provided you are found eligible. The amount that could be written off depends upon your financial capability to pay back your debts. IVA is a debt relief solution which is backed up by the United Kingdom government. If you are going for IVA, there is one aspect which is very important. The IVA must be accepted by your creditors. Once your creditors accept IVA, it becomes legally binding, and this would mean that the amount of debt to be written off has been agreed upon, and cannot be changed by the creditors even two years later. You, as a debtor, are legally protected against this.

The draft of the proposal is generally drawn up by a licensed Insolvency Practitioner on your behalf, which is provided to you for your comments. After finalising the issues, the document is sent off to all your creditors. The creditors, however, besides rejecting or accepting the document, may want changes, and these changes would only be incorporated into the document after you have approved them. The Insolvency Practitioner has to make sure that you truly have a deep financial crisis in hand, and also that you are capable in keeping up with the payment of your debt after it has been partially written off. These have to be ensured by him before he makes his recommendations.

The process of writing off becomes legally binding as and when the creditors accept the terms. Though the creditors cannot change their minds regarding what they have agreed to, there could be problems in the arrangement if you fail to keep your part of the promised payment of installments. You and your creditors are legally bound by IVA, and it is an arrangement that has been done by the Insolvency Practitioner who is also responsible to supervise the arrangement as far as its smooth running is concerned.

The IVA contract ensures that you are not put under any pressure of paying more than what you can afford. The total re-payment of the consolidated debt has to be paid by you over a fixed period of time. IVA is an arrangement which is totally private, and it is kept between the people who are directly concerned with your debt. While your debts are being governed by IVA, you are allowed to take out fresh mortgage on your property if you so desire. IVA ensures protection of your home, and your employment.
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Do you have to make installment payments which you can no longer afford? Are you tired of the ever increasing balance on your debts? Are you worried that your debts will never get paid off?

Well there are ways by which you could manage to pay off your debts. Unsecured loans are dished out at a very high interest, since they do not require you to put any collateral against the borrowings. The installments are high, and if you default in paying, there are penalty interests put on to the outstanding balance, and late fees added. The outstanding of your debts bloats up and up, till it becomes hopeless. Unsecured debts, especially credit card unpaid balances, attract high APRs, and it is said that credit card APRs are one of the highest in the UK, if not the highest one.

People legitimately run into financial problems, and the effect comes directly on to the monthly installments for their debts. Illness in the family is one where you would incur expenses. If you are in the UK, you are somewhat lucky. There could be many instances where you would need money to be spent immediately, and you default on your debt payments. The result is that, you land up in a financial crisis, and your debt has grown by that time, becoming totally unmanageable. You are bewildered as to how you should handle your debts, and you become overwhelmingly stressed. You need a way out.

If you are cast strapped, you might go and consult a credit counsellor. You need to have an open discussion with him, letting him know your actual financial situation. The counsellor may advice you to go for debt consolidation, and sign for a debt management plan. He can also advice you to go in for IVA, which is the short form of Individual Voluntary Arrangement. Credit card dues could be written off, though not entirely, in certain circumstances. But this involves checking on the legal aspect of the dues that you have. So, armed with so many choices, you just might manage your growing debts.

Let me explain more what I have said above.

If you are considering debt consolidation, you ought to seek advice from a credit counsellor. The counsellor’s job is to look at your financial position, take an account of your outgoings from what-ever you earn, take into consideration of other financial factors, and advise you how to go about managing your debts. If found suitable, you may be advised to visit a credit agency who deals with debt management plan (DMP). Here again you need to open your cards and have exhaustive discussions regarding your financial matters. If your case is found suitable you shall be given an option of debt consolidation.

Under DMP, your matters regarding your creditors are taken up by the credit agency. They discuss matters with your creditors and try and reduce your debts by waiving off fees, such as the late fees charged on outstanding balance, bring down the interest rate, and also try and waive off some part of the debt balance. After having done all that, they let you know, and it is wise for you to check with your creditors the facts. The agency now goes for consolidation of your debts, and you sign on a DMP with the main understanding that you shall be paying one amount per month to the agency, who would distribute that money to your debtors.

The debt against your UK credit cards could be written off. Balances of Credit cards bills, where the credit cards have been issued before April, 2007, under some legal circumstances, could actually be written off. Legally speaking, the credit card company has to have the original papers of contract when claiming dues. If the credit card company does not have the original document, the claim is not valid. It is a six year rule. If the company does not claim within this period, the so called claim becomes non-existent. The thing that you should not misunderstand is the fact that, the debt that you have does not get wiped off. It simply means that your debt remains, only it becomes un-enforceable. This ACT came under force as from 1980, when this six year rule was introduced.
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Debt management program and a Scottish Church Deed are two separate things, and should not be confused with each other. The trust takes a more informal approach, and provides a conclusive step to let the creditor have his payments from his debtors over what-ever time it takes for the debtor to pay off his borrowings. This is a Protected Trust Deed, and is based on the proposal made by the debtor to re-pay the money that the debtor owes to his creditors.

Scottish Trust Deeds are applicable to the people living in Scotland, and this trust is taken to be an equivalent to the Individual Voluntary Arrangement (IVA). The trust is regulated by the bankruptcy act of Scotland formed in the year 1985. The Protected Trust provides a means to the debtor to pay off his loans, instead of facing seizure of property. The Trust applies to those debtors who are passing through bad financial crisis, and do not have enough disposable assets to liquidate his loans with. On signing the Trust Deed, all the loans as of that day are frozen and consolidated, after which a Trustee is appointed to look into the debtors re-payment matters. The appointed trustee then takes up the matter with the creditors, providing them with proposals in writing.

Scottish Trust Deed is a means to enable a debtor, who is suffering heavily from financial difficulties overwhelmed with unmanageable debts, to write a proposal for re-payment to his creditors. This proposal is distributed to all the concerned creditors, and in case the debtor owes no more than 1/3 of his total debt to any single creditor, vote to reject the proposal by any of the creditors becomes invalid. The Trust Deed then becomes legally binding to all the creditors who have been circulated with a copy of the proposal.

The Trust prepares a debt consolidation of all the debts of a debtor into a single debt, and provides a means for an affordable monthly re-payment over a period of 36 months. The debtor pays off his borrowing at the pro-rata rate as fixed by the Trust. The Trust itself goes into minute calculations in setting up such re-payment amount, after going into the details of the debtor’s financial matters, including his assets and liabilities. More-over, the trust looks into the debtor’s income, and the cost of living, and then works out an amount which the debtor is required to pay against the consolidated debt. The Trust especially looks into the affordability of the debtor in paying off the loan in the manner set out in the proposal. The debtor’s payment amount is so arranged, where the debtor has less possibility in being delinquent again, considering his commitments towards other priority payments, for example, his mortgage or rent, his car loan re-payments, utility and council tax payments, and more.

As and when the proposal is accepted by the creditors, the interest on the balance amount is stopped, and the amount gets fixed from that day onwards, with the creditors becoming legally bound by the Protected Trust. The debtor, on the other hand, has to maintain his part of the Protected Trust terms, and the final amount to be settled becomes the full and final settlement of the debt. If there is any outstanding balance, it has to be written off.

The debtor usually takes the help of a licensed Insolvency Practitioner known as a trustee, and this trustee could be the one appointed by the Protected Trust. The trustee has to perform with all honesty in preparing the draft bearing in mind the debtor and the creditors as well. The drafted proposal has to be realistic from both points of view, and should not be one sided. The draft is given to the debtor to be approved, and when done, the trustee makes the final trust proposal before circulating it to all the creditors.

When the Trust proposal is received by the creditors, they have the right to either accept or reject the proposal, or even ask for modifications and amendments before acceptance. Here again, the modifications and amendments, if any, could only be done with the debtor’s consent. If there are no replies received from the creditors, the proposal is deemed to have been accepted.

As the Trust Deed becomes protected, the appointed trustee acts as an observer, who looks into the progress of the deed and ensures the proper maintenance of the terms and conditions set in the Trust Deed. On successful completion of the payment, the debtor will be considered debt free. No matter what the amount was before, the sum settled in the deed would become the full and final settlement figure.
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According to recent headlines, mortgage lenders are being accused of unfair mortgage exit fees on some borrowers. Now the mortgage lenders who participated in these unfair practices are being force to repay the charges. Could you have been a victim of unfair mortgage exit fees? Could you be able to claim a repayment? It is easy to find out whether you qualify for some money back. All you have to do is familiarize yourself with the terms of your mortgage and exit fee agreement.

In the history of mortgage fees, the fees that a borrow has to pay have stayed relatively stable. But in 2004, prompted by a large lender company, the fees began a dramatic increase. The lenders say they have the right to increase their fees for the mortgage contract. No one is protesting the rise in fees, it is the dramatic jump that has occurred in the lat four years that have borrowers upset. Some banks have been known to push fees into the hundreds of pounds and no one could do anything about it.

The watchdog group Financial Services Authority is now watching out for borrowers. Since the group found that many of these increases were unfair, there is a chance that they borrowers are owed a refund from their lender. If you believe that you have been hit with an unfair exit fee, you can determine how much you will get back by what you paid in and if the increase raised during the period of your mortgage loan.

The first thing you can look at to determine how much you could get back in a refund is to see the difference between the fee that you paid at the end compared to what was originally listed on your mortgage agreement. If you have borrowed money before, you can look at your previous mortgage to compare the difference in fees to see if the most recent mortgage was unfairly raised.

Even if you don’t have anything to compare to, you can still complain to the bank in order to see if they will offer you a refund. If you feel that what you paid for you mortgage exit fee was too high, bring it up to the bank and many times, the bank will refund a portion of the exit fee. Remember that the true cost of a mortgage exit fee should be around £35.

Also, remember that exit fees are charged for the administrative work on the loan. There are other fees that go along with your mortgage that don not fall under this refund category, so make sure you are looking at all the right numbers before you go to claim a refund. If you do feel that you were charged an unfair amount on your mortgage exit fee, you are entitled to ask for a refund. Although you may not get one straight from the bank, you still have legal options that you can pursue in order to reclaim some of the money that you paid.

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