It may be good to know that it is not just us mere mortals who struggle with debt. There are more than a few celebrities in the UK who are not capable of making the right financial choices. Many have learnt the hard way that being rich and famous does not come cheap. So next time you complain about paying your ‘average Joe’ bills, think of these celebrities who face similar challenges, only on a broader scale – with the public watching.

Kerry Katona:

This former Atomic Kitten star has been through quite a bit in her 30 years. Not only did she have to deal with personal and health problems, financial issues have been a prominent factor in her life. The debt problems stem from a decline in her professional life. After quitting her stint with Atomic Kitten, Katona moved from reality show to reality show trying to find her niche in the entertainment industry. But, after many failed attempts to break into the industry, Katona was declared bankrupt at the High Court in London after failing to pay the final £82 000 of a £417 000 tax bill. In December of 2009, her £1.5 million home was repossessed after failing to make mortgage payments.

Shane Ritchie

Shane Ritchie may be best known for his role in popular Brit soap opera EastEnders, but for many he will be known as the actor who could not control his finances. His reputation for financial problems indeed precedes his acting talents. His money troubles included the sale of his dream home after failing to keep up with the £8,000 monthly payments. He has, however, managed to dodge the bankruptcy bullet thanks to friends covering his debts and saving his financial reputation.

Mike Read

Mike Read is a disc jockey who allowed his finances to run away with him. Read declared bankruptcy not once but twice, the latter occurring just last year. The second bankruptcy forced Read to sell his beloved collection of records and music memorabilia. Even this didn’t help much, as the record collection sold for only one tenth of its £1 million estimate. The remainder of the collection is being sold by the liquidators on ebay.

Joe Swash

The cast of EastEnders should take note. Joe Swash, an EastEnders cast member seems to have the same lack of money management skills as fellow cast mate Shane Ritchie. Not only was he a popular soap star, he also hit it big on reality TV winning the British show ‘I’m a Celebrity…Get Me Out Of Here!’ Unfortunately, money doesn’t equal responsibility, leading Swash to file for bankruptcy after failing to pay a £20 000 tax bill and debt consolidation loans.

Matt Goss

Known as one of the Goss brothers in the British pop sensation Bros, Matt Goss achieved fame and fortune while still a teenager. But thanks to years of squandering, Goss came close to bankruptcy by the end of the Bros reign as pop stars. Matt has since left the UK for the bright lights of Las Vegas and is apparently more careful about how he handles his money.

Related posts:

1. How Could Kerry Katona Have Dodged Bankruptcy?
2. 10 Celebrities You Shouldn’t Lend Money to…
3. Debt Dodging – The Top Ten Benefits Scandals

The benefits system in the UK is build on noble principles. It provides a valuable safety net for those who find themselves in fiscal dire straits. The recent economic crisis has shown us that anyone can be affected by a sudden change in financial circumstances. In particular, loss of employment is a common cause of this extremely difficult situation and will often result in an inability to meet debt repayments. Of course, in addition to the benefits system, help and advice from companies like Debtsolver can help you to solve the debt problem and see out the period of unemployment.

However, there are those that exploit the benefit system and perpetuate our national debt problems, rather than making an effort to solve them. The lengths that some people will go to in order to avoid working are staggering, as is the cost to the British taxpayer. That puts more pressure on all of our finances. Here is a top ten of some of the most scandalous abuses of the British benefits system and an estimation of how much they cost (according to comparison site TotallyMoney.com).

1. Almost half of the residents of Falinge, in Rochdale, are currently claiming incapacity benefit. Across the country, over two and a half million are doing the same. That’s nearly 5% of the UK population and it costs the UK taxpayer over £40k a week.
2. Islamic cleric received more than £1million worth of legal aid, while claiming £680 each week in state benefits. Although he actually owned another property that generated £130,000 in profit, he lived in a £550,000 council house.
3. Having raised all 13 of her children on benefits, the thought of having to find work, now that some are leaving home, did not appeal to one woman. She’s currently estimated to be “earning” over £27,000 in benefits, which is comparable to a salary of £37,500.
4. A family of 4 with a combined weight in excess of 80 stone have maintained that they are too big to work. That means an estimated £22,000 a year in benefits. One daughter claimed, “It’s not our fault we can’t work… no one wants to employ fat people.”  She turned down a job offer on live radio a month later.
5. A couple invented 16 children to fraudulently claim more than £75,000 over four years. However, despite being imprisoned for fraud, it was claimed that this was, in fact, a public service; exposing loopholes in the benefits system.
6. An 18 year old, who left her parents’ £1million home at 14 to have a baby, has recently given birth to twins –to a different father. She is now claiming that her £16,000 a year in benefits is not a sufficient sum to live on; despite the median salary in the UK being roughly £20,000.
7. A 29-stone mum on benefits is too busy to feed her 8 month old triplets healthy food. Existing on nearly double their recommended calorie intake, the children are only allowed vegetables once a week.
8. The strongest man in Cornwall in 2007 took home the title and £300.  However, he was also taking home £40,000 in disability payments at the time and holding down a job. Naturally, he didn’t inform the authorities because it would’ve cost him his housing and council tax benefits.
9. A couple claimed £40,000 worth of benefits while they sailed around the world in a luxury yacht. While too sick to work they enjoyed scuba diving in Kenya and swimming with dolphins in the Canary Islands.
10. While seeking asylum in the UK, Iranian national Massoud Montazery claimed £25,000 in benefits. However, he also had over half a million pounds in a secret bank account, drove a Merc and dressed designer.

Related posts:

1. The Top Ten Ways to Waste Money on Your Car
2. Top 5 British Celebrities in Debt
3. Benefits of Reducing your Store Card Debt

British Prime Minister David Cameron outlined his plans to solve the country’s debt problem but has emphasised the difficult decisions that are yet to be made with regard to state pensions and benefits. In short, the Great British public are to expect widespread, deep and difficult cuts to public spending.

Cameron has described the task of tackling the UK’s debt problem in no uncertain terms and is obviously looking to instil the severity of the situation. However, he also emphasised that these cuts in public spending would not damage those at greatest risk and in greatest need of support at such a difficult time. That being said, the budget announcement cannot afford to be too divisive with respect to wage bands across the country. This alludes to a very difficult balancing act in curing the country’s financial ill health.

Up to this point, the Conservative-Lib Dem coalition have tabled a budget for the 22^nd of June, in which they are expected to build on the cuts of £6.2billion that have already been announced. Apparently, the state of the country’s finances was even worse than the new Prime Minister had imagined when taking office. In his own words, the UK is in “Debt Crisis” and he laid the blame for this situation squarely at the feet of the Labour government.

Solely in terms of interest payments on the national debt, the UK is set to spending £70billion within five years. For any of us that have been paying an interest only deal on a mortgage or been going on paying the minimum repayment amount to our credit card, the sheer waste of money will be immediately apparent. As we at Debtsolver have always reiterated, dealing with your debt as quickly and efficiently as possible will help to save you money. As ever, the sooner you face up to the problems, the easier they are to solve.

There are then the knock-on effects to consider, like increased interest rates and the general drop in the level of public services on offer, as taxes are diverted to pay the interest on our national debt. Of course, as promised in the Conservative manifesto, NHS spending and international aid will be protected for the cuts. Whether this remains viable in the long-term is yet to be seen.

In the past 5 years, we’ve seen the loss of 100,000 civil service jobs and the union Unison have viewed these public sector spending cuts as specifically targeting those on a lower income, dependent on these public service, like healthcare and financial support. Unison viewed the debt as a problem that was essentially caused by the wealthy banking and financial sectors but was set to be paid for by those that were most vulnerable.

No related posts.

The now notorious high street bank, Northern Rock, nationalised to safeguard its customers and itself against the crippling effect of the credit crunch, is now offering to buy back bad debt. In a move that it hopes will generate an estimated £700million, Northern Rock intends to buy back the junk debt at a fraction of the original value and begin to chase the payments.

On one hand, it is hoped that this activity will reduce the overall cost to the taxpayer. At present, an estimated £1.6billion of tax payers’ money is ready to be moved into the bank to counterbalance any losses associated with bad mortgage debt. However, after making a loss in the region of £140million during the second half of 2009, things are looking up in 2010, with Northern Rock back in the black for the first quarter. This has been facilitated by an average increase of 10% in house prices and the low rate of interest.

A significant proportion of Northern Rock is performing well, with about £10billion worth of stable mortgages and £20billion worth of deposits but the banks Channel Island operation on Guernsey is going to be closed. This will leave about 6000 customers looking for a new home for savings worth nearly a billion pounds and with just under 3 months to close their accounts.

To be clear, junk debt is essentially a debt that has past the debt collection statute of limitations, which makes it much cheaper to buy. So, for the original owner of the debt, it’s been settled; most often through bankruptcy. Once upon a time though, very few creditors would ever bother to try and collect a junk debt because it wasn’t deemed to be worth the effort or expense. However, in this recession inspired environment of fiscal belt-tightening and penny pinching, the thought that there could actually be money to be made from these old, out of statute debts has sparked a bad credit gold rush.

So, even after you have successfully completed the terms of your debt solution, it‘s still possible that you could be contacted by someone chasing the debt. Remember, the statute of limitations on the debt has expired. You need to talk to a specialist debt advisor who can let you know where you stand. Don’t give any information or sign up to any payment plan until you know exactly what’s expected of you. Talking to a debt advisor can help you to get this straight.

Northern Rock obviously feels there is a significant amount of money to be made from buying back this debt but for the vast majority of people, the situation will already seem resolved and the debts settled.

Related posts:

1. Five Steps to Fend Off Dodgy Debt Collectors

You’d be forgiven for thinking that, with all of those big money movies, record sales, royalty cheques and sponsorships, celebrities are a relatively safe bunch to lend a few quid to. After all, they can afford it, right? Well, they’re not usually renowned for astute money management. As this list from Debtsolver shows, celebrity spending and debt often go hand in hand.

1. The music business is notoriously fickle but two successful albums and a Grammy would be sure to lull you into a false sense of security. Sadly though, for Toni Braxton this success just couldn’t provide her with the lifestyle to which she aspired and in 1998 she filed for bankruptcy, owing $5million.
2. Staying with musical superstars, remember MC Hammer? Well, although his spending habits are now the stuff of legend, he was able to keep up with it for a while. All good things must come to an end though, the shelf life of Hammertime being one of them. He filed for bankruptcy in 1996, having spent about $20million.
3. Kim Bassinger bought Braselton, a town in Georgia (the US state, not the ex-Soviet country), for a reported $20million. She then signed up to do a film called Boxing Helena, decided against it and dropped out. The film’s producers took her to court for breach of contract. Kim lost and had to sell Braselton and file for bankruptcy.
4. Mike Tyson apparently earned $300million in his fighting career. However, he was bankrupted by $27million worth of debt; $13million of which was due to the US Government in unpaid taxes.
5. Burt Reynolds starred in almost 150 films. However, in spite of this extensive list of credits, Burt managed to build up about $10million worth of outstanding debt and only managed to hold on to his house through some expert legal wrangling and dedicated debt management.
6. Don Johnson’s days on Miami Vice made him one of the most famous small screen actors in the world. However, his life of excess lead him into serious debt problems that even cost him the iconic silver Ferrari Testarossa, a personal gift from Enzo Ferrari, that became such a signature of the programme. He managed to repay over $14million but I’d still think twice before lending him a tenner.
7. Marvin Gaye is about as big a legend as you get. Sadly though, succumbing to well documented personal problems, Marvin’s mounting tax debt lead to bankruptcy in 1979. He returned to form in 1982 with the release of “Sexual Healing” but sadly died in 1984.
8. Cyndi Lauper reminded us all that girls just want to have fun, but at what cost? Critical acclaim came early for Cyndi but this early success never really translated into record sales and in 1980, she filed for bankruptcy. Her career was luckily resurrected and her recovery from bankruptcy remains an inspiration to celebs everywhere.
9. Willie Nelson’s been around for a while. Sadly though, he’s almost as renowned for his massive unpaid tax bill as his inspirational activist anthems. Willie was apparently not great at keeping on top of his finances and was reportedly taken advantage of by his accountant, owing somewhere in the region of $17million in unpaid tax.
10. Meat Loaf hit the late 70’s music scene with a hugely successful album and looked set to be a major player for years to come.  Within a decade though, a pretty major debt beef had got the better of Meat and in 1986 he filed for bankruptcy, owing $1.6million.

Related posts:

1. Top 5 British Celebrities in Debt

In the UK, deductions from your self-assessment tax return can amount to substantial savings. These savings can help you to battle debt problems and can amount to a welcome tax rebate at a time of year when funds are notoriously tight. It can be difficult to know what you can discount as a business expense and what you can’t though. For inspiration, here are some real examples from our cousins across the pond, courtesy of Debtsolver.

Firstly, the top ten successful tax reductions…

1. The owner of a petrol station gave away free beer instead of trading stamps and the Tax Man felt that this is a legitimate business expense.
2. An “exotic dancer” had her chest enlarged to a 56-FF and as a stage prop essential to her act, they were tax deductible.
3. Your babysitter can be a charitable deduction, if you employ her to look after your children while you are off doing charitable works in the community.
4. Necessary business trips are tax deductible but the owners of a dairy business did manage to write off their Safari because a lot of the activities had an animal focus.
5. Pets are considered personal effects so if your job requires a move, transport for your furred, feathered or finned friend is deductible.
6. Hold a business meeting in Bermuda and it can be written off. Same with Barbados, Costa Rica, Dominica, the Dominican Republic, Grenada, Guyana, Honduras, Jamaica, Saint Lucia, Trinidad and Tobago, Canada and Mexico… If you’re from the U.S.
7. If you’re a professional bodybuilder, you can write off all of that essential body oil. Glistening muscles can be a genuine tax write-off.
8. For a couple who rent out a holiday home, having their own jet is a fully deductible expense as they have to go and check on it occasionally.
9. A nightclub promoter hired a few leggy lovelies for a launch and the tax man allowed him to write them off as decoration.
10. When a man was told to get more exercise, he felt swimming was a good option. So, he installed a pool and was able to deduct it from his tax as a necessary medical expense, including its heating, cleaning and general upkeep.

If those passed, what were the unsuccessful claims? Here are the top 5 that weren’t so lucky.

1. A man tried to deduct whiskey as a client gift but the category he chose was client entertainment, it wasn’t allowed and it violated state laws.
2. The owner of a failing furniture business hired someone to burn it down, not only to collect the $500,000 insurance money but also to deduct the $10,000 expense of hiring the arsonist.
3. You can’t deduct expenses of illegal professions. Sounds obvious? Well, tell that to the prostitutes that try to deduct the cost of condoms.
4. If you buy your own prize-winning racehorse, name it after yourself and then take clients to watch it run, it’s not a business expense, it’s a personal expense.
5. Even though we’ve heard that someone deducted a pool as a medical expense, taking dance lessons doesn’t count. So, dancing to relive varicose veins, dancing to cure arthritis and dancing to alleviate nervous disorders just won’t cut it.

Related posts:

1. Can Paying Off A Stranger’s Mortgage Pay Off For You?

When it comes to trading and investment, the focus is very much on the balance between risk and reward. Long shots can pay off big but they can also leave you in serious debt danger. With this slightly ominous sentiment still ringing in your ears, here are some pretty out-there investment options that the debt specialists at Debtsolver would definitely recommend that you treat with real trepidation. In fact, these fringe markets are probably best left well alone.

Freight derivatives are a relatively popular fringe trade. The Baltic Exchange offers trading on Forward Freight Agreements (FFAs). Basically, one trader bets another about how much it’ll cost to transport something in the future. For example, how much it’ll cost to ship crude oil from Shanghai to Rotterdam on the 25^th of February, 2015. You bet, wait until the day arrives and check the daily shipping rates as displayed by the Baltic Exchange. Companies will tend to do this to hedge against rising oil and geopolitical risks to shipping. It’s a risky business.

Betting on the weather is not something to be recommended but so great is its impact on business that there are those who do. We’re not talking about the odds on a sunny weekend either. It’s about the average over time, divided into ranges and packaged up for trade. A warm winter will affect power company revenue by decreasing fuel demand. They’ll often hedge against this by buying a contract that’ll pay out if the temperature averages at five degrees above the historical average for the winter.

European businesses that produce carbon dioxide as a side effect of their business activity are afforded an allowance of carbon credit. Should they go over this allowance, they have to buy more carbon credits to make up for it. North America is beginning to test out similar programmes now but European-based carbon futures can already be traded. The value of carbon credits depend on environmental legislation, geopolitical issues and the price of fossil fuels like crude oil and natural gas.

Think you can pick out the Oscar winners and summer blockbusters? The Commodity Futures Trading Commission (CFTC) is investigating whether investors should be able to buy and sell futures based on how much money a film will take in its first month. It’ll be a bit like the Hollywood Stock Exchange and buying futures will be based on picking surprise hits and selling futures will be based on picking out the unforeseen failures. Big-time financiers, producers and distributors will attempt to hedge the millions they’ve already invested with this kind of future trading.

Investments are a notoriously unpredictable and volatile market to start with and these fringe markets really are only for those traders with huge bankrolls and a keen understanding of the risks. They call for hugely specialised knowledge of the market and substantial investor credentials. They are showing growth though, with vast sums of money passing through them annually. As we said at the beginning, with the potentially huge rewards comes massive risk and it can all turn to crippling debt in no time. Don’t manage your debt with long shots. Talk to a dependable debt specialist like those at Debtsolver and free yourself from the burden of bad debt.

No related posts.

There are a number of online debt calculators available to UK consumers who are concerned about their level of personal debt. Many of these tackle different areas of personal finance; mortgage calculators, debt consolidation calculators and general loan repayment calculators are amongst the most popular. There is no denying that these calculators can be useful tools when trying to get a more detailed understanding of your financial circumstances. However, there is no substitute for dedicated debt advice and the expertise of a specialist.

If you are looking for a solution to your mounting debt problem, the sooner you seek out help, the better your chances of finding a solution that will allow you to avoid bankruptcy, repossession and the other severe effects of bad debt. Using these debt calculators can help you come to a better understanding of your financial situation, which can then help you to come to a decision on the right debt solution to suit your circumstances.

The Financial Times is an excellent resource for personal finance tools. They have a few online calculators, including a debt calculator, a mortgage calculator and a pension calculator. Each can play an important part in coming to terms with the extent of your debt problem.

The mortgage calculator at Quote.com allows you to calculate a simple monthly payment, look at the possible effects of prepaying your mortgage and hypothetically adjust the composition of your many future monthly mortgage payments. This can be particularly helpful in allowing you to project your future mortgage-interest tax write-off. It can simulate your equity increase or the drop in interest as a percentage of your monthly payment.

You should never take on any debt without first deciding whether or not you can afford to repay it. Any potential doubt in your ability to service the debt is recipe for serious debt problems. This calculator from The Motley Fool allows you to calculate the potential monthly repayment and the total amount repayable on any loan.

This calculator from the Guardian aims to provide quite a full picture of your debt. You input all of your details and it will show you how much interest you owe, how much it’s costing you and when you’ll pay off the debt. The calculator can also show you the impact that a debt consolidation loan could have on your overall debt and your ability to meet monthly repayments.

Debtsolver have taken a novel approach to the debt calculator, instead using the information that you input into our debt wizard to give you a financial health check-up. Based on this information, their advisors can prescribe a debt solution that could cure you of the burden of bad debt. On the other hand, this could provide reassurance that your level of personal debt is within healthy parameters.

Related posts:

1. Calculating your Debt-to-Income Ratio

12-year-old runs up $1,300 FarmVille debt

A little boy has recently racked up some big debt, playing the extremely popular Facebook game, FarmVille. The game has a function that allows players to buy in-game coins for real-world money and this young farmer managed to run up about a thousand pounds worth of debt on his mother’s credit card. His mother is now hoping that her tale of debt woe will serve as a warning to other parents, to watch what their children get up to on these social networking games.

FarmVille is currently one of the most popular games on Facebook, with well over 80 million users. The idea behind it is that each new farmer is given some virtual funds to start a farm. They then use this funding to grow crops which they can then sell for more pretend money and recycle it into their farm. However, trading on the impetuousness of the average internet user, FarmVille offers the ability to buy extra virtual money with real-life credit.

As the boy lives with his mother, Zynga – the makers of FarmVille – have refused to offer any kind of refund as they feel it is the responsibility of the parent to monitor a child’s online activity and look after their credit card. In addition to this, children under the age of 13 are not permitted onto the social networking site, so Facebook has disabled the boy’s account and refuse to take any responsibility for his actions. Although the woman does blame her son, she feels there should be some portion of the blame laid on Facebook as she feels they weren’t acting responsibly. Ultimately, she feels that her son was using another person’s credit card and that should flag some kind of security. In addition to that, the secure payment filter is bypassed for payments on Facebook.

This case highlights the importance of looking after your credit card, the dangers of online transactions and most clearly, the unique routes into debt that can happen suddenly and without warning. Financial circumstances are subject to unexpected change and this is when bad debt can begin to mount up. Talking to a dedicated financial advisor can help you to react quickly in the event of these unforeseen circumstances, helping you to avoid severe debt problems. The sooner you get in touch with a dedicated debt advisor and tell your creditors about the potential struggle in meeting repayments, the more likely of you are of reaching a mutually beneficial conclusion.

No related posts.

The face value of tickets to World Cup Games is supposedly between about £50 and £80. We all know that they’ll be changing hands for a lot more than that though. At the time of writing, that popular online auction site had one ticket to see England versus the USA with a reserve of £350. There’s no doubt that following your country to the World Cup Finals is an expensive business. There are also those people for whom such a once in a lifetime opportunity is worth the money. So, watching England in the World Cup: priceless?

On top of the ticket price, there are all of those other expenses to consider too. For starters, getting to South Africa, if you can find a seat on a flight out there, is going to be an expensive proposition. Accommodation will be at a premium too, with footie fans from all over the world descending on the Rainbow Nation. Let’s just say that’s all done though. It was expensive but worth it. You’re there and you want to phone home to tell everyone just how good it is. Well, the watchdog Consumer Focus has warned that fans could be paying in excess of £100 to make calls and send texts on match day.

The team leaves the tunnel, the sun is shining and the flags are flying. You want to post a photo or two, to show those that couldn’t make the trip what they’re missing. Not so fast, the highest charges could well be for mobile phone users that upload their photos or videos to social networking sites. You could find that the charges for data and mobile internet could range from just over £1 to £8 for each megabyte.

All of this means that you must check the rates applied by your service provider before you go. If you pay your mobile phone bill by direct debit, you could find that you return from watching the World Cup in South Africa with substantial charges having been applied to your account. This could push your account into the red, meaning overdraft charges and even the possibility of missed payments that could seriously affect your credit rating. We are keen for you to bear in mind that the implications of this can be serious and long lasting so make sure you know where you stand with your network charges. It’s also important to remember that the charges are going to be a lot higher than they are when travelling in Europe. Look into extra data bundles and other money saving angles before you leave.

Related posts:

1. What Happens When You Don’t Pay Your Bills?