People who are in an IVA need a lot of advice, as do people who are considering getting an IVA. The type of tips they get will determine how successful their programmes are and also how quickly they can move on with their lives.

Though there are many tips to ponder, ruminate and reflect on, there is one piece of advice that should matter the most to anyone who finds themselves contemplating getting into an IVA agreement – be honest.

Be honest with everyone, but mostly with yourself. You must be realistic about how much you need to get through. If you really need that fancy cup of coffee once or twice a month, then budget for it.  If you just can’t miss out on a trip to the movies once a month, then include it in your calculations.

We are all human and we all need a little luxury every once in a while. Not a lot, just a little. A gym membership might sound frivolous to someone who lives in a safe neighbourhood but to someone who doesn’t it might feel like a necessity.

There is no point in cutting your budget to the tiniest size ever just to impress the people who need to approve your IVA application. Be honest about your living costs but still try to prune wherever you can. Cut things out of your budget that are really not necessary but leave space for one or two treats – dinner at a medium-range restaurant once every two months or a haircut once every 6 weeks.

This might reduce the amount of money that goes towards your creditors but it will leave you with a bit more disposable income to enjoy your life, whilst still paying back the money you owe. After all, people who are content are more likely to stay the course. This also means they are unlikely to be made bankrupt by their creditors. Good news all round.

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More and more people are turning to personal debt management programmes and services to help them with their debt problems. Consequently, debt management plans are getting a great deal of attention as credit card companies and debt consolidation companies try to sell their services to the financially struggling.

Whilst these consumers are desperately trying to get their finances in control, innovative smartphone app creators are trying to make their lives a whole lot easier. Here’s a summary of some of the apps that can assist you in trying to sort out your money woes.

Credit Card Debt: This application keeps track of all your credit accounts (like credit card accounts, mortgage etc). It helps you track all your debt and even shows the user a bar graph of the percentage of money you owe against the credit limit on your card.

Personal Debt Clock: The Personal Debt Clock takes a different approach to managing your debt. This app allows you to visualise the effects your payments make on your debt. It does this by allowing you to see the number of years, months, days etc, that it will take for you to be debt free. It also allows you to implement different scenarios, such as the effect of making an extra payment and, hopefully, will then motivate the user to pay their debt off faster.

Debt Tracker: The Debt Tracker app (available in Pro and Lite versions) combines both of the above two methods. This app shows you all your credit card balances, loan balances and mortgage in one, convenient place. It also allows you to determine how long it will take to pay off your debt if you pay a specific amount each month. You can also use this app to determine how much you should pay per month in order to pay off your debt by your preferred date. A handy application that can help with debt management.

All of these apps are quite useful, but if you are really struggling to pay off your debt, seek the advice of a professional financial advisor.

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According to a shocking new survey, one in three UK adults has not got enough savings to survive just five days without work. The survey, conducted by High Street bank HSBC, discovered that just 30% of Brits have the equivalent of a week’s pay or more in their savings account.

These figures come despite financial advisors suggestions to have at least one month’s worth of savings set aside for emergencies.

Even more worryingly, the research also found that at least 20% of Brits do not have any emergency savings at all.

All this comes just two weeks after the Bank of England’s deputy governor Charles Bean urged the country to indulge in a shopping spree to boost the fragile economy. Astonishingly, Charles Bean admitted that he wanted to see Britons ‘not saving more, but spending more’.

The statement predictably provoked outrage amongst some Brits. Comments on finance website This Is Money ranged from ‘astonished by what Mr. Bean is recommending’ to ‘…bankers suck the lifeblood out of the economy’.

What the survey has highlighted is that Britons are not saving the way they should be – a fact that is in part a testimony to painfully low rates available on ordinary savings accounts. On average, a one-year bond pays just 2.62%, according to Moneyfacts.co.uk. During the same period two years ago, savers could get 6.28% before tax.

Further statistics reveal that just one in five people said they would be able to continue paying their mortgage or rent and other bills in the event of job loss. Whilst 36% said they would have to rely on government support and 22% said they would have to rely on their partner for financial support.

Richard Brown, head of savings at HSBC, said: ‘These findings demonstrate a worrying lack of preparation amongst UK residents’.

‘With the current climate of uncertainty, it is of utmost importance that people are setting aside a realistic sum of money to be used in emergencies.’

‘By putting away a small sum each month Britons can help themselves build up an emergency savings pot as provision for any eventuality.’

Young people were the most unprepared for a financial emergency, with 41% of those aged between 25 and 34 having less than £249 worth of savings.

Women are also decidedly worse off than men, with 20% having no savings at all, and 13% having less than £249, compared with 17% and 9% respectively for men. Furthermore, women are also twice as likely to say they would rely on their partner for financial assistance.

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A recent report has suggested that Britons are no longer embarrassed to reveal personal details about their finances, despite their reserved reputation.

According to price comparison website uSwitch, more than a third of Britons are happy to reveal their salary to their friends and family, while a quarter would not mind sharing and discussing the current state of their finances, including any debts they have.

Additionally, 92% say that they are comfortable shopping at what are deemed ‘budget’ shops, while a surprising 87% have no problem purchasing second-hand goods.

The report reveals a significant shift in general attitudes toward debt and money. In the past, mentioning your salary or financial restrictions was viewed as a sign of vulgarity. When it came to finances, people were expected to ’keep mum’ about their debt.

Moreover, the report stated that 33% of Britons feel there is no shame in having debt, while 18% no longer feel that bankruptcy should be embarrassing, a  view which has been reflected in UK spending and borrowing data.

This change of attitude towards financial matters has given pawnbrokers a much-welcomed boost in sales, with one in five Britons more likely to pawn their belongings because of the loss of stigma in doing so. According to uSwitch, one popular British pawnbroker chain reported a 71% increase in profits in September 2010. That being said, 31% of Britons still consider visiting a pawnbroker as a last resort.

Ann Robinson, director of consumer policy at uSwitch, explains the current attitude change: ‘Some may see it as a sign of shamelessness, but for many Brits it’s a case of desperate times calling for desperate measures.’

She added, ‘however, whereas in the past we would have kept quiet about the steps we’re taking, today our attitudes towards discussing how we stay afloat have relaxed considerably.’

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Football star Noel Hunt may be forced to file for bankruptcy thanks to an unpaid council tax bill. The former Dundee United striker, who now plays for Reading, may have to face home raids and have his wages arrested if he does not pay his £2,281 debt due for settlement on Wednesday, 27 October 2010.

As reported by the Daily Record, Noel Hunt who currently plays for English Championship side Reading, owes the money to Perth and Kinross Council. After months of trying to pursue their claim against him, the council has finally won a decree ordering him to pay up or face bankruptcy.

A warrant has been issued against Hunt, and if he fails to pay, his belongings could be seized and auctioned off. Hunt has had previous legal discrepancies in the past over unpaid bills.

In papers displayed at the Perth Sheriff Council, the council describes Hunt as being ‘present whereabouts unknown’. Sheriff Officer Dale Barret has warned Hunt that if he does not pay the full sum within 28 days of issue, further action will be taken. This could include arrestments of his earnings and auctioning off his possessions to pay the bill.

He also added that Hunt is liable to be declared bankrupt. A source said: ‘This has been going on for a few months now. Hunt seems to have buried his head in the sand because it is not as if he has been back in court to dispute the figure. Maybe he just hopes it will go away but it’s too far down the line for that.’

Hunt earned £600,000 when he moved to Reading in 2008 after scoring an impressive 23 goals in 64 games for Dundee United. His 15 goals in 47 appearances for the Championship promotion hopefuls have earned him three international caps for Ireland. However, his career has been affected by serious injury.

Hunt’s legal woes began in 2008, when he appeared at Dundee District Court and admitted to using a mobile phone twice while driving.

The court case drew controversy after Hunt tried to exclude reporters so he could have his case heard in private. His solicitor Kevin Hampton explained: ‘There was a very good personal reason for using the telephone on both occasions. It was a very serious matter. There is certain information Mr Hunt has given me that he does not wish to be made known in a public court.’

Hunt was eventually fined £120 and had six penalty points put on his license.

Later in 2008, Hunt was taken to court again after failing to pay surveyor firm, J & E Shepherd, £350 for a report after he purchased his new home on the exclusive Priority Grange development.

Hunt’s agent was unavailable for comment.

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Many consumers have learnt their lesson the hard way – in this day and age, being extravagant and spending money you don’t have is foolish. However, despite our sensible reluctance to spend on unnecessary luxuries, those small, unaccounted for purchases can significantly add to our existing debt. Thus we can end up struggling to pay off our debts while the interest rate piles up. This results in significant financial problems.

If you find yourself struggling with debt, and with few prospects of getting it cleared, you need financial assistance right away. This is a vulnerable time for you as you are more likely to accept any offer available to you. Caution is advised here as quick fix solutions often end up creating far bigger debt problems. Many people suffering from debt find themselves confused by their options.

There are a few debt solutions out there that can help relieve debt in a manageable way. In order to make an informed decision about which debt solution is best for you, you need to know as much as your can about the options available.

Here we look at the differences between Debt Management and an IVA – both possible debt solutions with different advantages and disadvantages.

Debt management

Debt management is a possible way to eliminate your debt. A debt management plan is an effective solution to paying off your debt under the best terms possible. You will make one monthly payment which will be distributed amongst your creditors. You will then make consistent, timely payments and in return you can enjoy reduced interest rates. The single payment helps reduce confusion and allow for a more efficient financial process provided you honour your monthly commitments.

Debt management, however, does not reduce how much you owe, but instead offers reduced interest rates, helping you pay off your debt faster. Some creditors may state in your credit file that you are participating in a credit counselling programme, but it ultimately will not affect your credit score. Also, you will no longer have to be in constant contact with your creditors in order for debt elimination to take place.

Debt management considerations:

• All your debts will be repaid over time
• Your creditors may not agree to a change in the applicable rate of interest
• Creditors will still be able to demand quick repayment of the debt. They can still take legal action against you.

Individual Voluntary Arrangement (IVA)

An IVA is a more serious debt solution. With an IVA, your Insolvency Practitioner (IP) will negotiate with your lenders in the hope that they will accept less than what you actually owe. But while this is advantageous to the debtor, your credit score will be affected in a negative way. Also, your IVA will reflect on your credit score for 1-6 years.

As opposed to a debt management programme, this debt solution is a formal arrangement. It is a legally binding agreement between the debtor and the creditors.

IVA considerations:

• Because this is a formal agreement, the debtor will be bound by its terms. Failure to comply with these terms could result in the debtor filing for bankruptcy.
• The terms of the agreement can be quite strict and rigid, so the debtor has to fully understand these terms before accepting it.
• The debtor will not be allowed to take out any other credit agreements once committed
• It will be noted on your credit record. However, after five years, you will be able to improve your credit rating score once again.

The decision you make will affect your financial future, so best speak to a financial expert, allowing you to make an informed decision.

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Nothing everyone is educated about potential financial pitfalls and debt can pile up quicker than most people realise. Careful analysis and a little research suggest it is possible to get out of the mess. It won’t be immediate but it is possible to continue living your life without having to dread the constant reminders arriving in the post.

There is help available to most people who are alarmed to discover that they do not know how to handle the amounts of debt they have built up over the weeks, months, and years. Not everyone manages to get to grips with credit card debt in just one month. Some people need a couple of months or longer as it requires a disciplined approach. Let’s look at a few reasons why someone may need debt help.

Unemployment. This is perhaps the single biggest reason why someone’s finances takes a journey – sometimes long, sometimes short – into the murky waters of debt and overspending. This has become even more commonplace since the recession when many companies have had to let go of thousands of workers. The people who lost their income often had little savings, which meant that they soon struggled to pay the basics – food, rent or mortgage, and travelling expenses.

This is put into perspective via a 2008 survey suggesting that the basic cost of living is £13,400 a year for a single person in Britain.

Existing debt problems. The majority of people with debt find it difficult to manage their finances. This is often because they have multiple creditors who demand multiple payments from them, often at different times of the month. Unsurprisingly, many people struggle to keep track of what they owe and the interest on the debt continues to mount. Companies such as Debt Solver succeed in helping those in financial difficulties because they understand how frustrating the process can be and have long term solutions in place.

Changing Life Circumstances. Most often this means their circumstances have changed for the worse due to an unforeseen event. There are numerous other reasons – besides unemployment – why someone needs debt help due to changing circumstances. Falling ill is one such reason, as is divorce. Any of these reasons could mean that the person has a smaller amount of disposable income, whether it is for a few weeks or a few months. This often means that they can benefit from a discussion about their finances with someone who is in a position to help them.

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Debt consolidation is a form of debt management that allows you to organize and streamline your financial obligations helping you to avoid the more serious consequences of financial defaulting which could lead to bankruptcy. The concept behind debt consolidation is straightforward – you use one loan to pay off all your other debts and loans, leaving you with only one monthly payment and interest rate to take care of. This positively contributes to your credit score by allowing your current accounts, regardless of status, to be considered paid. You are also opening another account, which, if you keep up with your payment obligations, will actually serve to boost your previously faltering credit rating.

In order to gain control over your financial obligations, you need to do your research and find the right debt consolidation company to work with. Learn as much as you can about the company and their debt removal process. Ask for references from people you trust, and go online and check consumer reviews. Planning pays off so think longterm.

Before deciding on a debt consolidation plan, you need to get your financial affairs in order. Make a list of all the debt you want to include in the debt consolidation plan. Include creditor information, contact information, monthly payments, interest rates and current balances in this list. This will give you a better understanding of the amount of debt you have, what you need to clear and how long the process is likely to take. This can be difficult as seeing the actual amount could overwhelm you. Many people know they are in debt, but are in the dark as to how much they actually owe as the interest rate calculations are usually found in the small print down the bottom.

If you are looking for a way out of debt without seriously hampering your credit rating and score, debt consolidation may be the right choice for you. Debt consolidation is a smart alternative to getting out of debt while still maintaining a relatively good credit report. It can even give your credit rating a boost if handled in the right way.

Once your debt is cleared, your finances will take on a whole new look. Your credit score will be recalculated, thus reflecting a new, positive status and boosting your credit score. This credit score boost will serve as motivation to maintain this new and improved credit rating. You are now able to start afresh, understanding the implications of your spending habits and it gives you a future platform from which to monitor and control your spending levels.

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The increase in debt levels among British women of all ages is worrying analysts. The rise has been alarming– a fivefold increase in the last 10 years. Even more worrying to some is the number of people who feel that they would be better off applying for bankruptcy. This number has risen sharply- in just one year, the increase was an astonishing 28%.

There are a number of reasons why some, not all, women are struggling on without getting proper debt advice. These reasons may be interlinked with the reasons why they fall into debt in the first place. Some of these reasons include: pride, uncertainty, reckless spending, and lack of familiarity with interest charges and late payment penalties.

Irresponsible spending is the principal reason why some women fall into debt but not all women can be generalised in this way. The vast majority of women receive debt advice from sources that often are ill equipped to offer advice or have underhand motives in their communications. Dubious financial practice among issuers of credit is a significant factor in why we are seeing such a spike in the numbers over the last 10 years.

Celebrities with their glamorous lifestyles have done a certain percentage of women – and men, too – a disservice in that they encourage a consumer culture of excessive and consequence free spending. This form of instant gratification spending has seen debt levels soar so high that many find it difficult to recover even after a period of 5 to 6 years.

Best practice suggests speaking to someone who can assist is the first step to debt recovery. Such a person generally works for a reputable debt consolidation firm. They can give debt advice and offer help with planning and organisation. This is not a quick fix but a long term plan for debt clearance that requires discipline and commitment. Use the company’s debt advice to plan and initiate your repayment process but be aware that the real solution has its roots in examining the underlying reasons that caused the problems in the first instance.

Some of these reasons include divorce, being a single parent and not having anyone to turn to for debt advice. Some of these problems are easy to overcome while others are not as simple and will require more of a prolonged effort from all parties concerned.

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I once spent an afternoon in an academic bookshop looking at some book on ratios in nature. The book fascinated me and yet I shied away from a future in mathematics.

One thing I remember from reading some parts of the book is that ratios occur throughout nature and, without them, we as humans would be pretty lost. We wouldn’t be able to calculate a circle’s circumference to its diameter, eg. This would have implications throughout every sphere in our lives: architecture, science, and economics. And there are many other things that ratios apply to but let’s concentrate on the economical aspect and let’s be specific and only concentrate on how that relates to a hypothetical person’s financial life.

A debt-to-income ratio is not the only figure that needs attention but it is perhaps one of the more important ones in anyone’s financial portfolio analysis. This is true because it gives a snapshot of how much the person owes to various creditors versus how much income they are generating every month through a variety of other sources.

While it’s true that no single number should be used to diagnose the state of someone’s finances and that the analysis should instead focus on the bigger picture, the amount of debt needs to be within reason. It is better to not include potential future growth, future salary increases, and potential future book deals in spreadsheets that try to give a glimpse of how healthy your finances are.

Is there an acceptable level of debt that can apply to all individuals, never mind their age, income level or education? The easy answer is ‘yes and no’. Every person has a different tolerance for debt so don’t wish you had your neighbour’s debt levels; your own debt might not feel manageable but chances are that your neighbour’s payments on their new 4WD will give you an opportunity to experience your local emergency room.

It is important, however, to maintain debt levels that you can afford. Aim to keep your debt within a range that you feel comfortable with: some might feel comfortable with 10% of their monthly income while someone else, who has different needs, feels comfortable enough spending 20% of their monthly income on their debt.

Keep an eye on what percentage of your income goes towards servicing debt and you should be well on your way to a retirement that won’t force you to rely on your children or on social services.

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