Consumer Credit Counselling Service

In the UK approximately 251 mortgage possession claims will be issued and 189 mortgage possession orders will be made today... every 10 minutes a house is repossessed – don’t let your home become a statistic.

The Consumer Credit Counselling Service has put together 4 steps to beat the stats.

1. Treat your mortgage as your priority - not your credit debts. The implications of not paying your mortgage are a lot more severe than not paying your unsecured creditors. If your budget is tight then you can always approach your unsecured lenders to make reduced payments.
2. Speak to your lender before you fall into arrears, the last thing your mortgage lender wants is to see you homeless. As soon as you realise you are in difficulties contact your lender as they will be able to talk through your options. There are a number of different government mortgage schemes in place to help people in financial difficulties; your lender cannot help if they are not aware you need it. 
3. Increase your income – any extra income will help – for example, from a part time job, overtime or claiming benefits that you are entitled to.
4. Cut back on non essential items in your budget. Assess what is more important in your budget, and don’t get tied down paying for luxury items such as satellite TV or high mobile phone costs. If you already have high costs for these items already, speak to your provider about reducing your package.

It’s never too late!

If you are worried that you home is at risk, please contact the Consumer Credit Counselling Service. We have a dedicated team of mortgage counsellors that can help you put together a budget and advise on the best way forward. If you have a court hearing pending, they can talk you through what to expect and what the possible outcomes could be.

If you would like advice on debts or mortgages then please call our free helpline on

0800 138 1111, or for a chat on our forums please click on this link:

http://boards.msn.com/UKMoneyboards/board.aspx?BoardID=1233

Source of stats credit action 25/06/09

If your debts are a problem and you are really determined to get out of the debt trap, then there are some adjustments that you can make to your lifestyle to help you move closer to a debt free life.  Here are 6 areas that you could consider when trying to reduce your living costs….. 

1. Home –Look at the cost of running the house you live in.  Are there any cheaper alternatives?  For example, could you look at downsizing to a smaller house?  This would save on your mortgage or rent as well as your utility costs, and you may even make a saving on your Council Tax bill. 

Do you have a spare room?  If so, you could consider renting it out.  You are able to earn up to a yearly maximum of £4250 tax free!

2. Second Income – If you have some free time, could you try working a second job?  This would give some extra money to put toward your debts.    

3. Car – Most of us see our car as a necessity, but is it essential?  The cost of running a car is not just the fuel that you put in it on a weekly basis, it is also insurance, maintenance, servicing, and car tax.  Can you walk, cycle, or car share?  As well as saving money and getting fitter, you would be saving the environment!

If you have 2 cars in the family – could you manage with one car for a while without too much disruption to your family? 

4. Holiday alternatives – We all look forward to getting away in our spare time, but it doesn’t mean you have to spend on a holiday away from home. Consider arranging an activity for each day you have off. These don’t have to cost a lot, look at free museums, picnics in the park, or walks. 

5. Your Lifestyle – Do you pay for a gym membership that you have not used in a while?  Do you use all of your mobile phone allowance?  Do you need the extra sky box that is in the spare bedroom?  All these things add up to extra expense in your budget.  If you are tied to a contract you could always try talking to your supplier and see if you can reduce your monthly payment. 

6. Your Habits- Do you realise that if you smoke just 10 cigarettes per day then you are spending £90 per month on tobacco; that is £1080 per year.  A sandwich and a latte at lunchtime could cost you £5 per day – this would equate to £1296 per year.  Frightening thought! 

Could you consider taking a packed lunch or changing to cheaper tobacco products?

Why not set yourself a challenge?  How much money can you save in your budget by making some changes to your lifestyle?

Summertime can work out an expensive time of year - whether it is taking the kids away at the school holidays, numerous BBQ’s, or family days out. Here are a few ideas to help you enjoy the summer sun without blowing your budget.

As soon as the sun pops out the British tradition is to have friends round and light those BBQ’s. There are many ways you can do this on a budget:

• Share the load - ask your friends to bring a bottle and some food
• Look for competitive supermarket deals – two for one offers, etc
• Make your own burgers and kebabs
• Entertain the children with games like hide and seek or have a paddling pool available – ask a friend to bring one if you don’t have one

Fun Family Days out

Summer on a budget is not just about being in the garden, so if you fancy a day out read on!

• Theme Parks  - Look for vouchers in the papers and online (link to MSE days out savings)
• Local Parks – You could explore your local parks, whether it is a romantic stroll or organising a treasure hunt for the kids. To cut down on costs further why not take a picnic?!
• Museums – Most museums are free to the public so why not learn more about your heritage.
• Seaside – The seaside is not only for kids, however if you are packing the children then they could look for crabs in rock pools or have hours of fun building sandcastles
• Bike Rides – If you’re feeling energetic look out for local parks and woods with bike trails.
• Swimming – children under 16 and adults over 60 swim free in England - a great way to have fun and keep active.

Holidays and weekends away

After working hard all year, you deserve a well earned break that won’t break the bank

• Online discounts – major hotel chains offer online discounts and room sales. Don’t forget price comparison sites as you may get the same room cheaper by booking through another website.
• Camping – fancy a bit of adventure and getting back in touch with nature, then you can pick up a cheap tent and hop into the wilderness. Organised campsites are also available countrywide and are fairly cheap to book.  
• Budget airline offers – There are fantastic deals to be had, but watch out for the booking fees! If the accommodation bumps up the price why not have a day trip and travel back late evening?
• Visit family or friends – if they have an extra room, you could ask if you could stay over and return the favour next time
• Home Exchanges/ House Sittings – home from home! Why not exchange with someone in the UK and or abroad. There are a number of websites on the internet where for a small fee they will put you in touch with other site members. 

As your children grow up they will look to you for guidance and will even mimic the way that you use your money.  If you are an impulsive spender, if you are a scrooge, or even if you are somewhere in between chances are your children will be the same later in life.

It is never too early or too late to educate your children on the value of money.  Here are some ideas for you to consider:

• If you give your children pocket money, they will appreciate it and the things that they buy with it if they have to earn their cash rather than just getting whatever they want.  No matter how young your children are they can still be given simple tasks to do, such as making their bed, tidying their toys away or helping out in the garden. 

• Once you have established how they earn their money, discuss how they intend to use their new found wealth.  Do they want to save for a new toy, a new CD, a present for someone, or just put it in their piggy bank? 

• The endless nagging of a child that wants something can weigh you down, especially if you can not afford what they want.  Don’t go into debt to make your child happy as you could well live with this decision for what could be a very long time.  If you can not afford it, have an honest discussion with them – in terms they will understand.

• Look at ways of compromising on their expectations and setting new ones. For example, if they save for half of the desired object then you could pay for the other half, perhaps as a birthday or Christmas present.

• As your children become teenagers, perhaps you can help them to get a part time job that does not interfere with school.  This will teach them the importance of money and how money is not easy to come by. 

And later in life……

If your children are grown up and are working but are still living at home it is acceptable for you to expect a contribution towards food and household costs.  Not only will this help you with your bills, it will also prepare them for independent living and teach them good budgeting habits.  Even with a small contribution to your family expenses they will still be getting a bargain!

As always, if you would like to share ideas on how you teach your children that money doesn’t grow on trees, feel free to post your ideas on our forum http://boards.msn.com/UKMoneyboards/board.aspx?BoardID=1233

Homeowners Mortgage Support (HMS)

As the credit crunch hits and the jobs have dried up, you maybe struggling to meet your monthly mortgage payment. The government have introduced a scheme specifically for borrowers that are experiencing a “temporary income shock”. A temporary income shock can be anything that affects your household income, such as, redundancy or reduction in hours, loss of part time or a partner’s earnings, loss of benefit due to a child leaving school, or a grown up child unable to contribute board due to unemployment.

How does it work?

HMS involves changing your mortgage to interest only, and then reducing the payments for a specific period of time (up to two years). This reduction will be based on your financial situation and can be up to 70% of the monthly payment. This is not a payment holiday, and reduced payments do have to be repaid at the end of the scheme, which means that you will likely pay extra interest over the term of your mortgage.

Are you eligible?

• The scheme will only cover borrowers with a total mortgage of less than £400k, and less than 16k in savings.

• You must have been making regular payments (though not necessarily of the full amount due) over the five months before joining the scheme, unless you had agreed a payment holiday with your lender

Where do you go for help?

Speak to your lender: You can check to see if your Lender is participating in the HMS scheme at www.directgov.co.uk. If your lender is participating, they will also need you to meet certain eligibility rules before they make a decision and offer you the scheme.

Not all mortgage lenders are participating in this scheme; however, all lenders must try and offer help to borrowers before commencing any legal action for repossession of the property.  This is called forbearance, or pre action protocol, and may include reducing the mortgage to an interest only product, changing the payment date, or capitalising arrears.

What’s next?

CCCS will provide HMS advice, but please speak to your lender first who will refer you through a dedicated phone line.  If your lender is not participating, CCCS can provide you with general debt advice by contacting our free phone number on 0800 138 1111.

The most important thing to do is speak to your lender.  Even if you are not considering applying for HMS, or any of the other government rescue schemes, you must make contact as soon as you are unable to make a payment to your mortgage.