Northern Rock says that it has made good progress in 2009 as it reported a sharp fall in its losses.

After stripping out "one off gains" Northern Rock reported an underlying loss of £383m for the year.The Bank lost £257.4m last year compared with £1.36bn during 2008.

The Bank said it was paying staff £13.4m in bonuses as its losses had narrowed.

The Prime Minister Gordon Brown stated today that, "the Economic slump is not over and that there are still bumps in the road ahead".

A Conservative spokesperson said " A New Economic model was need to replace an Economy burdened by Public and Private debt".

Barclaycard writes off £1.8 billion in debts

The level of debts written off during 2009 increased to previously unseen levels.

Credit card debt: Over 4.12bn written off

Mortgages: More than doubled to £984m.

These figures reflect the affect of the UK recession on Personal debt. Surviving the recession will be easier if people face up to their financial situation/issues before they get out of control. 

A good place to start is with Reviva UK where professional help can be jsu a telephone call away.

March 2010:

The Level of UK debts written off during 2009 increased to previously unseen levels. 

Credit Cards: Over 4.12 bn

Mortgages:    More than doubled to £984m

These figures reflect the affect of the UK recession on Personal debt. Surviving the recession will be easier if people face up to their financial situations/issues before they get completely out of control.

A good place to start is by contacting Reviva UK today.

The credit cards for those with bad debts

Many would regard giving a credit card to someone who has recently filed for bankruptcy as the financial equivalent of giving heroin to a drug addict, but there is a growing industry doing just that.

Almost 30,000 individuals filed for bankruptcy in the last three months of 2008, according to figures recently released by the Insolvency Service, an increase of almost a fifth on the year before. This is expected to rise further as recession grips the UK and unemployment continues to soar.

These people will eventually have to apply for credit again if they are to fully rebuild their lives – such as one day applying for a mortgage or a car loan – but will find it almost impossible as the bankruptcy will remain on their credit file for six years.

Credit Building credit cards are aimed at such people who need to show that they have learned how to manage debt after insolvency or defaulting on a number of debt agreements.

On the plus side, these cards help those who wish to rebuild their credit rating, however, they also supply more credit to those who have struggled to keep it under control previously.

The cards are also expensive, for example, Barclaycard Initial has the lowest credit-building rate on the market at 27.9%, which is closer to the high rates found on store cards and approximately 10% higher than the average credit card. However, its cash withdrawal rate is the same, a relatively good rate on average.

Other offers include the Capital One Classic at 34.9% - compared to 9.9% on their basic rate – the Aqua card at 35.9% and the Vanquis Visa card at 39.9%, owned by doorstep lender Provident Financial. But some of these rates may vary as the provider reserves the right to offer a different rate to customers with a bad credit rating after they apply.

The limits on the cards can run relatively high once the user has proved they are able to fund their spending. The Barclaycard Initial has a limit of £2,000, the Aqua of £2,200 and the Capital One of £2,500; the latter's limit gets raised on the fourth statement if all previous bills have been paid on time.

As a perk, the Aqua card also offers 51 days interest free credit on purchases if the balance is paid off in full each month.

A watchdog is to put the largely unregulated UK debt management industry under the spotlight to ensure fair treatment for customers.

A decision by a county court judge could mean thousands of borrowers being able to renege on their debts.
Judge Jacqueline Smart at South Shields county court has decided that the MBNA credit card company cannot demand the repayment of a customer's debt. It tried to force Mrs Lynne Thorius to repay the £8,000 she owed on her card. But the Judge decided there had been an unfair relationship between Mrs Thorius and MBNA because of the way she had been sold payment protection insurance.
 
'Massive ramifications'
Mrs Thorius's case was pursued on her behalf by a claims management firm Cartel Client Review, based in Manchester, and the law firm Consumer Credit Litigation Solicitors. Carl Wright of Cartel Client Review said the court decision was a landmark judgement. "This will have massive ramifications for consumers up and down the country," he said. But MBNA downplayed the importance of the court decision. "The judgement went against MBNA for a number of reasons," a spokeswoman said. "In principle, because the deputy district judge felt that MBNA had not on this occasion provided the appropriate documents to the customer and as such was not able to rely on the clauses MBNA would ordinarily seek to rely on in these cases," she explained.
 
"The case is a county court case and each case is decided on its own merits and on the factual circumstances of each case. This does not set any legal precedent," said MBNA.
 
'Secret commission'
The credit card in question was branded with the logo of Sunderland football club and was sold to Mrs Thorius in the club's shop in 2002. The PPI policy was strongly recommended by MBNA to her at the same time, to pay off her account if she fell ill or was made redundant.
 
But, critically, she had not been told that MBNA would be receiving regular commission payments from the insurance provider ITT London & Edinburgh, a subsidiary of the Aviva insurance group.
 
Judge Smart agreed with the argument of Mrs Thorius's barrister, Paul Brant, that this "secret" commission meant the credit card deal was unfair and therefore in breach of the Consumer Credit Act. This point could potentially undermine many other agreements where PPI has been sold by the lender alongside a loan.
 
These include car finance deals, other personal loans and even mortgages.
"This practice is believed to be widespread and formed part of the Competition Commission's decision to prohibit the co-sale of PPI with credit in its report published on 29/1/09," her solicitors noted. "This point is likely to affect many thousands of individuals within England and Wales," they added.
 
Repayments
The main ground on which Judge Smart said Mrs Thorius's credit card debt was unrecoverable was because MBNA could not provide a copy of the original signed loan agreement, which is also a requirement by the Consumer Credit Act.
 
The Judge ordered the company either to repay Mrs Thorius's PPI premiums and interest, or the value of the commissions it had received which so far has been undisclosed.
 
The PPI premiums, which rose each month as the credit card debts increased, amounted to £2,500 over the time the card had been in use. The claims management industry which has emerged in the past few years has been highly controversial. Many firms advertise in newspapers and on television, encouraging people to come forward to write off their debts.
 
This year the authorities, such as the Office of Fair Trading (OFT), Ministry of Justice (which regulates claims management firms) and the Solicitors Regulation Authority, have warned firms not to make exaggerated claims about their ability to get debts written off because of apparent technical errors in the lenders' paperwork.
 
Appeal?
Since April 2007 more than 100 such firms, or those advertising for people to pursue personal injury claims, have been shut down by the OFT. But the South Shields ruling appears to open up a new and genuine line of attack for claims firms.
 
"We have been using this argument for some time but lenders have been settling outside the courts to avoid publicity," said Mr Wright.
MBNA applied for leave to appeal, which was rejected, but it may now apply directly to a higher court for permission to appeal.
 
Or it may be able to appeal if it can find the original loan documentation. Only when higher courts have decided the issue will the legal ramifications, and the effects on lender and borrowers, be clear.
 
 

A carpenter from Bridgend has won a five-year stay on any repossession proceedings against him by his lender.
Peter Bentley challenged the right of Blemain Finance, who specialise in second loans secured on a home, to repossess him. He claimed that his contract with them involved an unfair relationship that was illegal. The lender also agreed to charge no further interest and cut his repayments from £550 to just £150 a month.
 
Financial problems
Mr Bentley's financial problems started when his mother died in 2007 and he was forced to work part-time to look after his father, who was suffering from Alzheimer's.
 
He took out a secured loan in February 2007 for £40,000 to try to alleviate his financial problems. But his caring responsibilities meant he had to slash his working hours from 48 hours a week to just 19, leading to a big drop in income, and he fell behind with his repayments.
 
Although his father moved to a care home for the last eight months of his life, and died in January 2009, Mr Bentley was unable to increase his loan re-payments significantly because the recession meant that by that time he could not work longer hours.
 
Mr Bentley said that Blemain then started chasing him for the repayment of his loan, which had ballooned to £47,000 by the time of this month's High Court hearing in Cardiff. "Blemain were very aggressive and were not prepared to listen," he said. "I was in a state of panic."
 
Legal challenge
Mr Bentley was represented in the proceedings by lawyers CCCL, employed by the claims management company Cartel Client Review. "The relationship between the parties was an unfair one within the meaning of Section 140A of the 1974 Consumer Credit Act," argued Andrew Settle of the law firm. Mr Bentley's lawyers claimed that Blemain had lent the money to him irresponsibly, taking advantage of his naivety, vulnerability and desperation.
The High Court order was made by Judge Milwyn Jarman.
 
The parties agreed that in exchange for Mr Bentley withdrawing his argument that there had been an unfair relationship under the Act, and in exchange for agreeing not to pursue that legal argument against Blemain again, the finance firm agreed:
• to re-write the secured loan account, cutting the repayments to £150 a month
• not to levy any interest, charges or legal costs "whatsoever."
Blemain's repossession claim was dismissed and it cannot enforce repayment of the loan by this method for five years.
After that, it can be enforced by repossession, but only if there are at least 12 months' arrears on the new level of payments, ie £1,800.
 
'Substantial financial settlement'
"Mr Bentley fell behind with his loan payments," said a Blemain spokesman.
"However, the matter was resolved before it went to court and we agreed to give him further time to repay what he owed. "For the avoidance of doubt there has been no court decision on this case as a satisfactory arrangement was agreed," the spokesman added.
 
Carl Wright of Cartel Client Review put a different interpretation on the outcome. "Peter Bentley was offered a substantial financial settlement, to ensure the case was not heard by the High Court," he said. "It is believed to be the first time a mortgage and loan lender has offered a client a legal undertaking not to repossess the client's home.... for the sole purpose of preventing a judge in the High Court from setting a legal precedent against their lending practices."
 

Court lets woman off £8,000 loan

A decision by a county court judge could mean thousands of borrowers being able to renege on their debts.

Judge Jacqueline Smart at South Shields county court has decided that the MBNA credit card company cannot demand the repayment of a customer's debt.

It tried to force Mrs Lynne Thorius to repay the £8,000 she owed on her card.

But the Judge decided there had been an unfair relationship between Mrs Thorius and MBNA because of the way she had been sold payment protection insurance.

'Massive ramifications'

Mrs Thorius's case was pursued on her behalf by a claims management firm Cartel Client Review, based in Manchester, and the law firm Consumer Credit Litigation Solicitors. Carl Wright of Cartel Client Review said the court decision was a landmark judgement. "This will have massive ramifications for consumers up and down the country," he said. But MBNA downplayed the importance of the court decision.

"The judgement went against MBNA for a number of reasons," a spokeswoman said. "In principle, because the deputy district judge felt that MBNA had not on this occasion provided the appropriate documents to the customer and as such was not able to rely on the clauses MBNA would ordinarily seek to rely on in these cases," she explained.

"The case is a county court case and each case is decided on its own merits and on the factual circumstances of each case. This does not set any legal precedent," said MBNA.

'Secret commission'

The credit card in question was branded with the logo of Sunderland football club and was sold to Mrs Thorius in the club's shop in 2002.

The PPI policy was strongly recommended by MBNA to her at the same time, to pay off her account if she fell ill or was made redundant. But, critically, she had not been told that MBNA would be receiving regular commission payments from the insurance provider ITT London & Edinburgh, a subsidiary of the Aviva insurance group.

Judge Smart agreed with the argument of Mrs Thorius's barrister, Paul Brant, that this "secret" commission meant the credit card deal was unfair and therefore in breach of the Consumer Credit Act.

This point could potentially undermine many other agreements where PPI has been sold by the lender alongside a loan. These include car finance deals, other personal loans and even mortgages.

"This practice is believed to be widespread and formed part of the Competition Commission's decision to prohibit the co-sale of PPI with credit in its report published on 29/1/09," her solicitors noted. "This point is likely to affect many thousands of individuals within England and Wales," they added.

Repayments

The main ground on which Judge Smart said Mrs Thorius's credit card debt was unrecoverable was because MBNA could not provide a copy of the original signed loan agreement, which is also a requirement by the Consumer Credit Act.

The Judge ordered the company either to repay Mrs Thorius's PPI premiums and interest, or the value of the commissions it had received which so far has been undisclosed. The PPI premiums, which rose each month as the credit card debts increased, amounted to £2,500 over the time the card had been in use.

The claims management industry which has emerged in the past few years has been highly controversial. Many firms advertise in newspapers and on television, encouraging people to come forward to write off their debts.

This year the authorities, such as the Office of Fair Trading (OFT), Ministry of Justice (which regulates claims management firms) and the Solicitors Regulation Authority, have warned firms not to make exaggerated claims about their ability to get debts written off because of apparent technical errors in the lenders' paperwork.

Appeal?

Since April 2007 more than 100 such firms, or those advertising for people to pursue personal injury claims, have been shut down by the OFT. But the South Shields ruling appears to open up a new and genuine line of attack for claims firms. "We have been using this argument for some time but lenders have been settling outside the courts to avoid publicity," said Mr Wright.

MBNA applied for leave to appeal, which was rejected, but it may now apply directly to a higher court for permission to appeal. Or it may be able to appeal if it can find the original loan documentation. Only when higher courts have decided the issue will the legal ramifications, and the effects on lender and borrowers, be clear.

Court lets woman off £8,000 loan

A total 6,893 companies went into liquidation, receivership or administration in England and Wales in the first quarter of 2009, a 56 percent increase from the same period a year earlier, according to data on the www.insolvency.gov.uk Web site. A record number of companies, 1,311, went into administration in the quarter. A change to insolvency law in 2003 meant companies in administration could keep trading while its assets are being sold.

Since the economic downturn the hospitality industry has suffered terribly. We are providing more advice to pubs and restaurants all over the UK.

Generally profits have been squeezed as owners have been worried about increasing their prices so they have sucked up the cost of increasing supplies

Landlords and restauranters need to be supported and also come up with acceptable offers that will increase more trade through the door. Less people go out these days which has been driven by cheap alcohol at supermarkets and the smoking ban but they can't blame these factors forever. The clever owners look for ways to increase business rather than keep complaining.

Most of us have heard of negative equity, where your house is worth less than the amount owed on your mortgage. For those that don't want or need to move house this situation may be ok if and when, in the long term, house values increase and the negative equity problem disappears.

However for those who are in negative equity and do want or need to move, the situation is somewhat different.

Whilst the scale of negative equity is far lower than it was 15 years ago when 1.5 million were reckoned to be in this position compared to an estimated 900,000 today, its effect, coupled with changes in the way building societies are offering their products, is having a marked effect on house sales.

Although interest rates have dropped there are fewer lenders in the market offering fewer products. Only a few are prepared to accept a 10% deposit with the majority of deals asking for at least 25%. With an estimated 2 million existing home-owners not able to raise at minimum a 10% deposit from the sale of their home it is not surprising that house moves have stagnated.

This of course has a knock on effect at the lower end of the market. With people unable to move, first time buyers, who may already be having trouble raising a deposit, simply do not enter into the frame.

Ironically whilst Building society interest rates have rarely been so low, falling house prices, negative equity and high deposits mean that many home owners are trapped and having to sit tight for the time being.

HM Revenue and Customs (HMRC) are running a pilot to test the benefits and impact of working with private sector debt collection agencies in recovering taxes.

Although many organisations, including other government departments, use debt collection agencies successfully to help them with debt recovery, this is a first for HMRC.

The agencies will take some debts across a range of taxes covering both businesses and individuals. The agencies will be involved in 'resolution work' only, and will not do any home or face to face visits or litigation work as part of the pilot.

The pilot is to run for six months.

200,000 people in Britain are at risk from illegal loan sharks because they cannot access credit from traditional lenders according to a new report published.

A combination of the reduction in sub-prime lending, often known as "door-step lending", and the economic downturn may lead to more people having to use illegal money lenders according to the independent think tank the New Local Government Network.

The report predicts that an additional 35,000 people are likely to have to use loan sharks during the recession but admit that the figure could be even higher. The think tank is urging local authorities to put additional resources into local credit unions and even to use new Council Banks to offer affordable credit to people who can't access high-street loans.

NLGN warns that the legal sub-prime market has declined since the recession. It predicts that an additional 250,000 people will lose access to doorstep lending under the downturn. This period has also seen the number of loan refusals by the Government's emergency Social Fund increase from 316,000 to 596,000. The report warns that customers who would have previously used these services may now have to turn to loan sharks.

It argues that local authorities need to step in to protect vulnerable people in their local community by offering a range of support including more Credit Unions, mapping predatory lending and enhancing enforcement against loan sharks.