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Personal Finances

Farleys’ Financial Crisis service are well placed to give advice and guidance as to how to best protect and insulate your personal finances in face of the economic downturn.

You may feel the need to seek advice with regard your personal finances as a result of the recession or other ‘life event’ (unemployment, divorce, or illness) that has reduced your household income.

In any case, it is sensible at this time to take a more proactive stance with respect to safeguarding your finances and to protect your position in light of economic uncertainties.

Prior to the credit crunch, which hit our economy in the summer of 2008, things were very different in 3 main ways,

    • The value of our property was increasing, 10%+ year on year. 
  • The economy  was expanding leading to job security in most sectors.
  • Credit, both unsecured and secured, was freely available at relatively low rates.

These factors made a lot of people feel confident enough to use credit (loans, credit cards, store cards etc.) to supplement their living expenses.  They did this safe in the knowledge that any unsecured debt could be consolidated when they came to remortgage their property.

Since the property market went into reverse, and equity reduced, the option  to consolidate unsecured debt and credit is no longer freely available. There is a crisis in confidence, not just in the financial sector but right across the economy and through society. Fear of the economic downturn and the possible consequences means most people are looking to re-evaluate their financial position.

It is a sensible move for most households to look at ways to protect themselves as there is now a fear of the effects of the credit crisis, and perhaps more practically, no safety net of rising property prices.
So What Can Be Done?

Our Financial Crisis team will help you to take a long hard look at what you spend and how you pay for it – its not ‘rocket science’, but it is the one sure way to ensure you do not spend beyond your means and have to incur credit supplement your living expenses.

Budgeting Advice – How Much Do I Spend?

An often overlooked, but obvious approach is to consider at ways of reorganising your finances.

  • Take time going through your bank statements taking a detailed look at how much you spend and on what.
  • Make a daily log of everything you spend, record all of your outgoings over a month period and then compare against your income.

This will give you a fresh perspective on your finances and help you to plan a lifestyle to live within your means.

  • If big budget items are scheduled, such as summer holiday, then a sensible way to save is to set up a separate account specifically for that purpose and make regular deposits via standing order to it.  This will reduce the need to pay for such items on an interest-incurring credit card.

It should be possible to make adjustments to cope without credit, it may make for a difficult transition in lifestyle, but once achieved you can shake off the debt hangover.

If, however, your household has been it by one of the ‘life events’ then you may need to take more urgent professional advice.

Should you already be in a position where you have significant lending and are struggling to meet monthly repayments then you should seek urgent professional debt advice.

We have specialist debt advisors within the Financial Crisis team that give free debt advice, and guide you on the best options given your particular circumstances.

We advise on bankruptcy, Individual Voluntary Arrangements (IVAs) and debt management plans (DMPs).
Income Maximisation

Another thing to consider is income maximisation. You may be able to increase your household income in the following ways,

Welfare Benefits

The government is mindful that house repossessions are increasing and in light of this has increased the help available to people with mortgages, to enable them to carry on paying the mortgage if their income has been reduced;  typically due to unemployment.

In certain circumstances the government will now pay interest on a mortgage loan up to £200,000, and the time from which this help is available has been reduced from six to three months.

Additionally, there are a range of welfare benefits that may be available to your household should unemployment, illness or disability become an issue.  Benefits such as Job Seekers Allowance, Incapacity Benefit, Income Support, and Disability Living Allowance may be available and would increase your household income.

Farleys Financial Crisis team is able to advise on these matters, calculate what benefits you may be eligible for and help you claim them.

Payment Protection Insurance (PPI)

Farleys Solicitors are at the forefront of this rapidly expanding area of law. There have been approximately 12 million loans sold to customers, who have also taken out Payment Protection Insurance (PPI) at the same time, paid as a one off sum to the loan provider. In short, this PPI payment will, in most cases, have been added unfairly.

If you have taken out a loan in the last six years, you may have a compensation claim that Farleys will be able to help you with on a no win, no fee basis. Should you think this applies to you then please contact us and we will give you free advice as to whether you have a claim.

We are happy to assess any loan you have – just send us a copy of the agreement and we will advise on whether you have a claim, free of charge.

Farleys are regulated by the Solicitors Regulation Authority (SRA), meaning we can only give you honest, fair, and impartial advice. In the field of debt management, there are many unregulated providers, often more interested in selling you a product than helping your situation.

Always seek advice from properly regulated providers and never, ever pay for debt advice.

If you would like to discuss any of the points above, contact a member of the Financial Crisis team at Farleys Solicitors now on0125 460 6090 or you can e-mail us.

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