No suprises...

... for money advisers in the report by the BBC about Banks wilfully selling their customers unaffordable loans. We see them all the time, day in day out. And they get away with it, time and time again. There's little your client can do ("but you signed that had read and understood it...") and the government won't do anything about it...

10 (Grand) Don't Come For Free

New figures show that Bankruptcies are on the up again: 10,901 in the first quarter of this year. That's a 28% increase on the same quarter last year, and the fact that accountants are gloomy about it means things must be bad news.

Many money advisers will own up to contributing to that figure, and that's not necessarily anything to be ashamed of: (excluding the high fees) bankruptcy is now easier, doesn't last as long and is a sensible solution for many debtors. By changing the law surrounding bankruptcy, the government have 'increased demand' for it. And all this is despite the prohibitive fees charged for issuing your own petition (£310 + £150 County Court fee). If the fees weren't there, you would see the figures double or probably treble.

This is the real flipside to the economic 'feel good factor' that is rammed down our throats by the media. It's the only way out for many people trapped in the debt spiral - the veritable 'elephant in the living room' that no one wants to talk about but cannot be ignored for long.

Middle Class poverty

You know things must be bad when even the bourgeoisie start to moan. All I can say is 'Boo fucking hoo'...

Housing Market recovery? Yeah, right...

This press release, and subsequent (though patchy) coverage in the National Press is a sign that mortgage possession actions are on the increase. Indeed, the statistics show the highest quarterly figure in the past 10 years.

Although the Guardian tries to stay optimistic ("The figures do not show how many houses are actually repossessed because not all orders are carried out. In many cases, a compromise will be negotiated or an order will be suspended"), money advisers know that those compromises often suit the borrower rather than the lender: they may entail further borrowing, a remortgage or unrealistic levels of repayment.

I can't say that I've managed to notice any changes 'on the ground' to the numbers with such problems, but given these figures, it would seem to be only a matter of time.

Rate Tarts of the World unite

Anyone who is sick and tired of hearing that well-worn locution 'Political Correctness' will at least have a notion about what lies behind its use as a smokescreen. Language has meaning, and language can be used to wield power and control. In an Orwellian sense, the use of words can also imply contrary ideas, in order to bolster a particular ideology.

In this way, the press uses the term 'rate tarts' to describe people who seek to pay no interest on their debt by transferring credit card balances, taking up 0% or low introductory rates of interest. There you go: the laudable intentions of those who wish to avoid paying interest in an astute manner are no more than whores, prostitutes, promiscuous. It suggests they are somehow beneath contempt, the lowest of the low, or just plain embarrassing.

The banks have complained that this activity is costing them money. What they actually mean, is that they make less money than they would otherwise.

And now, they've decided to 'clamp down' (again, implying illegal activity) on those of us who wish to extend ourselves a little bit of free credit. So the die has been cast, the gauntlet thrown down. Touché. Rate Tarts are going underground. Time allowing, loopholes will be sought and fully publicised on this weblog.

Grant Wankshaft

Even those who view students in the same light as the infamous Viz character, Student Grant may be inclined to be more sympathetic after hearing the news that the average student debt has risen by 12% over the last year. Ironically, the fact that the popular student stereotype is spoilt and middle-class may mean that it was ahead of its time; after all, who else but the middle classes will be able to afford an education at this rate?

The other irony is that it's Barclays Bank that publishes the recognised leading research annually. It's a bit like the hangman writing a thesis on miscarriages of justice.

In the meantime, we await a new Viz character - 'Thieving Usurious Scumbags'.

Fight back?

More bourgeois myths: that you can beat the system by asserting your consumer rights, or using ‘consumer power’. Having said that, there are some interesting ideas in this article. The offline title of this article was ‘How to be a Guerrilla Consumer’, but to be honest, you’d have more effect being a true Guerrilla.

42,000 happy (shiny) people

If you’re one of the 42,000 people discharged from bankruptcy today, congratulations. And, yes, it’s not an April fool.

This has come about because of the introduction of the new bankruptcy legislation 12 months ago. Prior to December 31^st 2003, you had to wait 2 to 3 years to be discharged, but in the 3 month run up to the rule changes, all new bankrupts would be discharged by the first anniversary of their bankruptcy.

We don’t share KPMG’s misgivings about the small number of Bankruptcy Restriction Orders made in the last year. ‘Human Rights loophole’? – Boo-Hoo. Maybe Michael Howard writes their press releases. Once again, the creditors propaganda machine pumps out the myth that debt is the fault of the debtor, and this is further underlined by their reference to debtors approaching their bank manager for advice. How removed are these people from reality? People don’t get advice from Bank managers about their debts, unless that advice is to consolidate their debts still further. The bourgeois idea of the cautious, conservative and helpful bank manager is a myth. They are sales executives driven by targets to sell, sell, sell. How about making them ‘culpable’ in such cases? If only the banks could be ‘co-respondents’ in bankruptcy!

The human race is living beyond its means

So if you are living beyond your means, take comfort: it’s not just you, but the whole of the species. Perhaps anthropologists could form some interesting conclusions from that?

Not strictly debt advice, we know, but the arrogance of capital is that, like a really bad parent, it says ‘do as I say and not as I do’. But everyone is doing exactly as it does. As if we needed reminding, the mass-consumer society, the pursuit of personal profit at any expense is not the way to go.

The Micawber Principle needs to be applied much more widely it seems.

Don’t call us, we’ll call you

No sooner does Call Centre Confidential call it a day, than the Guardian informs us that we’re less then happy with Call Centres.

No surprises there then. But fancy getting revenge by playing muzak to some poor sod on the other end earning bugger-all-money – as if it’s their fault? And you’re paying for the privilege. Daft.

In case there’s any doubt, advice workers spend a whole load of time negotiating call centres, as well as automated services.

All of this is apt because very soon, people in debt will be able to reach a National Call Centre for debt advice. Not to be confused with National Debtline, this is a government funded initiative which intends to make it look like it is doing something about debt problems (cynicism alert!). This will be much outlined over the coming months as the roll-out develops.

Much will have more

It’s no surprise that creditors, or any other business, are always trying to increase profit margins. But, of course, that doesn’t mean we can’t do our little bit to keep those profit margins down, and perhaps prevent us from being ripped off so much in the process.

An article in the Guardian this weekend highlights the growing trend for businesses to use 0870 (or similar) numbers for customer contacts. These numbers are commonly known as “National Rate” numbers – i.e. you pay a standard rate wherever you are calling from. It’s misleading, in that the rate you pay isn’t necessarily the “National Rate”, but also because of the way they are set up, the creditors are making profits on each call of several pence per minute, per call.

The fight back is being led by this website. You are able to search for alternate numbers that don’t put extra money into the creditor's pocket. A good idea.

Not Enough Debt

No sooner was the ink on the virtual parchment dry than we became aware of this little nugget in recent press. It seems that really, debt problems are a figment of our imagination. So maybe it’s time to wind up this website already…

…Not. Of course, it’s telling that all this Orwellian doublethink is coming from an Investment Bank. People are rightfully wary about taking financial advice from gamblers – “put it all on lucky 7” – we think not. But that’s what this crowd essentially are. Admittedly, they have bigger expense accounts and sharper suits. But that’s about all.

But seriously for a moment, just whom are they talking about? They can’t be talking about any of our clients that’s for sure. I guess the message may be that if you’re able to invest money with Dresdner Kleinwort Benson, then you could afford a little more exposure to debt. And who are we to argue with that?

(Incidentally, we could not find the actual report and press release on the DKB website. Anyone who does and lets us know wins an Easter Egg)

Why?

In creating this weblog, we decided that there was a gap that we needed to fill. We've looked - there's nothing out there that provides a unified source of information for matters related to debt and credit matters (pertinent to England and Wales) in a public format. And certainly not one from the perspective of debtors and money advisers. And further, one that does not 'toe the line' of any one organization or interested party. The creators of this weblog work for all organizations within the debt advice sphere - Advice UK, Citizens Advice, Local Authority Welfare Rights units and similar organizations. But at the same time, they are not unafraid to 'say what they really think' about important matters and take a subjective (or ‘partial’ as opposed to ‘impartial’) standpoint where one needs to be advocated. We will not praise political parties or court the government simply because they advocate half-measures which might appear to be progressive.

That's not to say we don't have principles, that we don't stand for things: we believe in the profound transformation of society. This will become apparent. But all too often, these beliefs are inhibited by our employer’s policies of 'impartiality' and commitment to a 'responsible' development of social policy. We don’t want to spend the rest of our lives, and the foreseeable future merely ‘inching forward’ to a distant goal. We want it now.

A principle for our times?

Money advisers will be familiar with Mr Micawber’s principle, even if they are unfamiliar with the work of Charles Dickens, and the book from which the character, Mr Wilkins Micawber, quotes this line David Copperfield.

Why? Because it’s what they are spend most of their time doing: drawing up budgets from client’s income and expenditure and trying to get them to balance, in order to help the client live in line with the ‘Micawber Principle’.

However, the Wikipedia definition of Mr Micawber’s phrase is problematic: if the avoidance of debt is the key to long term happiness, then one would assume that those without debt are happy. Yet in the society we live in, this is not proven. Any money adviser will tell you that whilst it is certainly true that the most common reasons for debt are beyond the control of the individual debtor (unemployment, death, illness, relationship breakdown), we live in a society that thrives on a conceit of alienation: that the use of credit to buy consumer goods is encouraged, praiseworthy, necessary, even almost a civic duty; but that the flipside – living beyond one’s means, is unacceptable. And consumerism does not (can not and will not) bring real happiness. Debtor’s Gaol may well be long gone, but creditors today refer to debtors whose accounts are in arrears as exhibiting “delinquency”. Seriously.

The ‘Micawber Principle’ is still with us, and always will be as long as the concepts of credit and debt persist. Let’s hasten their end!