Know your rights – April’s debt news

posted by in Budgeting, Debt news

Know your rights


April has come and gone, the Easter eggs have been polished off and summer is around the corner. But for us here at StepChange Debt Charity it’s been a very interesting month in the world of debt news.

(If you think, like we do, that debt news is interesting!)

New mortgage rules: What to expect

If you’re considering buying a house anytime in the future, new rules may make it harder. County Court costs have rocketed and in a month when the government say the economy has bounced back, we’ve looked at the nation’s household finances – with some surprising results.

If you buy a home anytime in the future your spending habits will be scrutinised under new rules called the Mortgage Market Review. Banks are being asked to delve into your finances and future-proof your application to ensure you can meet payments not only now but also if the base-rate increases or your situation changes.

This may result in a two-three hour meeting with the bank where you’ll need to supply not only details of your earnings but also your spending. Questions may be asked over how much you spend eating out, down the pub, gym memberships, childcare, haircuts and life changes like plans, to start a family.

Should you be worried? Well no not really; living to a realistic budget is just good sense. Getting debt free is the most important thing. If you want to move home you’ll just have to show you can afford it. The new rules are an extra hoop to jump through but ultimately they are in place to protect you.

County Court costs to rocket

In an attempt to reclaim the cost of court services the Ministry of Justice has increased the fees people have to pay, some significantly so.

From 22 April the cost to petition for personal bankruptcy goes up from £175 to £180 taking the cost of declaring bankruptcy to £705.

A general application, or N245 form, will increase from £45 to £50. The N245 form is used to vary a County Court judgment (CCJ) payment or suspend bailiff action.

If someone was being evicted from their property and needed to ask for more time the cost has increased from £80 to £150. So too has the cost of asking for a hearing to move to a closer court.

While these costs are an added expense, arguably at a time when people are least likely to afford them. If at any point you do need to pay for a court service and you’re having financial difficulty we can advise you on ways to cover the cost.

Living ‘Life on the Edge’

The government has said that the UK is on the road to recovery with economic measures returning to pre-2007 levels. While that’s good news, with increasing numbers of people seeking our help we’ve delved into things a bit more deeply. Our ‘Life on the Edge’ report takes a look at which UK households are struggling, and why.

For example, did you know that families, average earners and full-time workers are most at risk of falling into debt? Take a look at what we found – we’d be interested to know what you think using #lifeontheedge

Happy birthday to credit unions

This April saw the 50th anniversary of the first credit unions in Britain. Originally set up to help people rejected by banks, today’s credit unions offer a whole host of helpful lending and saving options to people of all incomes.

You can use a credit union to save, bank, open an ISA, get a loan or even a mortgage.

To join your local credit union you normally need to have lived in the area they cover for a certain amount of time, or have a ‘common bond’ with it, like a job. There are other credit unions too that are open to certain professions, like the Police or those working in transport.

We love credit unions, so learn more by finding your credit union.

Car insurance ‘drops to a four-year low’

Good news for drivers that the brakes have been put on car insurance premiums. has recorded a 19% drop in the cost of insurance compared to last year. That takes the average comprehensive car premium to £596, £140 lower than in 2013.

The saving is being felt by men and women drivers in all age groups: the average premium for a 17-year-old fell £1,400 a year, while those for the average 50-year-old fell to £511.

However, caution is being urged by the industry; these reductions are unlikely to last.

Google gets tough on copycat websites

And lastly, we thought you’d like to know that Google has banned websites falsely claiming to offer free government services. When people need debt help, thousands go online and in the past have been tricked into using fee-charging debt management companies they thought offered ‘government debt help’ (read what we think about these Your debts written off adverts).

Ha! Free debt advice 1 v Scam artists 0. More people should now be able to find free debt help when they need it most.

That’s it for April. We’ll be back next month for more debt news.

Tags Budgeting Debt news