The trend of people being subjected to financial difficulty is increasing. The easy access to credit may provide convenience but it can also lead to overspending and consequently, overindebtedness. Some life-changing events such as loss of job and divorce can substantially add to debts. Being overindebted, people tend to resort to subprime credit given that their credit rating is poor and deficient. This report is aimed at evaluating the area of subprime credit and presenting alternatives where overindebted individuals can ask for money advice services which can provide them solutions in improving their financial status. Also, related initiatives that can contribute in improving financial literacy and capability will be explored. It is also concluded in this report that the government, regulatory bodies, banks, money advice agencies, individuals and their family, and other stakeholders have roles to execute towards achieving financial capability skills important in effective and efficient managing and controlling finances.
[...] It is best suited for those who have overwhelming debts and with little hope to clear or settle them. Often, significant assets such as home equity, etc. are used to settle debts. Restrictions are also imposed on the client's ability to obtain future credit, establish business, and hold public office (CCCS, n.d.). Another organisation offering free money advice services is Payplan. Payplan is based in Lincolnshire offering a national service helping 100,000 people every year. They offer free debt advice and debt solutions services to anyone struggling with financial difficulty. [...]
[...] Like the CCCS, Payplan also offer money advice services on IVA, DMP, and Bankruptcy. In addition, it also offers Trust Deed and Mortgage advice (Payplan, n.d.). In addition to the organisations offering money advice services, there are also companies offering software as a tool for money advice. The PGdebt software was developed by PG Computing, as requested by the Scottish Executive, in order to calculate the debt arrangement schemes (DAS). On the contrary, the Lisson Grove Program is designed to help money advisers in calculating housing and council tax benefits, among others. [...]
[...] Consumers hurriedly withdrew their money in fear of losing it because of what is happening to the bank. However, they were also informed that Northern Rock savers are assured that their savings are guaranteed by the government and fully protected. The government had pressured Northern Rock management to find a buyer who can inject money to keep it afloat and repay debts. In case of failure, it would mean that these emergency taxpayer loans balloon to £45bn by February (Daily Mail, 2007). [...]
[...] It will be a single, comprehensive and accessible source of information where everything they need to know in financial management such as employees' maternity and paternity rights will be included. There will also be web-based calculators to help new moms in calculating their costs of returning to work. Distribution channels will initially be at HR departments of companies and soon be available at family-oriented retail outlets, relevant government departments, and family-based services, such as children's centres and health professionals (FSA, 2006a). Money advice as a measure will help people understand the financial issues they need to deal with and the financial products and services that can help them. [...]
[...] In this era where debt problems are by and large increasing, the money advice agencies are no doubt helpful. However, people should not settle for being always seeking money advice, they should be able to sustain efficient management and control of their finances. Given the increase in number of organisations as well as regulatory bodies providing seminars, conferences, and trainings to give information on financial products and services, people should grab the every opportunity to help them achieve strong financial capability skills. [...]
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