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Archive for February, 2018

Are you sitting on a mortgage time bomb?

Are you sitting on a mortgage time bomb?

Currently, owning your own property is a luxury that many people will never experience…

With rising interest rates and the cost of living and property rising each, many millennials are turning to renting as their only option, when they fly from the safe and secure nest of their home with their parents. Having said that, many people do have mortgages, which come in different forms. If you currently have an interest-only mortgage, you may want to consider the fact that you are leaving yourself exposed to a “mortgage time bomb”, a financially insecure situation.

Read on to find out more about interest-only mortgages and their risks?

What is an interest-only mortgage?

When you take out an interest-only mortgage, you will only be required to pay back the interest on monthly payments. The term is usually between 5 and 7 years. After the term is over, you have several different options available to you. You can either refinance your home, make a lump sum payment or begin paying off the principal of the loan. Nearly one in five homeowners currently have this of mortgage.

Why might they be harmful?

The Financial Conduct Authority (FCA) has estimated that the end of these mortgage terms will peak in the next 10 to 14 years, but it has been revealed that many lenders have been ignoring letters from lenders, sparking concern that some homeowners do not have any plans in place to pay the final bill.

In 2018, there were 1.67 million full interest-only and part-capital repayment mortgages that are still outstanding, representing 17.6% of all mortgages in the UK.

Why are people ignoring their payments?

There are several reasons why homeowners might be choosing to ignore letters about their mortgage repayments. While some do have adequate payment plans in place, others are choosing to bury their heads in the sand over fears that they will never be able to completely pay back what they owe.

There is also the issue of people not trusting their lenders and therefore feeling suspicious about any correspondences they receive from them.

How can WE help?

We understand that, as a homeowner, your needs and requirements are specific to you, which is why we can offer a completely bespoke service. Whether you need advice about a payment plan for your mortgage or need to talk about how to deal with lenders, we’re happy to help. Find out more about our services call 0330 159 5820

Do you recognise the signs of Corporate Insolvency?

Do you recognise the signs of Corporate Insolvency?

Running your own business is both stressful and time-consuming and as a CEO or director, it is fairly easy to get caught up in the day to day tasks and not realise the fact that your company is hurtling towards the disaster that is corporate insolvency.

Corporate insolvency is when your businesses financial circumstances mean that you are unable to pay your debts, and if you find yourself in this situation it can be extremely damaging to your business.

Luckily there are a number of warning signs that precede corporate insolvency, so keep your eyes peeled for if you can notice any of these things happening within your company.

You have reached maximum borrowing

Most businesses need to borrow money at some point, but reaching the limit of your bank overdraft tends to be a sign that you should be concerned about corporate insolvency. If suppliers are refusing you credit and you do not own sufficient assets to obtain a secured short-term loan, this can also be a problem.

There’s no money to pay staff wages

If paying pay staff wages is proving to a challenge and you will only very slimly be able to make the payments that you need to, this is a sure sign that you are heading for insolvency. Technically, if you are unable to pay staff wages then you are considered to be insolvent.

You are receiving demands for payments

If you have received a Statutory Demand from a secured or unsecured creditor, or are constantly receiving threats of legal action against the company for unpaid bills, it may be time to consider the fact that your company could be headed for insolvency.

A Statutory Demand is often followed by a winding up petition, which could effectively mark the end for your company.

You don’t have the right systems in place

Without the use of cash flow forecasts, aged debtors reports, bank reconciliation’s and sales forecasts, it can be difficult for businesses to assess their performance and gauge how secure they are financially.

It also means that you are unable to see how much money you owe, which puts your business in a very vulnerable situation regarding your debt.

We have a wealth of experience dealing with companies slipping down the path that is “corporate insolvency”. If you are concerned about any of the issues discussed in this article, get in touch with us today to discuss your individual options.

 

What caused the Carillion collapse?

If you follow the news you’ll probably be aware of the Carillion collapse, which has resulted in the UK’s second-largest construction company buckling, due to a colossal £1.5 million debt pile. Despite numerous discussions taking place between the company, its lenders and the government, nothing could be done to save Carillon, who employ around 20,000 in the UK and even more abroad.

So, where did it all go wrong for Carillion and what exactly caused this epic collapse?

Who are Carillion?

Carillion is a company that specialises in construction but also deals with management and maintenance. The firm has a plethora of experience on large private sector projects such as the Battersea Power station redevelopment and the Anfield Stadium expansion, both of which have contributed to the corporation becoming a household name.

While Carillion does work on private sector projects, it is perhaps best known for being one of the largest suppliers of services to the public sector. One of the company’s most notable achievements is being part of a consortium that holds a contract to build part of the forthcoming HS2 high-speed railway line, and it is the second largest supplier of maintenance services to Network Rail. Furthermore, Carillion also maintains 50,000 homes for the Ministry of Defence, manages nearly 900 schools and manages highways and prisons.

Just this week, the BBC announced that the collapse of Carillion will lead to the delayed opening of Liverpool’s new Royal Hospital. A spokesperson for the BBC confirmed that it will be unlikely that the £335 million infrastructure will be completed in 2018.

What went wrong for the firm?

Carillion employs 43, 000 staff globally, and a large company like that is often not as averse to taking risks as smaller ones might be.

It has been suggested that the company overreached itself and was drawn into a number of risky contracts, such as the new Midland Metropolitan Hospital, that didn’t pay off in the way that was initially expected.

Carillion were facing payment delays in the Middle East that hit its accounts hard, causing them to issue three profit warnings in five months and wrote down more than £1bn from the value of contracts. These actions meant that it was much harder for the company to manage its huge £900m debt pile and £600m pension deficit.

Why does the collapse matter so much?

The failure of Carillion is significant because the company is such a large supplier of goods to the public sector, meaning that massive disruption could be set to take place. Furthermore, a lot of jobs hang in the balance and there is potential for redundancies.

Are you worried about the financial reputation of your business and is corporate insolvency something that is playing on your mind? Get in touch with us today to find out how we can help you.

Debt Strategy experts Bell & Company weigh in on the insolvency figures from 2017 and consider what 2018 may have in store.

With the New Year just starting, Bell & Company, are keen to decipher the insolvency figures from 2017, and consider what they may mean for 2018.

According to statistics released by The Insolvency Service, an estimated 4,152 companies entered insolvency during the third quarter of 2017. While this number may seem significant, this number has actually decreased by 12.5% from the second quarter of the year.

Things may be looking somewhat promising for companies, but unfortunately the same can’t be said for individual insolvency figures. With 25,479 individual insolvencies in the third quarter of 2017, a figure that has risen by a 10.6% in comparison to the previous quarter, Bell & Co is expressing its concerns for the financial stability of Britons.

James Bell, Bell & Company Director, said: “These latest figures regarding personal insolvency are extremely concerning and display the extent at which individuals are struggling to remain financially secure.

“Figures relating to people becoming insolvent is rising again for the first time since 2009 and is in part due to people becoming more tempted to borrow money. With exceeding interest rates, paying the money back is proving to be impossible for many.“

Bell & Company are renowned in the UK for their specialized team of debt strategists that provide expert advice on personal and business insolvency.

The company has saved businesses and individuals millions of pounds on their debt repayments, and offer a free, no-obligation consultation to anyone in debt or requiring an assessment of their finances.

James continued: “We urge anyone that has recently become insolvent or is concerned about the prospect of this happening to get in contact with us so that we can offer them a solution that is tailored to their individual needs and circumstances.”

The personal debt mountain in Britain ballooned to a staggering £1.6 trillion in 2017 as more and more people have turned to credit card spending and car finance deals to see them through.

With figures as worse as they were during the financial crisis, 2018 could prove to be a bleak year for both personal and corporate finance.

For more information about personal or business insolvency or to get a free financial review, call Bell & Company on 02895 217 373 or email [email protected].

 

About Bell and Company

At Bell & Company, our professional staff includes legal professionals, accountants, and insolvency experts.  We have extensive expertise coupled with a highly specialised skill set which enables us to specialise solely in this niche area. We have always and will always offer a completely free, no-obligation consultation. This is a thorough financial review and our staff will put a lot of effort into assessing the different options available to you.

Implementing your New Year’s Resolutions

With 2018 in full swing, many of us are focussing on staying on track when it comes to achieving the resolutions that we set for ourselves this year.

For a lot of people that means tackling debt that may have crept up to higher levels over the festive period. With presents to buy and more social occasions to attend, it’s easy to let your finances spiral out of control over Christmas. If you are keen to get back on track, check out our tips for lessening your debt and ensuring this year is your most financially comfortable one yet.

Be aware of your borrowings

The first step you will need to take when it comes to reducing your debt is being aware of how much it is that you actually owe. Also get to grips with how much interest you are paying, and to whom it is being paid to. If you already have a credit card or loan with a particular company, it is unlikely that they will allow you to take out another one to contribute towards lessening your debt.

Transfer to a zero interest credit card deal

If your debts are substantial, it’s unlikely that you will be able to move them to one credit card account, but you do have an option. You could move as much as possible to a zero interest credit card deal. You would need to pay the minimum allowed on this account and then focus your efforts on paying off the more expensive debt that you weren’t able to pay off.

Check out all of your other finances

We all have a number of outgoings to deal with each month and in the interest of reducing your debt it may be worthwhile seeing if any of them can be altered in any way to help you reduce your debt.

Utilities – Gas and electricity prices are up following recent rises, so if you are on a standard tariff or fixed deal that is about to end, it may be worthwhile shopping around and seeing if you can find a better deal elsewhere.

Mortgage – For most people, this is the biggest expense each month so it can be helpful to discuss your options with a mortgage advisor. If you have had the same home loan for a long time you may be able to reduce the interest rate by remortgaging.

If you are concerned about any of your personal debt, property debt and/or negative equity we are able to offer industry expert advice to help you overcome your problems. Call Bell & Company today to discuss your circumstances with one of our skilled advisors, experts in debt.

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