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"However, the concern is what happens when rates rise? Half a percentage point rise in rates would add £60 a month to a £150,000 repayment mortgage that could well push many people into insolvency."

Imagine then if we had a 1% 0r 2% rise then?

Absoloutley ridiculous scenario, this country is potentially in a huge mess!

http://news.bbc.co.uk/1/hi/business/6623465.stm

Seems creditors aren't playing anymore . . .

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"However, the concern is what happens when rates rise? Half a percentage point rise in rates would add £60 a month to a £150,000 repayment mortgage that could well push many people into insolvency."

Imagine then if we had a 1% 0r 2% rise then?

Absoloutley ridiculous scenario, this country is potentially in a huge mess!

What sort of idiot puts themselves in the position of having a mortgage loading where the cost of a family meal out would plunge them below the waterline? I genuinely find it hard to believe such people exist. I do absolutely believe there are people to whom 60 quid is a hell of a lot of money and you'd never dream of "spending it all in one shop" (as they say), I was one of them not so long ago, but I don't believe they have massive mortgages. If you are running on that sort of margin and the central heating packs up or a few roof tiles come loose what are you going to do? Are we to believe there are people sitting in their living rooms in the freezing cold with water drip-dripping onto their sofas and TVs? Just doesn't seem plausible. I think you'd have to be looking at a few hundred quid minimum as an increase and even then it would take a while to wear people down.

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oh dear, iva's are labours attempt to stop people delaring bankruptcy and hide the true extent of debt

this is from the same gov that brought you asbos to stop the prisons overcrowding by keeping crims on the streets - which results in more crime

ivas may hide the debt - but it will only increase it in the long term, as with crime, if people don't have any responsibility for their actions

looks like the spin on which they have been elected is blowing back in their faces

Edited by dnd
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What sort of idiot puts themselves in the position of having a mortgage loading where the cost of a family meal out would plunge them below the waterline? I genuinely find it hard to believe such people exist. I do absolutely believe there are people to whom 60 quid is a hell of a lot of money and you'd never dream of "spending it all in one shop" (as they say), I was one of them not so long ago, but I don't believe they have massive mortgages. If you are running on that sort of margin and the central heating packs up or a few roof tiles come loose what are you going to do? Are we to believe there are people sitting in their living rooms in the freezing cold with water drip-dripping onto their sofas and TVs? Just doesn't seem plausible. I think you'd have to be looking at a few hundred quid minimum as an increase and even then it would take a while to wear people down.

Oh, there are plenty of them out there! And it may only be £60 a month, but it tots up to another £720 a year that has to be found to satisfy the bank. If you've a couple of sprogs, childcare bills, ever increasing council tax, high inflation on most of the goods you buy and rising food costs then finding another £720 a year when your boss is only offering (below) inflationary salary increases is not going to be much fun.

I'm not in this situation, but I see many who are and I sure hope they know how to reign it all in a bit!

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Add to this that the £60 would more or less have found its way to the UK's service industry (seems the only thing we do anymore), so there's a couple of Eastern Europeans serving at Starbucks that might get laid off when joe public starts tightening the purse strings.

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I'm not in this situation, but I see many who are and I sure hope they know how to reign it all in a bit!

This will be a real problem this time.

The marketing machine is out of control and convinces many people to spend their way to happiness. IMO there was much less of this around during the last crash, people in general knew how to be more frugal and stick to a budget.

The spend now, pay later / pay never lifestyle is a much more recent phenomenom. I think many people will struggle to adjust, and those that do may be extremely unhappy doing so. They have come to expect a certain lifestyle. The are told they need to have certain things to be happy. Our culture is very material and aspirational.

Expect lots more mental health breakdowns and suicide as a result.

F

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What sort of idiot puts themselves in the position of having a mortgage loading where the cost of a family meal out would plunge them below the waterline? I genuinely find it hard to believe such people exist. I do absolutely believe there are people to whom 60 quid is a hell of a lot of money and you'd never dream of "spending it all in one shop" (as they say), I was one of them not so long ago, but I don't believe they have massive mortgages.

But the problem is that the people to whom £60 is a lot of money, have spend the last few years borrowing on credit cards, to buy new cars and holidays etc. To them, £60 a month is a lot of money, in that it is the monthly repayments on another £3000 unsecured loan, or the minimum payments on a £5000 credit card balance. This is where the gearing that has allowed such people to appear to be very wealthy over the past few years starts to work against them - tiny changes in their monthly cashflow gears up to difficulty in servicing thousands of pounds of existing credit, or being denied tens of thousands of pounds of future credit, and it is this that makes the difference.

If you are running on that sort of margin and the central heating packs up or a few roof tiles come loose what are you going to do?

MEW? Credit Cards? Loans? Overdraft? This is typicaly what people would do.

Are we to believe there are people sitting in their living rooms in the freezing cold with water drip-dripping onto their sofas and TVs? Just doesn't seem plausible.

These would typically be DFS sofas, probably currently in a period of "pay nothing for 12 months" followed by 60 months at 30.1% APR... or widescreen plasma TVs worth 3 months salary bought on the credit card... yes I can see how getting water on them would be a concern.

Edited by RJG18
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I don't think IVAs are Labour's attempt to hide the extent of debt . . It's just an opportunity to avoid bankruptcy and the effective shut down of all your financial dealings for 6 years. What's wrong with that ?

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oh dear, iva's are labours attempt to stop people delaring bankruptcy and hide the true extent of debt

Tories in 1986 actually. It just took 10 years of Labour to make them such a common necessity.

Also as noted the creditors aren't playing nicely at all, and are approving IVAs only with minimal contingency, and leaving nothing for emergencies, and for many people in IVAs £60 is enough to push them into failure and hence bankruptcy. It's stupid but it's now being laid bare and slowly some people are waking up, but for too many the lure of that 36" plasma TV is just too much. The credit sqeeze has got a long way to go before aspirations are forced back into line with reality.

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I don't think IVAs are Labour's attempt to hide the extent of debt . . It's just an opportunity to avoid bankruptcy and the effective shut down of all your financial dealings for 6 years. What's wrong with that ?

I think you grossly overestimate the effect bankruptcy has on your "financial dealings".

That said IVA's are not suitable for 95% of those who take them on. Better to bite the bullet and declare bankruptcy for most.

Time and time again I see people who have struggled with an IVA for years and years and eventually get made bankrupt anyway.

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oh dear, iva's are labours attempt to stop people delaring bankruptcy and hide the true extent of debt

Was not the goverments action. What actually happened last year was that the banks wanted the government to give them more powers to collect the debts and they said NO. They then got together and decided not to play ball with IVA's.

this is from the same gov that brought you asbos to stop the prisons overcrowding by keeping crims on the streets - which results in more crime

ivas may hide the debt - but it will only increase it in the long term, as with crime, if people don't have any responsibility for their actions

The debt is still there and most refused IVA's will end up bankrupt. The problems been pushed down the pipe a bit, it will now get worse quicker.

looks like the spin on which they have been elected is blowing back in their faces

Edited by deano
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I genuinely find it hard to believe such people exist.

Quite a few around the office where I work that are just like this and they're not minimum wage slavers either... typical salary is over 30k.

There was quite an uproar when HR suggested changing the pay day from day in advance where the correct day was/is a bank holiday to day after. I'd say that 3/4's of the office complained it would push them over their agreed overdrafts and thus incur bank charges.

Are we to believe there are people sitting in their living rooms in the freezing cold with water drip-dripping onto their sofas and TVs? Just doesn't seem plausible. I think you'd have to be looking at a few hundred quid minimum as an increase and even then it would take a while to wear people down.

No they've probably stuck it on their overdraft or CC and will worry forget about it later. :rolleyes:

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What sort of idiot puts themselves in the position of having a mortgage loading where the cost of a family meal out would plunge them below the waterline? I genuinely find it hard to believe such people exist. I do absolutely believe there are people to whom 60 quid is a hell of a lot of money and you'd never dream of "spending it all in one shop" (as they say), I was one of them not so long ago, but I don't believe they have massive mortgages. If you are running on that sort of margin and the central heating packs up or a few roof tiles come loose what are you going to do? Are we to believe there are people sitting in their living rooms in the freezing cold with water drip-dripping onto their sofas and TVs? Just doesn't seem plausible. I think you'd have to be looking at a few hundred quid minimum as an increase and even then it would take a while to wear people down.

That is because unlike those cretans that mortgaged themselves to the hilt you have common sense.

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