During a recession, it’s not just the economy that’s depressed. The stress of debt problems can have a significant effect on your health, both mental and physical. Whether you have lost your job or someone close to you has been laid-off; you find that you’re unable to afford life’s little luxuries for yourself or your family; scraping the money together to pay for those mundane, everyday expenses has become an unending source of stress and the constant financial doom and gloom being forecast by the media has started to get the better of you.

Naturally, in such difficult times, you can find yourself feeling pretty fed up. However, without making light of a situation that is unquestionably painful for a lot of people, you need to keep your morale up if you are going to maintain the motivation to tackle the debt problem. Here’s how to stay upbeat in a financial downturn.

1. Come to terms with your financial situation quickly. Accepting the situation that you’re in needn’t mean complacency though. You can’t bury your head in the sand and pretend it’s not happening; neither should you try to hide the problem from those close to you. Keeping a secret like this can be extremely stressful and have a marked impact on your health. Don’t delude yourself into being blindly positive though. It doesn’t work and the pretence will wear you down. The real respite comes from knowing that you’re actually on the case.
2. Don’t beat yourself up about your financial situation. The majority of debt problems are not the result of irresponsible spending but rather a troubled economy, so don’t lay the blame solely at your own feet. Try to turn the stress of the situation to your advantage and use it to fuel your determination to safeguard your financial future. Be confident in your ability; steel yourself for a hard-fought battle to keep providing for your family.
3. The downturn will not last forever. Although it might seem like a long way off, there is light at the end of the tunnel and you just have to stay afloat until then. After all, there was life before the recession and there will be life after the recession. That doesn’t mean that you should lose focus on the present; be prepared to make sacrifices and tough choices now that will get you and those you care about through hard times.
4. Don’t isolate yourself from a potentially supportive community. In a national downturn, the odds are that you’re not the only one who’s been affected. So, band together and help each other out. It can do wonders for morale to talk to people in a similar situation. Getting a caring, sharing community vibe going can also save you money. If you band together, you can share resources; maybe not necessarily in terms of money but do consider helping out with a bit of DIY, childcare or carpooling.
5. Be proactive in actually making your situation better too. Get debt help, bring your budget back under control and start to manage your financial recovery. If you’ve lost your job, don’t wallow, get out there and look for another one. Look at your food budget and cut back on those unhealthy options. Keep fit and active if you find yourself with extra time on your hands. Remember the days when keeping fit didn’t demand a gym membership? Stay sharp, stay healthy and stay positive.

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First of all, shopping around for the bank account, or any other financial product, which offers you the best rates and benefits is a must. Sometimes the best deals are to be found in unlikely places. Supermarkets can offer accounts with competitive rates of interest as well as other benefits that probably aren’t available from your high street bank. The in-store reward points are just one of these additional benefits.

At one popular British supermarket, you have the option of paying into your savings account at the checkout. So, if the discounts in your weekly shop add up to a fiver, you have the option to transfer that fiver right into your savings. OK, it’s not going to change your life right away but little and often is the best way to do it.

If you like that idea, you’ll love this one. A high street bank is making it even easier to add to your savings little and often, by rounding up purchases to the nearest pound whenever you use your debit card. Naturally, this relies on you having both your current account and savings account with the same bank, which means you probably won’t get the most competitive rate on the market.

When it comes to getting your bank to work for you, setting up a ‘sweeping’ facility is a particularly good way to effortlessly add to your savings. The process of sweeping takes any spare funds that are left in your account each month and ‘sweeps’ it into your savings account. The crux of the issue is finding a savings account with as high a rate of interest as possible.

This is all very good for those with the funds to move around but what if you want your bank to help you to earn a bit of extra cash? We’re not just talking about interest on any savings you might have. A cash-back credit card will reward you for settling your outstanding balance at the end of each month. There are a few credit cards on the market that offer this service so shop around for the best deal.

If you’re dubious about signing up for a cash-back credit card, £100 cash in your hand will no-doubt be a more attractive prospect. There are a couple of current accounts on the market that will reward you with £100 when you open an account. Well, in order to qualify for the cash reward, there will be a minimum deposit amount when you open the account. This will vary from bank to bank so, as ever, it will pay to shop around. You can then take this free money and pay it into your savings account.

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1. Do you always go back to the dealer to have your car serviced? Smaller, independent garages will do the work a lot cheaper. It’s always a good idea to choose somewhere on the basis of a referral though. A good, reliable garage that has experience with your car is a great way to beat high dealer servicing costs but they can be hard to find.
2. When you do take your car in for its service, whether to your dealer or to an independent, don’t let them talk you into buying things that you don’t need. New wiper blades, air filters or high-performance, synthetic motor oil are all expensive extras that can, if needed, be bought cheaper elsewhere.
3. When it does come to wiper blades and that kind of thing, buy them and fit them yourself. It’s an easy job, takes no time at all and is the sort of added extra that you’ll often pay through the nose for if you leave it up to the garage to stick them on.
4. Although we’ve warned you about the inflated cost of dealer servicing, beware the false economy of dodgy garages. As we’ve said, the best way to find one is through a recommendation. When you check it out, look for a busy but well-kept garage and a mechanic that is happy to discuss the job and answer your questions. Get an estimate and make sure you sign off on costs before any work goes ahead.
5. If you find yourself replacing tires suspiciously often, or they’re wearing down unevenly, you could just be treating a symptom, rather than the real problem. Chances are you’re wasting money on tyres when you need to getting your tracking fixed, a wheel balancing, alignment or even suspension
6. Putting off problems with your car because you’re trying to save money will often just make for bigger bills later. For example, that squeak from your brakes might just be a source of aggravation right now but rather than just buying new pads, you could do damage to your disks. Of course, there is always the safety concern with your brakes too. Staying on top of thing like that will help to ensure that you’re not wasting money on costs that could be averted.
7. Keeping a record of the repairs that have been carried out on your car can help you monitor problems, like replacing tyres and brake pads too often, helping you to decide if something’s seriously wrong. Keeping the receipts can help you if the repairs go wrong too.
8. When it comes to insurance, liability is not an area you want to cut back. However, if you’ve got an old car that’s not worth very much, comprehensive insurance can effectively be a waste of money. Take the cost of a year’s insurance premium, add the excess that you’d be liable for and take it away from the value of your car. When you see the bottom line, is it worthwhile?
9. In terms of general upkeep of your car, tyres at the wrong pressure can be a huge waste of money. Improperly inflated tyres can cost you more in petrol, wear out more quickly and put you at risk of an accident.
10. Taking your car to the car wash can be a relatively expensive proposition these days. Rather than allow your dirty car to show you up though, why not wash it yourself? Take some pride in your pride and joy and get out there with the sponge and chamois. The brushes at the carwash can be quite abrasive too, so hand washing will keep the paintwork looking its best.

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British Prime Minister David Cameron outlined his plans to solve the country’s debt problem but has emphasised the difficult decisions that are yet to be made with regard to state pensions and benefits. In short, the Great British public are to expect widespread, deep and difficult cuts to public spending.

Cameron has described the task of tackling the UK’s debt problem in no uncertain terms and is obviously looking to instil the severity of the situation. However, he also emphasised that these cuts in public spending would not damage those at greatest risk and in greatest need of support at such a difficult time. That being said, the budget announcement cannot afford to be too divisive with respect to wage bands across the country. This alludes to a very difficult balancing act in curing the country’s financial ill health.

Up to this point, the Conservative-Lib Dem coalition have tabled a budget for the 22^nd of June, in which they are expected to build on the cuts of £6.2billion that have already been announced. Apparently, the state of the country’s finances was even worse than the new Prime Minister had imagined when taking office. In his own words, the UK is in “Debt Crisis” and he laid the blame for this situation squarely at the feet of the Labour government.

Solely in terms of interest payments on the national debt, the UK is set to spending £70billion within five years. For any of us that have been paying an interest only deal on a mortgage or been going on paying the minimum repayment amount to our credit card, the sheer waste of money will be immediately apparent. As we at Debtsolver have always reiterated, dealing with your debt as quickly and efficiently as possible will help to save you money. As ever, the sooner you face up to the problems, the easier they are to solve.

There are then the knock-on effects to consider, like increased interest rates and the general drop in the level of public services on offer, as taxes are diverted to pay the interest on our national debt. Of course, as promised in the Conservative manifesto, NHS spending and international aid will be protected for the cuts. Whether this remains viable in the long-term is yet to be seen.

In the past 5 years, we’ve seen the loss of 100,000 civil service jobs and the union Unison have viewed these public sector spending cuts as specifically targeting those on a lower income, dependent on these public service, like healthcare and financial support. Unison viewed the debt as a problem that was essentially caused by the wealthy banking and financial sectors but was set to be paid for by those that were most vulnerable.

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The now notorious high street bank, Northern Rock, nationalised to safeguard its customers and itself against the crippling effect of the credit crunch, is now offering to buy back bad debt. In a move that it hopes will generate an estimated £700million, Northern Rock intends to buy back the junk debt at a fraction of the original value and begin to chase the payments.

On one hand, it is hoped that this activity will reduce the overall cost to the taxpayer. At present, an estimated £1.6billion of tax payers’ money is ready to be moved into the bank to counterbalance any losses associated with bad mortgage debt. However, after making a loss in the region of £140million during the second half of 2009, things are looking up in 2010, with Northern Rock back in the black for the first quarter. This has been facilitated by an average increase of 10% in house prices and the low rate of interest.

A significant proportion of Northern Rock is performing well, with about £10billion worth of stable mortgages and £20billion worth of deposits but the banks Channel Island operation on Guernsey is going to be closed. This will leave about 6000 customers looking for a new home for savings worth nearly a billion pounds and with just under 3 months to close their accounts.

To be clear, junk debt is essentially a debt that has past the debt collection statute of limitations, which makes it much cheaper to buy. So, for the original owner of the debt, it’s been settled; most often through bankruptcy. Once upon a time though, very few creditors would ever bother to try and collect a junk debt because it wasn’t deemed to be worth the effort or expense. However, in this recession inspired environment of fiscal belt-tightening and penny pinching, the thought that there could actually be money to be made from these old, out of statute debts has sparked a bad credit gold rush.

So, even after you have successfully completed the terms of your debt solution, it‘s still possible that you could be contacted by someone chasing the debt. Remember, the statute of limitations on the debt has expired. You need to talk to a specialist debt advisor who can let you know where you stand. Don’t give any information or sign up to any payment plan until you know exactly what’s expected of you. Talking to a debt advisor can help you to get this straight.

Northern Rock obviously feels there is a significant amount of money to be made from buying back this debt but for the vast majority of people, the situation will already seem resolved and the debts settled.

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If you find yourself in the situation where you are being chased by a debt collection agency, there are some important points to bear in mind – five of them to be exact. Here’s the Debtsolver lowdown on how to tackle those dodgy debt collectors.

1. Make sure you know your rights; debt collectors have to abide by rules and regulations that require them to treat you properly. Any abusive language or threatening behaviour should not be tolerated.  The Office of Fair Trading has issued guidelines for debt collectors on how to deal fairly with individuals who have defaulted on a debt.
2. If you are being pursued by a debt collector, chances are that the debt has past the debt collection statute of limitations. This makes it a cheap debt for the collector to pick up from the original owner of the debt. In which case, they will usually consider the debt to have been settled; most often through bankruptcy. Interest in these so called ‘junk’ debts is growing but remember, the statute of limitations has probably expired so talk to a specialist debt advisor or the OFT.
3. Whenever a collector gets in touch with you, make sure you get as many details from them as possible but do not divulge any of your own until you’ve looked into the debt collection agency and the debt they’re chasing. So, first of all, make sure you get the company’s name, address and a telephone number. Have them send you proof that you actually owe the debt; they should already know your address. If they’ve made a mistake and you’re not the debtor, reply with a certified letter and let them know they’ve got the wrong person.
4. Monitor your credit report to make sure that you’ve not been the victim of identity theft and someone is out there running up bad debt in your name. You can request a copy of your statutory credit report, a one-off credit report you can order by post, online or by phone, for a £2 admin fee. We’d recommend getting into the habit of doing this once a year to make sure your records are up to date. Be sure to dispute any questionable debts or collection attempts, report any suspicion of identity theft to the police and keep records of correspondence with collection agencies.
5. If the situation persists, you feel you are being improperly treated by the collection agency or they’ve got the wrong person, get help. The Office of Fair Trading will investigate the conduct of collection agencies and debt specialists will help you to solve the debt problem.

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The summer holidays are just around the corner and as much as we look forward to those few, fleeting days of home-grown British sunshine, it’s more likely that we’re considering the possibility of jetting off to warmer climes. Well, in the wake of recession, ongoing financial woes and unemployment, you’d be forgiven for thinking that we’re all tightening our belts and looking closer to home for our summer holiday.

We’re not though. The results of a recent poll conducted by the travel specialists at Lonely Planet seem to suggest that British holidaymakers will readily forego their frugal ways when it comes to funding their summer sojourn.  Although a lot of the blame for the recession can be attributed to a general ‘buy now, pay later’ attitude to our finances, the media coverage that was devoted to the credit crunch has instilled a strong sense of credit caution. When it comes to holidays, it seems we’re ready to take a break a break from responsible spending.

About a quarter of Brits said that they would sell some of their possessions in order to fund a holiday; roughly one in ten would actually go to the length of taking out a loan or extending their overdraft to afford it. Perhaps even more telling, the survey suggested that 35% of Brits travelling abroad will be quite comfortable with putting it on their credit card and a measly 1% would let not being able to afford it put them off.

The other side of the argument is of course, that almost two thirds of those asked would not take on extra debt to pay for their holiday. Rather than buy now and pay later, they held true to the far more sensible practice of actually saving up for something before buying it. Naturally, some of those would have been willing to use a proportion of their savings on a holiday but that’s at least their money. The potential problems that they face are inherently less risky than those faced by holidaymakers who go into the red to get away.

We recommend that you have a contingency plan for any unexpected change in your financial circumstances. If you use a credit card to pay for your holiday, there’s a strong chance that it’s going to cost you more in the long run. There is also the ever present risk of unemployment in this volatile financial environment. Returning from your holiday to find that you have lost your job will make it extremely difficult to meet these repayments. So, start your summer holiday preparations far in advance by saving up for it.

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You’d be forgiven for thinking that, with all of those big money movies, record sales, royalty cheques and sponsorships, celebrities are a relatively safe bunch to lend a few quid to. After all, they can afford it, right? Well, they’re not usually renowned for astute money management. As this list from Debtsolver shows, celebrity spending and debt often go hand in hand.

1. The music business is notoriously fickle but two successful albums and a Grammy would be sure to lull you into a false sense of security. Sadly though, for Toni Braxton this success just couldn’t provide her with the lifestyle to which she aspired and in 1998 she filed for bankruptcy, owing $5million.
2. Staying with musical superstars, remember MC Hammer? Well, although his spending habits are now the stuff of legend, he was able to keep up with it for a while. All good things must come to an end though, the shelf life of Hammertime being one of them. He filed for bankruptcy in 1996, having spent about $20million.
3. Kim Bassinger bought Braselton, a town in Georgia (the US state, not the ex-Soviet country), for a reported $20million. She then signed up to do a film called Boxing Helena, decided against it and dropped out. The film’s producers took her to court for breach of contract. Kim lost and had to sell Braselton and file for bankruptcy.
4. Mike Tyson apparently earned $300million in his fighting career. However, he was bankrupted by $27million worth of debt; $13million of which was due to the US Government in unpaid taxes.
5. Burt Reynolds starred in almost 150 films. However, in spite of this extensive list of credits, Burt managed to build up about $10million worth of outstanding debt and only managed to hold on to his house through some expert legal wrangling and dedicated debt management.
6. Don Johnson’s days on Miami Vice made him one of the most famous small screen actors in the world. However, his life of excess lead him into serious debt problems that even cost him the iconic silver Ferrari Testarossa, a personal gift from Enzo Ferrari, that became such a signature of the programme. He managed to repay over $14million but I’d still think twice before lending him a tenner.
7. Marvin Gaye is about as big a legend as you get. Sadly though, succumbing to well documented personal problems, Marvin’s mounting tax debt lead to bankruptcy in 1979. He returned to form in 1982 with the release of “Sexual Healing” but sadly died in 1984.
8. Cyndi Lauper reminded us all that girls just want to have fun, but at what cost? Critical acclaim came early for Cyndi but this early success never really translated into record sales and in 1980, she filed for bankruptcy. Her career was luckily resurrected and her recovery from bankruptcy remains an inspiration to celebs everywhere.
9. Willie Nelson’s been around for a while. Sadly though, he’s almost as renowned for his massive unpaid tax bill as his inspirational activist anthems. Willie was apparently not great at keeping on top of his finances and was reportedly taken advantage of by his accountant, owing somewhere in the region of $17million in unpaid tax.
10. Meat Loaf hit the late 70’s music scene with a hugely successful album and looked set to be a major player for years to come.  Within a decade though, a pretty major debt beef had got the better of Meat and in 1986 he filed for bankruptcy, owing $1.6million.

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Looking to get into debt fast? Finding there isn’t quite enough pressure on your finances? Keen to get some more stress into your life? Probably not. Why then, do so many of us continue to make the same spending mistakes that are sure-fire ways to bring about a bad debt problem? Luckily, Debtsolver are on hand to flag up these top five steps towards bad debt. So, if you recognise your spending habits in there, you too could be headed for debt.

1. Do you spend more than you earn? This is the most straight forward route into debt and the one taken by most people. Although it might sound like an exercise in irresponsibility, this can be a relatively easy habit to fall into, particularly if your financial circumstances change. If your ability to work is limited, you are forced to cut down on the number of hours you work or are made redundant, your outgoings will not necessarily be able to immediately adapt to this change in circumstances.

2. Leading on from point 1, if you’ve been spending more than you earn, you’ve essentially been spending money that you don’t have. You are able to spend money you don’t have by using your credit cards, store cards and taking out loans. Falling into the habit of using these means to meet other credit repayments is a downward spiral to a severe debt problem. Even for those who are confident that a buy now, pay later approach is well within their means, a change of financial circumstances can soon land you in debt difficulty.

3. If you find that you’re getting into the habit of using credit to make your usual, day to day purchases, the interest applied can mean you’re paying over the odds for your goods. You should definitely try to stick to cash for these things. Obviously, using your credit cards is all about paying later for the things that you want now. However, it’s much harder to stay motivated and committed to a repayment plan when you’ve already consumed or used the ordinary, boring things that you’ve bought. It’s too easy to then just pay the minimum on your credit card, rather than pay it off each month. Then the purchases will definitely end up costing you more.

4. Similarly, if using your credit card still gives you the sense of getting something for nothing, you’re edging ever closer to a serious debt problem. What makes you think that you’ll all of a sudden want to pay for something more once it’s no longer so new and the shine’s gone off it? Using your credit card to make purchases when you actually have the cash is a mistake and if you want to avoid debt.

5. Taking on more credit to pay off your existing debt is the last in our list of steps towards a really serious debt problem. The first thing wrong with that concept is the idea that you’re actually paying anything off. All this achieves is shuffling debt around. Chances are that you’ll be picking up more debt as this goes on and your financial situation will be getting harder to solve. Free balance transfers can be a good idea for those that can afford to pay off the outstanding balance before any 0% period ends. It’s important to remember that the debt consolidation loan, although another form of credit, is not in the same category. It is debt solutions which helps a lot of people deal with their mounting debt problem and regain control of their finances.

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If your idea of using the internet to save you money means socialising in a chat-room rather than in the pub, or the occasional search for vouchers, you’ll be surprised to hear just how much money-saving potential there is in cyberspace. Not only that, if used to its full potential, the internet can be just as good at making you money as it is at saving you money. Of course, there is no denying that the internet is particularly good at encouraging you to spend money too. So, with the help of the debt specialists at Debtsolver, you can take control of your online spending and begin getting the best return on your digital spend.

Firstly, there is no shortage of companies willing to offer incentives like vouchers and reductions for your participation in online surveys. Don’t buy things that you don’t need because they seem like a good deal though. Unnecessary spending is still just as unnecessary when you’re getting a deal. However, if it’s a product that you’d buy anyway, saving a few pounds here and there can soon add up.

Here are five survey sites that give you a financial reward for participation.

• Test and Vote – Test products and be awarded points that can be redeemed for vouchers.
• Synovate – Complete surveys for entry into prize draws and points redeemable for cash.
• Lightspeed UK – Various surveys that are rewarded with points and prize draw entries.
• The Great UK Survey – A 5 minute survey is rewarded with a £5000 competition entry.
• Valued Opinions – Build up real cash for your opinions, redeemable when you reach £10.

If you’ve got the time to scour the internet for potential bargains and take part in surveys that promise vouchers and rewards for participation, it’s easy to forget that the web offers far more tangible money making opportunities. Although being a serious savings hunter can seem like a full-time job, it isn’t. When it comes to real-life, actual job seeking, the net can be a valuable resource.

The major source of debt problems is not irresponsible spending but an unforeseen change in financial circumstances. Typically, this is losing your job. So, getting debt help, getting back on the job market and bargain hunting should be the first steps towards beating the debt burden for anyone out of employment.

Maintaining this focus on the digital world as a source of revenue, don’t forget to incorporate it into your real-life money making plans. If you’re looking around at all of those things you don’t really need and thinking about biting the bullet and doing a car boot sale, consider eBay and Amazon Marketplace too. They’re great places to offload your unwanted books, videos, CDs and lots of other things too.

So, there are lots of ways that the internet can help you to save money, or even make a bit more money, in order to lessen your debt burden. The first one though, should be to get specialist debt help from the advisors at Debtsolver.

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