After the fourth programme in the series Lawrence Gold and IFA Michael Brill answered your questions during a live chat.
You can read the full transcript here but don't forget you can check out our Expert Advice section or read the transcripts from our first and second live chats.
Host: Hello, and welcome to tonight’s Live Ask Chat with Lawrence Gold and Michael Brill.
Leesa: Is £12,000 worth of debt too little to go bankrupt if I have no house/possessions etc? Would it be quicker to get to being debt free this way?
Lawrence: I think it's too little.
Michael: I agree, but it can depend on the circumstances. Bankruptcy really should be the last option and isn't something you should consider lightly. It will stay on your file for some time and may cause you more problems than you realise.
Chris: We have opened accounts for both my daughters, would I make more interest if I merge both together and what's the best bank account for children?
Lawrence: Not knowing circumstances, best thing is to go to local banks and building societies to get best rates. Remember if children earn over a certain amount per year the parents may be liable for tax. There is a form you can fill out for this. You can get more information from the Financial Services Authority.
s0z0s: What are the implications to my credit file if I receive a Final Default Notice, and how long would it show up on my file?
Michael: A default notice will effect your credit rating and not for better. It will stay on your file for six years.
Mo: If the creditors are not willing to listen and not able to give you time...What should you do ?
Lawrence: Put it in writing first and foremost. Creditors have to respond to a letter so once you have a response then you can take it further. Before any dealings with your creditor you should make sure you compile a full budget of income and expenditure. Send this budget to the bank and they may be able to help you arrange some payments that are manageable.
Michael: Do make sure you keep a copy of all correspondence as well.
Gambit: I was made bankrupt a little over a year ago and will be discharged in 2 months time, how long will the bankruptcy likely follow me around for?
Michael: It will probably follow you for six years. However if you are showing an improved financial situation there are places which may be able to help with your future plans. For example some lenders will still consider mortgage offers to those who have shown some improvement in financial standing after bankruptcy.
Nicky: Can I ask what you think about IVA's?
Lawrence: It depends on the circumstances but for the right person in the right circumstances it can be good.
Michael: But if you don't run it well, the next step is bankruptcy. It is a serious step to take on an IVA.
Credit cards and mortgage lenders are not charities. People should look more seriously on their outgoings, before they take on these debts as the repercussions can be quite serious.
Chimaera: What's the usual career path to become someone with a job like yours?
Lawrence: Don't do it! Actually I got into it by accident, if I'm really honest. I worked in a bank before becoming an IFA.
Michael: Things have certainly changed a lot. We used to do a fact-find on a cigarette packet and then you were qualified! Basically you have to pass a set of exams and then if you want to specialise, for example in mortgages, you have to pass specific mortgage exams as well.
Lawrence: There is also now a specific financial degree which many places run.
Lee: I'm having trouble opening a sole bank account. I have had a joint one but now I need my own and I have had bad credit in the past.
Lawrence: You want a basic bank account, which is actually called a 'Basic Bank Account'. It allows you to have a cheque book and debit card but you can't overdraw. A few of the high street banks offer this but you will have to ask specifically for it.
Stevel: I am 20 years old, living at home, I have nearly £19000's worth of debt, it is a constant downward spiral. I earn just over £15000 a year, and I am completely terrified. What can I do?
Michael: The first thing to do is write to people to whom you owe money and try to come to some arrangement. Get a budget drawn up with all your incomings and outgoings and present that to them. National Debtline offer information packs on how to approach your creditors. If that doesn't work, go to the Citizens' Advice Bureau.
Vix: I have a tiny debt that I didn't realise existed. Like Debra tonight my parents picked up a lot of my debt in my early 20's. It now seems that I can't get credit anywhere. Once I repay this small amount, what are the best steps I can take to ensure that I can get a mortgage in future?
Michael: Realistically you have to try keep out of debt and pay everything on time to start to show you are responsible looking after your money.
Lawrence: One way to improve your credit rating is to get store cards and spend once on them every couple of months and then pay it back in full before you are charged any interest. But you must make sure you can pay back what you spend immediately or it defeats the purpose.
Ad: Is it worth investing £3,500 in an ISA, or going with an online savings account when saving for a house deposit?
Lawrence: You can only pay three thousand into a mini cash ISA but certainly, if you don't want to take any risks, it's the best investment you can have.
DJ Sacci: I am between £9,500 and £10,000 in debt and live with my parents, if I can arrange smaller repayments or an IVA will this affect my parents or sister obtaining credit?
Lawrence: No it won't. Rules changed in November and came into action in April so now someone at your same address, or with the same name will not get effected by your credit rating. If they do get affected, they should appeal.
Riverplace: Do any of the people's attitudes that appear on progamme make you want to 'give up', have you had anyone who doesn't 'see' the amount of trouble they're in ?
Lawrence: I think they're all like that when we start the programme, but by the time we finish, it has usually dawned on them. We did think Debra would be like that and that we may not be able to help her but she did really start to turn around.
The harder it is, the more we want to do it though, we like a challenge. Generally the people who come to me away from the programme come because they know they have the problem and that's why they're there in the first place.
Michael: I will just tell people from now on to watch Lawrence's programme!
Please note: The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
