Tax Credit Torture For Families

TWO damning reports into the tax credit system were published this week, claiming it causes distress and hardship to vulnerable families.

A survey by Citizens Advice found almost half of respondents said they would be less likely to claim credits in future as a result of their experiences. Overpayments which are suddenly demanded back by the Governnment were found to be the main issue.

Another report, by Parliamentary Ombudsman Ann Abraham, detailed how HM Revenue and Customs was accused of "unfair or unreasonable recovery of overpayments".

The credits were introduced by Gordon Brown'in 2003 to boost the income of around 6million families. But the system has been dogged with prob¬lems, with the Government recently admitting it had made more than £6bil¬lion of excess payments in error.

Citizens Advice found a third of respondents had been overpaid by £500 to £1,499 - but more than a quarter had been told they owed more than £2,500 and one in 10 more than £5,000.

Abraham said: "The report shows the distress which can be caused to some of the most vulnerable families when they find themselves with such a debt to repay - often unexpectedly, and some¬times a very long time after the money has been received and spent."

David Harker from Citizens Advice said: ''A significant number of respondents highlighted the devastating impact tax credit problems had had on their family. Some referred to having to sell or remortgage their homes, their families breaking up under the strain, and to severe stress and illness."

Chas Roy-Chowdhury from the Association of Chartered Certified Accountants said: "Your entitlement for tax credits changes if your income goes up or down, or if certain personal cir¬cumstances change. The problem is many people don't know when and what to inform the Revenue about - and it can take a long time for the Revenue to process information when it is recieved.

"This delay can lead to prolonged overpayments which are then suddenly demanded back."
Claimants should inform the Revenue of any change in income or circum¬stance, added Roy-Chowdhury.

Chase Saunders have seen evidence of this over the last few years and the hardship it causes is tremendous and really tips people over the edge.

Right or wrong some people live to their means and will borrow on the strength of the income they get including tax credits, when there is a change in the tax credit they receive their financial situation collapses and mounting debts are the result.

Chase Saunders can help with the debts that have built up. Chase Saunders will find a solution to put all debts together into one affordable monthly or weekly payment, even if those debts in the tens of thousands.

A Chase Saunders Financial Management debt advisor is contactable on FREE PHONE 0800 138 2299 or online at www.chasesaunders.co.uk

IVA Advice | Debt Help| Home Loans| Remortgages| Bridging| Quotes Chase Saunders provide a full range of financial services including IVA Advice and Dept Management, Full Mortgage, Remortage and Home Loan Services including the facilities to offer Bridging Financing.

Price of loans go through the roof

It was reported in the SUNDAY EXPRESS on 14th October 2007 that cash strapped borrowers with poor credit records face paying thousands of pounds extra to secure a mortgage as the credit­crunch takes hold, new figures revealed this week.
A quarter of all specialist and "sub-prime" mortgage applicants - those with a history of missed repayments or credit problems ­who were accepted for a home loan in August would not be accepted today, said broker The Mortgage Lender.
Those who secure a mortgage offer will find it expensive;with some sub-prime deals charging more than 10 per cent annual interest.
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A mortgage taken out in August by a customer with a poor credit histo­ry will now cost a new applicant as much as £200 a month more.

Lenders are tightening 'up on their 'affordability' criteria, which determines how much· they will lend calculated "from disposable income. With the higher interest rates charged even fewer people will get a mortgage.

The amount people can borrow is falling too with many lenders only willing to lend around 75 per cent of the value of the property.

Katie Tucker at broker John Charcol said: "Kensington's 'High And' range is only available to 75 per cent now, down from 85 per cent, and the two-year tracker remortgage rate is 10.5 per cent."

The so-called credit crunch stems from activity in the US, where banks lost
millions of dollars. When homeowners with bad credit records failed to repay
loans .

Lenders fear that risky lending to UK homeowners will lead to the same thing happening here.

Lenders are steering clear of high-risk borrowers. Those that will lend to those with poor credit histories will make them pay for- it. There have been dramatic changes to the rates offered.

Debt experts say that tightening up on how much lenders will offer could save people from bankruptcy.

Mainstream lenders are turning down more mortgage and personal loan applicants, according to new figures.

• Nearly 2 million of those applying, for a loan in the past six months' have been rejected by banks, said website MoneyExpert.com.

Chase Saunders financial management has already noticed that those with the habit of moving mortgages and the new lending restrictions are already starting to cause havoc.

The number of rejected applications has increased and the ability to maintain contractual payments to mortgages and other borrowings has suffered alarmingly.

Chase Saunders are a complete ‘one stop’ for financial matters, mortgage and remortgages, secured loans, debt management and IVA,s for those whose finances need a complete overhaul and would recommend that any body who is genuinely struggling with their finances should speak with a debt advisor who will point them in the right direction. Contact Chase Saunders Financial Management on FREE PHONE 0800 138 2299 or make a quick enquiry at www.chasesaunders.co.uk

IVA Advice Debt Help Home Loans Remortgages Bridging Quotes
Chase Saunders provide a full range of financial services including IVA Advice and Dept Management, Full Mortgage, Remortage and Home Loan Services including the facilities to offer Bridging Financing.