ASK THE EXPERTS: Get free advice for your debt problem


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THIS week's experts are MEL KENNY, a chartered financial planner with Radcliffe & Newlands in the City; CHRIS HOLLOWAY, an independent financial adviser with Dennehy Weller & Co in Chislehurst, Kent; and GRAEME TRUDGILL, technical executive with the British Insurance Brokers' Association in London. If you have a personal finance query, write to: Ask the Experts, Room 445, Northcliffe House, 2 Derry Street, London W8 5TS. Please do not send original documents. Sorry, no personal replies.

W.O.writes: We're struggling to stay on top of our mortgage and other loans after my overtime at work dried up. I have been talking to a debt agency about a voluntary arrangement that seems to give us a way of cutting repayments. Is it a sensible move?

M.K.replies: You will need to speak with your mortgage lender about ways to reduce your mortgage payments as it is a debt secured on your home.

We can't help with your debts but we can help you keep ahead of your creditors

An Individual Voluntary Arrangement (IVA) will deal only with unsecured debts such as personal loans and credit cards.

Your first port of call for advice should be the Consumer Credit Counselling Service or Citizens Advice, which are both charities.

Their priority will be your welfare and your range of options, as opposed to debt management firms looking to profit from the fees on their pre-packaged 'solutions'.

By signing up to an IVA you may still be forced to release equity from your property and the agreement will remain on your credit file for six years from the start of the typical five-year repayment plan.

I NEED SECURITY

B. L. writes: I have inherited just over £100,000 and I want to be sure that this is invested securely. How can I find out which bank belongs to who so that I do not end up with any of the money at risk?

C.H.replies: Currently the Financial Services Compensation Scheme will protect deposits of up to £50,000 a person-for each authorised institution. If deposits are jointly held, the protection limit rises to £100,000 in total.

The limit will rise to £85,000 per person per institution from next month. This limit should be in place until at least 2016.

Each authorised institution may trade under more than one banking brand. You will find details on the Financial Services Authority website at fsa.gov.uk by searching for 'banking groups'.

 

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You might also consider National Savings products, backed by the Treasury, where all of your capital is 100 per cent secure.

PROTECTING A £5,000 RING

S.H.writes: I have spent almost £5,000 on an engagement ring. How do I make sure it is fully insured and do we have to take any special precautions if we are travelling or on holiday?

G.T.replies: You will need to add this ring specifically to your home insurance policy as the value is likely to exceed the single article limit.

You must also make sure it is under the personal possessions section for it to be covered when your fiancee leaves the home.

As far as precautions go, we strongly advise that your fiancee does not take it off her finger.

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