Debt Solution Tips

Having been saddled with a money-sucking waste-to-energy incinerator for years, Bay County finally may be seeing a pinprick of light at the end of a long, dark tunnel.

From its inception two decades ago, the incinerator has burned county taxpayers more than it has dry trash. It has never come close to being self-sufficient and has bounced between being private and public ownership, with costs - and losses - continuing to escalate. The county still owes $35 million on the facility, its debt payments alone consuming more than $10 million of Bay's annual budget.

On top of that, the darn thing keeps catching on fire. A recent blaze shut the facility down for a month while repairs were done. It's like living in Cleveland in the 1970s.

But just as that punch line of a city eventually rebounded, there is a ray of hope for the incinerator. Despite years of county missteps and mismanagement, EnGen LLC, the facility's new operator, has it pointed in the right direction.

The County Commission this week approved a contract with Gulf Power that, if it receives a final OK from the Florida Public Service Commission, would substantially increase the price of energy that the company purchases from the incinerator. The facility currently charges $53 for each megawatt hour of energy that is generated by burning municipal waste, which has produced between $2.5 million and $3 million in revenue. However, Gulf Power has agreed to pay $72.50 per megawatt hour, which could increase the incinerator's take to as much as $5 million annually.

EnGen has promised to earmark $3.2 million a year to pay down the incinerator's debt. At that rate, the facility will be out of the red in 11 years. That doesn't erase years of misguided county policies that inflated incinerator costs, but it at least presents a potential path out of this fiscal wilderness.

One of the keys is to produce more energy that can be sold, which involves needing more trash to burn. Thus, EnGen is hoping to boost the incinerator's capacity from 56,000 megawatts of electricity each year to 66,000. The more refuse it burns, the more juice it can produce to sell and the more money it can rake in - and the sooner the county can remove the albatross that has been wrapped around the taxpayers' necks.

The trick has always been finding enough waste to dump into the facility's maw. To that end, earlier this year EnGen persuaded the county to spend $1.2 million to be used for a metal-recovery system. The company estimates that the garbage system produces about 500 tons of metal each year that sits in landfills, when it could be used by the incinerator to produce electricity.
Of course, garbage isn't the only thing that's being recycled. Gulf Power has requested an 11.3-percent rate hike, which if approved by the PSC means that some of the money that Bay County customers will be paying in higher energy bills will be used by Gulf Power to buy electricity from the county incinerator. Talk about a closed circuit.

Setting It Straight: Thursday's editorial "Burning solution" erroneously reported the annual debt payments on the Bay County incinerator. The debt payment is $3.2 million a year.

The website, www.newtomorrowbrokerservice.com will allow advisers to refer clients to the company’s broker services team of debt solutions experts, who can offer independent and free debt advice.

The service is designed to offer intermediaries an alternative for indebted clients who might otherwise be refused further credit or a remortgage.

Ian Wright, director of newtomorrow.com, says: “If intermediaries have exhausted all of their own options, we are able to use our experience in debt solutions to offer their client a way out of debt.”

After the intermediary has logged on to the new site and completed an online fact find, Newtomorrow Broker Services will run a solution which could include a personal debt management plan, where debtors make monthly repayments to creditors, or more formal agreements such as IVAs or protected trust deeds.

“Current market conditions are making things more difficult for everyone, intermediaries will be feeling the impact of tighter lending criteria as fewer people will be granted credit,” says Wright.

As consumers feel the pressure of rising costs and may not be able to obtain credit which was once readily available, there will be a knock-on effect for intermediaries. Their income streams are being reduced as they are unable to source suitable refinancing solutions, he says.

”The new online portal is designed to help intermediaries offer a real alternative to indebted clients. Our whole ethos revolves around finding the right solution for each individual client, ensuring access to the solution is convenient and the arrangements are sustainable.”

Newtomorrow is part of the Invocas group.

In the midst of the credit crunch, thinkmoney.com reminds existing and potential customers that secured consolidation loans are still a viable debt solution for many homeowners - and that a range of alternative debt solutions are available to borrowers who either can't secure a loan against their property or prefer not to.

"There's no question that obtaining secured credit has become harder and, in many cases, more expensive," a spokesperson for the financial solutions company commented. "As a second charge on a home, a secured loan involves a certain risk from a lender's perspective, so secured lenders are keeping a very close eye on issues in the housing market. A recent Bank of England survey revealed that default rates on secured lending rose by more than expected in Q2, and lenders expect these rates to rise further in the months ahead.

From the individual borrower's perspective, equity withdrawal of any kind is clearly a more attractive option when house prices are rising: "Today's falling prices are reducing the number of homeowners with enough equity to make a secured loan a viable solution - and deterring many who are keen to retain their 'safety margin' against negative equity.

"Having said that, it's important to see recent falls in house prices in their correct context: as relatively small drops following a decade of rapid growth. According to Nationwide's House Price Index, for example, the 'average house' in Q2 2008 was still worth almost 10,000 more than it was in Q2 2006. In just ten years, Nationwide reports, the average house price rose from 60,754 to 184,131 - homeowners may be worried about falling prices, but many are still likely to own significant levels of equity. For them, a secured loan can be an excellent debt solution: a realistic way to consolidate their unsecured debts into one manageable, lower-interest debt which they can arrange to repay at an affordable rate.

"Nonetheless, when major secured loans providers like Firstplus announce they're ceasing to make new loans, it's clear that the secured loans market as a whole is suffering under today's adverse conditions. With lenders tightening their criteria or even turning down new business, it's more important than ever that borrowers choose a company that works with a wide range of lenders and specialises in finding secured loans for people from all kinds of financial backgrounds. Talking to the right company can make all the difference between being offered credit at a competitive rate and being unable to avail a secured loan at all."

Concluding, the thinkmoney.com spokesperson stressed that secured consolidation loans are by no mean the only way out of debt. "Depending on the individual's circumstances, a number of other debt solutions may be more appropriate than a secured loan, such as a debt management plan, an unsecured consolidation loan, an IVA (Individual Voluntary Arrangement) or, for residents of Scotland, a Trust Deed. For anyone in debt, the important thing is to seek impartial debt advice from a company that offers a wide range of debt solutions - a company that has an in-depth understanding of each solution's benefits and drawbacks and can recommend the one that constitutes their optimal route out of debt."

Secured Loans
Find the best deal on secured loans with Accepted.co.uk.
www.accepted.co.uk

People who are struggling with high levels of personal debt have a range of solutions available to alleviate the burden, however they must consult with a professional in order to ensure they choose the right one, an industry figure has said.

A spokesperson for thinkmoney.com claims the credit crunch has reduced the availability of secured consolidation loans and made them more expensive, however there are many different options for consumers to take advantage of in order to ease their financial worries.

The representative stated those homeowners with equity in their properties could turn to a secured loan as a way of consolidating their unsecured debts into one manageable debt but those who do not still have several options available.

"Depending on the individual's circumstances, a number of other debt solutions may be more appropriate than a secured loan, such as a debt management plan, an unsecured consolidation loan, an IVA (individual voluntary agreement) or, for residents of Scotland, a trust deed," the spokesperson said.

Those considering a debt solution should seek professional advice before deciding which direction to take, the representative added.

Moneyfacts.co.uk recently reported seven lenders have withdrawn from the secured loans market since last summer, including Capital One Bank, LoanOne Intermediaries and Breeze Loans.

Debt Management Compare debt management plans using our calculator - Search online now! www.trapped.co.uk

Law company Stephenson Solicitors has launched an advice website aimed at those who face the threat of having their homes repossessed, with the possibility of having the debt eliminated.

The website, www.debtandrepossession.co.uk, will offer consumers advice about how best to deal with their financial difficulties as well as offering information about the various options available to them, Crain's Manchester Business reports.

In addition to providing details and advice, consumers are also offered a free, 30-minute session in which a qualified professional will assess the deals they are tied to and explore possible avenues which allow them to be challenged.

Many credit agreements have areas in which the debt can be disputed according to Andrew Leakey, a partner at the firm.

"A large percentage of (credit agreements) have discrepancies in them which ultimately means, in a lot of cases, the debt can actually be wiped out," he told the website.

In other news, new research from financial comparison site gocompare.com has found the main priority for the majority of people in Britain is to reduce their levels of personal debt and monthly outgoings.