What is most wonderful about Denial, in terms of consumer debt, is bad name that banks are getting for seducing innocent consumers into complex credit contracts. If fat McDonalds’ customers have to take responsibility for their actions, then poor borrowers should acknowledge full consequences of excessive shopping.

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Resources: http://cashzilla.blogspot.com/ http://www.creditaction.org.uk/ http://www.savekaryn.com/ http://www.moneynet.co.uk/ http://www.moneysupermarket.com/ http://www.lowermybills.com/ http://www.power-of-attorneys.com/july_se1.htm

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Further information:

‘What £1.1 trillion of debt actually means’, by Cashzilla

Consumers have already been given comparisons of debt and third world countries’ GDP. At Cashzilla, we don’t think message is setting in. We asked Jamie, a local expert, to do a small scientific experiment, which involved going to shop and buying a tube of smarties. The tube of smarties cost 40p and there were 42 smarties in tube (a very significant number). Some magical calculations later, Jamie worked out that £1.1 trillion would amount to coating world in smarties five million times over!

Rachel is one of two authors who write for Cashzilla. We don't take ourselves too seriously and rant about various personal finance issues from time to time.

Rachel drinks Guinness.

Cashzilla is an Aries. He has a flamboyant character and a tongue that could heat up any conversation. If Cashzilla was an A-Team character, he'd be Murdock.

This doesn’t mean that everyone with an adjustable mortgage is in trouble right away. Some indexes are more volatile than others. COFI moves much slower than other adjustable rate indexes, while LIBOR fluctuates with more volatility. But remember, when an ARM adjusts, new interest rate is a sum of borrower’s fixed margin plus current rate of index mortgage is tied to.

Consumers who foresee paying an interest rate that is significantly higher may want to consider refinancing to take advantage of stability of a fixed rate mortgage.

This is also a good time for borrowers who started out in an adjustable rate loan due to a poor credit score to transition into a fixed rate loan if they can. Once a track record of making mortgage payments on time and in full has been established, this should have a positive effect on credit score and there’s a good chance borrower may now qualify for a loan with a lower interest rate.

As with any decision to refinance, it is important to take terms of existing loan, cost of new loan, and borrower’s long-term needs into consideration. A qualified mortgage professional should help weigh out options by providing a clear assessment of available loan programs for consumer.