Dealing with debt leaflet - Spelthorne Borough Council

Useful contacts
Spelthorne Citizen Advice Bureau:
Staines - 01784 444220 / Sunbury - 01932 765041
The Citizen Advice Bureau help desk at Staines County Court runs on a Thursday morning and is available for clients facing possession claims from housing association tenancies, private tenancies and mortgages.
Dealing
with debt
Runneymede Citizen Advice Bureau:
Addlestone - 01932 842666 / Egham - 01932 827187
Elmbridge Citizen Advice Bureau:
Walton, Weybridge and Hersham - 01932 221 680
www.citizensadvice.org.uk – follow the lint to Advice Guide
Other useful numbers:
Consumer Credit Counselling Service - 0800 138 1111
Debt Free Direct - 08000 831 433
Jobcentre Plus - 0800 055 6688 National Debtline - 0808 808 4000
Pension Credit Helpline - 0800 991 234
Spelthorne Council Housing Benefit and Council Tax Helpline -
01784 446 374
Tax Credit Hotline - 0845 300 3900
Surrey Law Centre, Jacobs Yard, Woodlands Road, Slyfield Green, Guildford, GU1 1RL. Phone no - 01483 215000
Housing Options, Spelthorne Borough Council, Knowle Green, Staines,
TW18 1XB. Phone no - 01784 446 380 / Fax no - 01784 446 387
Advice for dealing with debt
If you or someone you know would like any information available from
the Housing Options Department in Braille, larger print, by tape, or any
other language, please contact us direct.
Disclaimer
This leaflet is not a statement of the law. Nor does it cover every situation. If you are
in doubt about your legal rights or obligations, you should seek further advice from
the Citizen Advice Bureau or an independent legal advisor. The information in this
leaflet may become out of date. We have made every effort to ensure it is correct
at the time of publication, but the Council cannot accept any responsibility for any
loss you suffer because you acted or decide not to take action as a result of any
statement in this leaflet.
www.spelthorne.gov.uk/housing
It is important to act now; the longer you
leave it, the worse it will get as interest is
likely to continue to accrue on
the outstanding debt.
www.spelthorne.gov.uk/housing
Some helpful hints to manage your debt are:
If you are in debt and finding it difficult to manage, you won’t
be alone. Many people are in debt for a number of reasons.
The important thing to remember is that you must not ignore
these debts as they won’t go away. The longer you leave
them, the worse they will get as interest is likely to continue
to accrue on the outstanding debt.
If you have mortgage or rent arrears, you could loose your
home if you do not keep up with your weekly or monthly
payments. If you loose your home because you have paid
other debts instead of your rent or mortgage or spent your
money on non essential items, the Council may not have a
duty to assist you with long term housing arrangements. Its
duty may only be to provide you with advice and assistance
to find alternative accommodation in the private sector.
• Split your debts into two groups; priority and non priority
debts. Information on how to do this can be found on the
next page (Prioritising your debts).
• Always pay your priority debts first
• Contact your creditors (the people or organisations you
owe money to) and explain the situation. They are more
likely to be helpful if you keep contact with them.
• Check that you are receiving all the benefits and tax credits
you are entitled to.
• Avoid borrowing more money – it may seem like the only
answer but you are just building up new debts.
• Be realistic – when negotiating with someone you owe
money to, only arrange repayments that you can afford to
keep. There is no point agreeing to pay an amount that
you can’t afford to make. Your creditors are less likely to be
reasonable if you keep breaking your promises to pay.
• If you decide to deal with your creditors yourself, keep
a record of all conversations you have with them. Make
sure you write down names and phone numbers of the
people you speak to. It is also a good idea to confirm any
arrangements made over the telephone, in writing.
• Never ignore court papers. Courts are there to help you too,
and will take into consideration any information that you
give them. Most judgements are issued without a hearing
(by default) because the person who owed the money did
not respond.
• Be fair – give accurate information to your creditors
and any organisation dealing with your debts. Don’t
underestimate or exaggerate your living expenses.
Prioritising your debts
The most common non-priority debts include:
Different types of debt can be
recovered in different ways.
It is important to understand
these differences when
prioritising your debts. Never
ignore priority debts; always
pay them first. Once you have
made arrangements to pay your
priority debts, you can then see
what money you have left to pay
off your non priority debts.
• Credit cards
• Personal loans with banks, building societies and finance
companies
• Charge cards
• Catalogues
• Personal debts to your friends or family
• Credit sales agreements
• Trading cheques/vouchers
• Mobile phone bills
• Non-essential hire-purchase agreements
• Loans on a house or car that has been repossessed
priority debts
mortgage
rent
Income Tax, National
Insurance, VAT
Council Tax
TV licence
gas/electricity/water
court fines
hire-purchase agreements
for essential items
maintenance payments via
the courts or CSA
possible action
repossession
eviction
seizure of goods/bankruptcy/
imprisonment
seizure of goods/
bankruptcy/imprisonment/
attachment of earnings order
(taking money from your
wages)
fine/seizure of goods/
imprisonment
disconnection of supply
seizure of goods/
imprisonment
repossession of goods
seizure of goods/money/
money/ imprisonment/
attachment of earnings.
To work out your budget you need to:
• work out how much money is coming into your household
(income)
• work out how much money it going out (expenditure)
• see how much money you have left (balance)
• work out affordable offers to your creditors
• plan your future spending
Use the form attached to work out your weekly or monthly
income and expenditure. This will help you to work out how
much you can pay towards your debts. Your creditors will
need this information when you negotiate a repayment plan
with them. If a debt advice organisation is helping you with
your debts, they will also find this information useful.
If you find that your expenditure is more than your income,
check whether you are entitled to any extra benefits. Ask at
your local Job Centre Plus or local Housing Benefit Office, or
contact the Tax Credits hotline or Pension Credit Helpline, as
appropriate. You will find a list of contacts on the last page of
this leaflet.
Consider ways to increase your income, for example
by renting out a room, working extra hours or taking
a second job.
In addition consider whether you could raise any money
through the sale of assets or by selling any possessions that
you no longer need (e.g. through a car-boot sale, garage sale
or on an internet auction site).
Make sure you are spreading
the cost of your household
bills so you don’t have to
pay them all at once.
Try to cut down on any expenditure
but don’t go without basic food,
gas or electricity.
Don’t worry if offers you make to
your creditors look very small.
Creditors would prefer you to offer
a small amount you can pay, rather
that a larger amount that you can’t.
Get help making pro rata offers
to your creditors by contacting
an independent debt advice service
or your local Citizens Advice Bureau.
They can give you debt advice and
possibly contact your creditors to
help you negotiate a repayment plan.
They could also give you options
you may not have thought of.
Example household
Step 1
Your household
Income (weekly
or monthly)
Step 1
wages or salary
1300
wages or salary
wages or salary (partner)
435
wages or salary (partner)
Jobseeker’s allowance
0
Jobseeker’s allowance
Income Support or Pension Credit
0
Income Support or Pension Credit
Tax Credit
46
Tax Credit
Retirement or works pension
0
Retirement or works pension
Child Benefit
78
Child Benefit
Incapacity Benefit
0
Incapacity Benefit
maintenance
0
maintenance
non-dependants’ contribution
87
non-dependants’ contribution
other
0
Total income Box A £
1946
other
Total income Box A £
Step 2
Outgoings
(weekly or
monthly)
Step 2
mortgage
0
mortgage
mortgage endowment policy
0
mortgage endowment policy
second mortgage
0
second mortgage
rent
500
rent
Council Tax
75
Council Tax
water rates
25
water rates
ground rent or service charge
0
ground rent or service charge
buildings and contents insurance
22
buildings and contents insurance
life insurance and pension
45
life insurance and pension
gas
57
gas
electricity
40
electricity
other fuel
0
other fuel
house keeping
510
house keeping
TV rental and licence
36
TV rental and licence
magistrates’ court fines
0
magistrates’ court fines
maintenance payments
0
maintenance payments
hire purchase vehicle
240
hire purchase vehicle
travelling expenses
100
travelling expenses
school meals and meals at work
32
school meals and meals at work
clothing
65
clothing
laundry
22
laundry
phone and mobile phone
40
phone and mobile phone
prescriptions and health costs
15
prescriptions and health costs
childminding
0
childminding
other 1- emergencies or repairs
20
other 1-
other 2- birthdays and Christmas
12
other 2-
other 3-
0
other 3-
Total outgoings Box B £
1856
Step 3
Total income Box A £
money for creditors Box C £
Outgoings
(weekly or
monthly)
Total outgoings Box B £
Step 3
1946
Total income Box A £
takeaway
Total outgoings Box B £
Income (weekly
or monthly)
1846
90
takeaway
Total outgoings Box B £
money for creditors Box C £
At some point, you may be advised to:
• Arrange a Debt Management Plan with a Debt Management
Company
• Arrange an Administration Order or
• Enter into an Individual Voluntary Arrangement with your
creditors
Any of these arrangement could be right for you, in certain
circumstances, but you should get independent advice
before making them.
In extreme circumstances you could consider voluntary
bankruptcy, but again you should consider all the pros and
cons very carefully and get independent advice beforehand.