Debt problems and how to sort them out by sdfsb346f


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									72077 Dept problems 6   11/2/05   4:04 pm   Page 2

       Debt problems                                                            3 If you are responsible, take action
                                                                                Don’t ignore the debt. Get advice from the Council’s Community
       and how to sort them out                                                 Advice Service if your debt is housing related and may mean you can’t
                                                                                stay in your home, or one of the other organisations listed at the end
       This booklet offers advice about what to do and where to get advice if   of this booklet if you have other debts. It will help them if you take
       you’re in debt.                                                          along with you any information you have about your debts, such as
       Remember:                                                                statements, bills, copies of any agreements and details about your
       • don’t ignore your debts, they won’t go away                            income.
       • it’s never too late to take action
                                                                                4 Work out a ‘financial statement’
       • get advice.
                                                                                You need to work out how much money your household has coming
       Steps to take                                                            in and how much you spend each month. Use the financial statement
       When you’re in debt, there are many steps you can take to improve        form on page 7 to help you work this out.
       your situation. Use this seven-step checklist to help you.               Do your budget either weekly or monthly, whichever works best for
                                                                                you – but don’t mix up the two. Don’t forget that a calendar month
       1 List each debt                                                         isn’t exactly four weeks.To get a weekly figure from a monthly one,
       Make a list of how much money is owed, who in your family owes it        you need to multiply the monthly figure by 12 (to get a figure for the
       and who they owe it to.                                                  whole year) then divide it by 52 (the number of weeks in a year).
       2 Check the debt is your responsibility                                  Example:
       Check whose name is on the bill or agreement. If you have any doubts     £180 per calendar month = £41.54 per week
       about whether you are responsible for this debt, get advice.             (£180 x 12 = 2160 / 52 = £41.54)
       You can always get a copy of an agreement from the person or             Or
       organisation – the ‘creditor’ – you owe the money to. For some debts,    £50 per week = £216.67 per calendar month
       if the agreement wasn’t signed, the creditor can’t collect the money     (£50 x 52 = 2600 / 12 = £216.67)
       from you.                                                                You should also check that you’re getting all the benefits you’re entitled
                                                                                to. If you aren’t sure, get advice from the Community Advice Centre or
                                                                                one of the other organisations listed at the back of this booklet.

                                                                                5 Work out how much you can afford to pay
         Please ask us if you would like a copy of this leaflet in              Use your financial statement to work out how much money you have
         large print, Braille or audiotape.We can also arrange to have this     left at the end of each week or month to pay towards your debts.
         leaflet read to you in another language, if you contact us first.      If there isn’t any money left, or you spend more than you bring in, you
                                                                                will need to see if there are ways you could spend less.

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                                                                                      good idea to send a copy of your financial statement with your offer,
         Priority debts                                                               because it shows how you worked out how much you can afford. If
         You have a priority debt, if you’re behind with paying your:                 your offer is reasonable, your creditor would normally be wrong to
          • rent – if you are a housing        • water rates                          refuse it. If you do get a refusal, be persistent.Write again, explaining
            association tenant, contact                                               why you have made this offer. You can ask if they have a ‘code of
                                               • gas and electricity bills
            your housing officer straight                                             practice’ which says how they should collect the debt.
                                               • maintenance or child
            away                                 support                              While you are paying off a debt in instalments, the law says that your
          • mortgage payments or loans                                                creditor is allowed to remind you how much you owe, but they are
                                               • court fines
            secured on your home                                                      not allowed to harass you. If you feel you’re being harassed, you should
                                               • tax and VAT
          • Council Tax                                                               get advice from one of the organisations listed on the back page.You
                                               • National Insurance.                  should also contact the Trading Standards department at Essex County
                                                                                      Council on 01245 341800.
       6 Work out which debts are most important
                                                                                      Important: It’s very important that you only make offers you can
       Some debts are known in law as ‘priority debts’.The priority you give a
                                                                                      keep to, because, providing you pay off your debt in small regular
       debt depends on how serious it will be if you don’t pay. For example, if
                                                                                      amounts, your creditors will take no further action against you – even
       you don’t pay your rent you may be evicted and if you don’t pay your
                                                                                      if it takes years to repay what you owe.
       Council Tax you could be sent to prison.You should always make
       offers to pay priority debts first.                                            Court action
                                                                                      Your non-priority creditors may decide to take you to the County
       7 Make arrangements to pay the debts
       For each of your priority debts, you need to work out how to pay               Court to recover their money.This is not a criminal court and you
       what you owe in instalments.                                                   won’t be fined.

       If you have any money left after paying your priority debts, you should        The County Court will decide how much you can afford to pay each
       spread it between your non-priority debts – for example, your phone            week or month.You should try to give as much information as possible
       bill, credit card bill or money you owe to a catalogue.There is a fair         about your finances.You can send in a copy of your financial statement.
       way of doing this known as ‘pro rata distribution’. Basically, it’s a way of   If the amount they set is too high, you should get advice immediately.
       making sure you make arrangements to pay most to the people you                Advantages to court action
       owe the most money to. But it’s quite complicated to work out, so              If you’re taken to court, it can have some advantages.
       you should get advice from one of the organisations listed at the end          • You won’t pay any more interest on your debt.
       of this booklet.You can also ask your creditors to stop charging you           • Providing you give the Court full information, the amount they tell
       interest, so that everything you pay goes to pay off the debt.                    you to pay will usually be affordable.
       When you’ve worked out how much you can afford to pay to each                  • If you have a County Court judgement against you and you owe less
       creditor, you should write to them to make a repayment offer. It’s a              than £5,000, you may be able to put all your debts together and

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          make one payment to the Court.The Court then shares this out to
          your creditors under an administration order.
                                                                                                                       Financial statement
                                                                                    Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date . . . . . . . . . . . . . . . . . . . . . . . . .
        Disadvantages to court action
        But there are also disadvantages:                                           Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Signed . . . . . . . . . . . . . . . . . . . . . . . .
        • Court costs will be added to your debts.                                   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weekly       Monthly
        • If you miss payments, your creditors can take further action against                                                                   Income
          you – including sending in bailiffs to claim goods from you (see
          below).                                                                   Wages (average take home)                                                State benefits
                                                                                    You                                                                      Income Support
        • A money judgement will be made and you may find it difficult to get
                                                                                    Your partner                                                             Jobseeker’s Allowance
          credit in the future.                                                                                                                              Children’s Tax Credit
                                                                                    Other regular                                                            State pension
        Bailiffs                                                                    income                                                                   Child Benefit
        If you don’t pay the amount set by the Court, your creditor may use a       Child support                                                            Other benefits
        bailiff.They will come to your home and take your belongings to sell to     Maintenance
        pay off your debt.This is called ‘distraint’. Bailiffs can be used for                                                                               TOTAL INCOME
        Council Tax, court fines, maintenance or child support.                                                                              Outgoings
        You don’t need to let the bailiffs in. Don’t sign any papers without        Housing                                                                  Toiletries
        getting advice first.                                                       Mortgage                                                                 Medicines
                                                                                    Endowment policy                                                         Laundry
        Bailiffs can’t force their way into your home unless you have already let   Rent                                                                     Phone
        them in before.They can’t take things that don’t belong to you. Even if     Water charges                                                            Travel costs
        bailiffs are involved, you don’t need to deal with them directly.You can    House insurance                                                          Clothing
        contact your creditor to make any arrangements to pay.                      Life insurance                                                           TV licence

        If you think bailiffs aren’t acting as they should, or they are harassing   Fuel                                                                     Children’s expenses
                                                                                    Electricity                                                              Childcare
        you, get advice immediately from one of the organisations listed at the
                                                                                    Gas                                                                      School meals
        end of this leaflet.                                                        Coal/oil                                                                 Maint./child support
        If the bailiff is collecting money for a County Court or Magistrate’s       Other
        Court, you can apply to the court for more time to pay. Get advice.         Council Tax
        The Social Fund                                                                                                                                       .........................
        If you’re repaying a loan from the Social Fund and the weekly amount        Household items                                                          TOTAL
        is too high, get advice.You can get the weekly amount reduced.                                                                                       OUTGOINGS
                                                                                    TV/video rental

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       Direct payments
       If you’re on Income Support or Jobseeker’s Allowance you can arrange
       to have a set amount paid direct towards some of your priority debts
                                                                                                  Strategic Housing Services
       before your benefit is paid to you.
                                                                                                  Debt Problems
       Anglian Water Trust Fund
       If your water company or sewage system is provided by Anglian Water,
                                                                                                  and how to sort them out
       you can apply for help from their Trust Fund.The Fund can make a
       payment towards your water arrears, and can also make payments
       towards your other debts. Get an application form from one of the
       organisations listed at the end of this leaflet, or direct from the Trust.

       For help and advice
       Housing and related debts
       Chelmsford Borough Council Community Advice Service
       For advice about housing or related debts, call in at Housing
       Reception, on the ground floor of the Civic Centre in Coval Lane,
       Chelmsford. Housing Reception is open from 8.45am to 4.45pm
       (Mondays to Thursdays) and on Fridays from 8.45am to 4.15pm. Or
       phone: 01245 606381 or 01245 606228.

       General debt advice
       Mid Essex Debt Line
       Tel: 01376 512168 (noon-2pm)
       Chelmsford Citizen’s Advice Bureau
       47 Broomfield Road, Chelmsford CM1 1SY
       Tel: 01245 354720 or 01245 257144                                          Community
                                                                                  Legal service
       Monday to Friday, 9.30am-4pm. Saturday, 9.30am till noon.
        Consumer Credit Counselling Service
        0800 138 1111
        Strategic Housing Services
        Chelmsford Borough Council, Civic Centre,
        Coval Lane, Chelmsford CM1 1JE
        Nov 2004                                                                     003

                                                                 Certificate No. FS 80356

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