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					  Self help
money advice
    pack
A useful self-help guide to
         help you:


 Work out your household budget
 Decide which debts to pay first
 Negotiate offers you can afford
 Deal with court action
Money Advice pack
Introduction

Many of us will experience difficulties with balancing our
money at some time in our lives




Struggling with finances and debt can often be an
isolating experience - we rarely discuss our personal
finances openly

This guide provides general advice about how to tackle
your debts and organise your finances




For specific problems we recommend that you contact a
specialist debt advisory service, such as your local Citizens
Advice Bureau. A list of contacts can be found at the back
of this pack

Do not ignore the problem! – it won’t go away, and
the longer you leave it the worse it may get.


Contact the Income Team for further advice about rent,
money or any of the issues mentioned in this pack.

Call 0800 917 0839 and ask for your Income Officer or
email income@SBHG.co.uk
Priority debts
Some debts are more important than others!

The law gives different creditors various ways of getting
their money back. This makes some debts more important
than others.

Your rent is a priority debt, because if you do not keep up
payment, you may be evicted, and lose your home.

The table below shows different types of priority debts,
and the actions that may be taken against you if you do
not pay these debts.

Debt                                       Action that may be taken
Rent/Service charge arrears                Repossession of your home/Eviction
Council Tax arrears                        Bailiffs/Imprisonment*
Magistrates fines                          Bailiffs/Imprisonment
Child Support/Maintenance                  Bailiffs/Imprisonment
Tax                                        Bailiffs/Imprisonment
Water rates                                Supply cut off
Gas/Electricity                            Supply cut off
Telephone                                  Disconnection
Hire purchase                              Repossession of goods

* This debt will still be payable, even after a term of imprisonment is served.

Your personal budget

It is important to take the time to work out your personal
budget.
   • Set aside some time when you know you won’t be
       disturbed
   • Collect details of your debts and other bills
   • Collect details of your living expenses
   • Get a pen and some paper
Use the income and expenditure sheets included in
this pack


Income - Money you have coming in

When working out your income, do not include any
income that is not guaranteed – such as overtime or
bonuses.
Do not include any Disability Living Allowance or
Attendance Allowance you may receive as part of your
income calculation. These payments are for specific
needs, and do not have to be counted as income.

Fill in weekly or monthly figures, whatever is best suited
to you. Do not mix up the two.

When working out your income include:
 • Wages (Take home figure)
 • Any Benefits you get
 • Any regular payments you get in (such as money
   from lodgers, or “keep” from grown up children)


See if you can increase your income by:
  • Checking your tax – make sure you don’t pay too
    much
  • Checking whether you are entitled to any benefits
  • Ask family members living with you to contribute if
    they are working
Expenditure - Money going out

Work out how much money you are paying out each week
or each month. Once you have decided whether you will
work it out weekly or monthly, do not mix up the two.

Do not include any credit payments or debts.

Rent – check if you are entitled to any Housing Benefit.
Council Tax – Check whether you are entitled to any Council Tax
Benefit, or any discounts. Remember people who live alone are
immediately entitled to a Single Person Discount. Ask to pay over
12 months rather than 10, or request weekly or fortnightly
payments – whatever helps you manage your money better.
Mortgage – You are usually required to pay any mortgage
payments monthly. To get the weekly figure multiply by 12, then
divide the result by 52.
Water charges – Ask if you can pay weekly or monthly
Gas and Electricity – Many companies have discounts for Direct
Debit payers, and you can arrange to pay your Direct Debit
monthly. Work out your annual charge and divide this by 12.
Where possible, avoid key meters, as the rates charged may be
higher than paying by Direct Debit.
Satellite TV – Include the cost of this as expenditure. Be
prepared as some creditors will ask you to cancel this.
TV Licence – Consider buying stamps weekly or monthly to
spread payments. Pay by Direct Debit over 12 months. Call the TV
Licensing customer services helpline on 0300 790 6071.
Clothing – Look at the amount you pay out on clothing over the
year. Remember to include school uniform. Only include non-
dependants if you pay for their clothing. As a rough guide, allow
£20 per person per month.
School meals – Check to see if you are entitled to free school
meals. Students who receive Child Tax Credit, and many
unemployed people with children are entitled to Free School Meals.
Housekeeping – This should include food, toiletries, cleaning
materials and kitchen/bathroom equipment. You may not be aware
of how much you spend – as a rough guide, allow £60 per person
per week.
Travel – This should include travel to school, work or shopping.
Other – This should include all other regular expenditure that
cannot be accounted for above. This includes things like:
Cigarettes, birthdays, Christmas, newspapers, pocket money,
children’s clubs, entertainment and the lottery.


Money left over for debts
To find out how much money you will be able to pay
towards your rent/service charge arrears, and other
priority debts, take away your total expenses from your
total income.

If your expenses are more than your income:
   • See if you can cut down on any of your expenses –
     but, don’t cut down on basics like food, gas and
     electricity. You must try to ensure that your
     outgoings are reduced, or your debts will continue to
     grow.
   • Check whether you may be entitled to any benefits,
     or whether you can increase your income some other
     way.

If your income is more than your expenses this is called
disposable income. This means that you have some
money left to pay debts. Make sure you start paying off
your priority debts first. (see page 3 of this pack)
Personal Budget Planner


Name: …………………………………………………………..
Address: ..………………………………………………………
……………………………………………………………………..
Postcode: ………………………………………………………
Telephone numbers: ………………………………………
National Insurance number: ……………………………
Date of Birth: …………………………………………………
Occupation: ..…………………………………………………
Hours worked………………………………………………….




Money coming in:                    £ Weekly   £ Monthly
Wages (Exclude overtime/bonuses –
unless guaranteed)
Partner’s wages
Working Tax credits
Maintenance
Student loan
Income from Lodger/Family members
State Pension
Private Pension
Income Support or Job seeker’s
Allowance
Pension Credit
Child Benefit
Child Tax Credits
Incapacity Benefit or ESA
Carer’s Allowance
Other
Total income £
Expenditure - Money going out
                                         £ Weekly   £ Monthly

Home
Rent/ Rent Arrears
Mortgage/Mortgage arrears
Council Tax/Council Tax arrears
Insurance
Gas
Electricity
Water
TV Licence
Telephone/Mobile
Other (any other outgoings relating to
Your home)
Sub total
Food/Clothes
Food/Groceries
Cleaning materials
School meals
Clothes/Shoes – self
Clothes/Shoes – partner
Clothes/Shoes – Children
Other (any other outgoings
Sub total
Travel/Leisure
Travel – public transport
Travel – Car
Sports
Cinema/Theatre/Video Hire
Satellite TV
Pubs/Concerts/Outings
Other
Sub total
Total Expenditure £
Example budget
Name:    Mr Joe and Mrs Jane Smith
Address: 1 Any Street, Any town, Anywhere W1 234

Monthly income: (you can work yours out weekly –
just be sure to stick to either weekly or monthly)

Wages:
Joe                               £900
Jane                              £350

Total income:                     £1250

Monthly Expenditure:
Rent:                             £450
Council Tax:                      £110
Gas:                              £40
Electricity:                      £30
Water:                            £22
TV Licence:                       £13
Telephone:                        £20
Housekeeping:                     £200
Car (tax/insurance/Petrol):       £150
Clothes                           £40
Prescriptions:                    £18

Total expenditure:                £1093

Total left over for creditors = £157 per month.

This means that Mr and Mrs Smith have £157 per month
Disposable Income – which they can use to clear any
debts that have built up.
Money for debts
Once you have used the budget planner to calculate your
weekly or monthly income you should have a good idea of
how much money you have left over to pay to people you
owe money to.

Use the table below to assist you:

Total Income          Weekly £            Monthly £



Total Expenditure     Weekly £            Monthly £



Total income – (minus) total Expenditure =

£££…


Where you have more Income than Expenditure – this
leaves an amount of money for debts.

This money can be used to make arrangements to settle
priority debts first, and then help you clear all other debts
you may have.

Sample letters to people you owe money to

Once you know how much money is left over for creditors,
you can use the sample letters attached to make offers to
pay, and explain your current financial position.
Companies will often be sympathetic, if they are kept
informed about the reasons why you have been unable to
make payments as agreed.

Example letter 1 – Offer to people you owe
money to

                                                        Your name
                                                        Your address

                                                        Date:
Dear Sir/Madam:
Account number:

I am unable to maintain my current payments because
…………………………………………………………………………………..

(explain your reasons here – be as frank as possible)


Please find attached my personal budget, which gives
details of my Income and Expenditure.

I am unable to meet my current monthly payments, and
would like you to consider…………………………………………….

(write down the amount you can reasonably afford here – explain how often
you will pay and when you will start making payment)


I hope you will accept my offer, and freeze interest on the
account so my debt does not increase. I will keep you
informed of any changes in my circumstances.

I thank you for your help in this matter.

Yours faithfully,
Example letter 2 – Holding Letter

                                                      Your name
                                                      Your address

                                                      Date:

Dear Sir/Madam:
Account number:

I am unable to maintain my current payments because
…………………………………………………………………………………..

(explain your reasons here)


As you can see from my personal budget, I am unable to
make an offer to pay at this time.

(explain what you need to sort out, from Benefits to anything else that is
preventing you from making payments)


I would be grateful if you would be prepared to accept no
payments on the account and to freeze any interest for a
period of …………………………………………………………………….

(state when you will make contact again – make sure it is 6 months
maximum, as otherwise the offer may well be refused)


Should my circumstances change before this time, I will
write to you immediately with a new payment proposal.

I thank you for your help in this matter.

Yours faithfully,
Additional Information

If someone you owe money to refuses to accept
your offer:

Try to explain the situation in more detail. Most people
you owe money to would rather you made a small amount
regularly, than nothing at all.

Point out that if they take you to court, interest is likely to
cease from the time of any judgement.

If your circumstances change:

Contact the people you owe money to immediately if
things get worse, and explain the situation. Draw up a
new personal budget with a revised offer.

If the situation has improved, send a new personal budget
with an improved offer.

Dealing with Harassment:

People you owe money to cannot make threats, threaten
violence, make repeated telephone calls at unreasonable
times, repeatedly call you at work, or contact your
neighbours, friends or family about your debt.

If you feel you are being harassed, contact your local
Trading Standards team for guidance.

Hire Purchase and the law:

If you have a hire purchase agreement (for furniture, for
example), you do not own the goods until all payments
have been made.
If you have paid under a third of the total cost of the
item, the company can take back your goods immediately.
If you have paid over a third of the total costs, the
company can still take the goods, but would first have to
apply to the county court for a court order to do this.

Dealing with court action:

If you have been unable to come to an agreement with
the people you owe money to, they may start legal action
against you.

You must respond, or the court will make a decision in
your absence that is difficult to appeal against.

The courts are generally sympathetic, and provided that
you follow their advice – they will only ask you to pay
what you can afford.

If the payment becomes too expensive you can make an
application to vary the payment. Use form N245
(Application for suspension of a warrant and / or variation
of an instalment order), which you can get from your local
court.

The N245 form allows you to let the court know what your
income and expenditure is. You can use this to show if
you are unable to honour the payment schedule you had
previously agreed, if your circumstances change.
Useful contacts

The following is a list of contacts that may be useful if you
are experiencing financial difficulties:

Citizens Advice Bureau
A specialist advice service which helps people resolve their
legal, money and other problems by providing free,
independent and confidential advice.

To find your local Citizens Advice Bureau, see the C.A.B.
website: www.citizensadvice.org.uk or visit the Rent and
Money Matters pages of the Shepherds Bush Housing
Group website: www.sbhg.co.uk

Comparison sites - Utilities:
Gas and Electricity prices can vary hugely. You can make
savings by checking the price you pay, and comparing to
see if there are any cheaper alternatives. Websites can be
an invaluable source of this information:
www.myhomeenergyswitch.org.uk

Money advice:
The Money Advice Service offers advice on financial
matters from savings to basic bank accounts:
www.moneyadviceservice.org.uk

Debt advice:
There are several specialist debt advisory groups that
offer free, impartial advice for people in debt.
www.debtsupporttrust.org.uk or www.citizensadvice.org.uk
Remember - you can always contact Shepherds Bush
Housing Group at any time about any of the matters in
this advice guide.

We will help you wherever we can, and direct you to a
specialist organisation if more in depth help is required.

Call 0800 917 0839 and ask for your Income Officer or
email: income@SBHG.co.uk

				
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