CouncilDebts …how to deal with them
Many people have problems with debts. This information gives you basic advice about debt and simple guidelines for dealing with money problems. If you are worried about debt , there are debt self help packs and free, confidential advice available.
Golden rules:
- Don’t ignore your debts
- Don’t ignore letters
- Don’t borrow to pay debts
- Take control – know your rights
- Follow the steps in the Debt self help advice pack
- Seek specialist advice
The Tower Hamlets Community Legal Service Partnership has produced a self-help Debt Advice Pack. The pack includes blank financial statements, sample letters and forms for you to use and describes how you can deal with debts by taking the following steps:
- Check whether you can get more money, reduce your bills or manage your bills better
- Check that you owe (are liable for) the debts
- Sort your debts into priority (important debt) and non-priority (less important) debts
- Look at your income and your expenses, to see what you can afford to pay creditors
- Deal with our priority debts before dealing with all other debts.
For a paper copy of the Debt Advice Pack:
Tel: 020 7364 6718 or
E-mail: consumeradvice@towerhamlets.gov.uk
Copies are also available at Tower Hamlets’ One Stop Shops and local advice agencies.
For more complex debt problems see below
Other sources of information on how to deal with debt
National
Debt Line
Tel: 0808 808 4000 Free phone for debt advice – Monday - Friday
9am to 9pm Saturday 9am to 1pm
Consumer Credit Counselling Service
Tel: 0800 138 1111
Visit: www.cccs.co.uk
Adviceguide
Independent on line advice provided by Citizen’s Advice
Types of debt and what could eventually happen
All debts are important, but some are more pressing than others. The ultimate consequences of not dealing with a particular debt - in other words the worst that can happen - depends on what the debt is for. Some debts carry severe penalties and you should deal with these debts first. These are your priority debts. The list below shows what may eventually happen if priority debts are not dealt with.
- Mortgage - repossession of your home; eviction
- Second mortgage/secured loan - repossession of your home; eviction
- Rent - eviction from your home
- Council Tax - distraint (this is the seizure of some of your goods by bailiffs); deductions from wages/benefit; imprisonment
- Water rates - supply disconnected
- Gas/Electricity - supply disconnected
- Unpaid Magistrates Court fine - distraint; deductions from wages/benefit; imprisonment
- Unpaid maintenance/child support - distraint; deductions from wages/benefit; imprisonment
- Income tax/VAT/National Insurance - distraint; bankruptcy
- Telephone - disconnection
- Hire purchase (not normal credit) - repossession of HP goods
- Unsecured credit card debts - County Court Judgement; impaired credit rating
Don't make promises you can't keep
Don't be bullied into agreeing to repayment arrangements that you cannot keep. Arrange a rate of repayment that you can afford to keep up, based on the figures in your personal financial statement. Otherwise, sooner or later, you are likely to default or miss payments elsewhere and find yourself back in trouble. The aim is not just to solve the immediate problem but also to get things organised so that you can afford to pay your creditors and meet your other expenditure for the foreseeable future.
Make regular payments
Many firms are computerised and these systems are programmed to send reminders and warnings automatically if payments are missed. It is better to make regular payments, however small, rather than make large occasional payments.
The law is on your side
Although the law gives creditors the power to take action to recover the money you owe them, it also makes them go through fixed procedures before the final action can legally be taken. So the law also gives you protection. For example, you cannot legally be evicted from your home without the creditor having been to court and obtained the necessary authority.
Don't be unduly intimidated
Harassing people in debt is illegal. If you are harassed by creditors seek advice immediately. You can make a complaint to the local Trading Standards Office or the Police. If the person is your landlord, you should contact the council's housing service.
Pid No: 651
