BSL - Dealing with debt

Dealing with debt

Bills are a fact of life, and sometimes you can feel swamped by debts. But you should never ignore bills, even if you can't pay them straight away. This film looks at some questions about your rights, the rights of people you owe money to, and the rights of bailiffs and debt collectors.

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Transcript

Chapters

What can I do if I have money problems?
I've got lots of debts - which ones should I pay first?
Can I go bankrupt?
A debt from years ago has come back - do I have to pay?
How can I stop my gas and electricity being cut off?
What if I can't afford my HP payments?
What can bailiffs do if they're chasing me for money?
I have a county court judgment, but I can't afford to pay. What can I do?
I've missed payments for a speeding fine from the magistrates' court. What should I do?
What if I think I am eligible?

What can I do if I have money problems?

Bills are a fact of life, and sometimes you can feel swamped by debts.

But you should never ignore bills, even if you can't pay them straight away.

This leaflet looks at some commonly asked questions about your rights,

the rights of people you owe money to, and the rights of bailiffs and debt collectors.

But everyone's situation is different and, especially if you owe money to several organisations,

you'll need expert help in working out how to deal with your debts.

There are several organisations that will help you with your debts,

and give you free, confidential, expert advice about how to get back on track with your finances.

See the section 'Where can I get help and advice?' in the final chapter.

I've got lots of debts - which ones should I pay first?

You need to work out which debts could have the most serious consequences for you.

The action organisations can take to get the money you owe them depends on the type of debt.

For example: If you don't pay your phone, gas or electricity bills, you could, as a last resort, be cut off.

But you can't have your water cut off.

If you don't pay your mortgage, the mortgage lender could repossess your home (take it back).

If you don't pay your rent, you could be evicted.

If you don't pay your council tax, bailiffs may come to take your belongings - you could even be sent to prison.

However, working out the best way to deal with many different debts can be complicated.

It will depend on how many people you owe money to, how much you owe,

and whether it's likely that you can pay all the money you owe.

If you're in this position, it's important to get expert advice quickly

You can get free, confidential advice from Community Legal Advice or National Debtline.

the sooner you start dealing with your debt problems, the more options you have for sorting them out.

Can I go bankrupt?

Bankruptcy might sound like an easy way of dealing with your debts

but it's really only a sensible option if you: have very large debts that would take years to pay, and

own very little of value that you could lose or be forced to sell (such as a house or flat).

And remember that if you go bankrupt: you will still have to pay some types of debt,

such as fines and student loans

it will be difficult to get credit in future

and you may lose your bank account.

Bankruptcy might be the right solution for some people

but there are less drastic ways of dealing with debts.

Community Legal Advice or National Debtline can give you advice about your options.

A debt from years ago has come back - do I have to pay?

This depends.

The law says that organisations you owe money to can start legal action against you to get the money

only within six years (or 12 years for mortgages)

since you made a payment or wrote to the organisation about the debt.

But even if you think you're outside these time limits, don't ignore the debt

get expert advice about how to deal with the situation.

You can get free, confidential advice from Community Legal Advice and National Debtline.

How can I stop my gas and electricity being cut off?

Cutting you off should be a last resort for gas and electricity companies if you haven't paid your bills.

They must first give you the chance to come up with a way of paying the money you owe at a rate you can afford.

And if you're elderly, you should never be cut off during the winter months (October to March).

If your gas or electricity company is threatening to cut you off

or if you're behind with your bills

ask the company not to cut you off, and say you are finding a way to pay.

Then get some debt advice on making a payment plan, and tell the company about it.

If the company won't listen to you and is still threatening to cut you off

contact Consumer Direct, the government consumer advice body

and ask it to refer you to Consumer Focus, which can take up your case.

What if I can't afford my HP payments?

until then it belongs to the HP company.

This means you can't sell it until you've paid it off.

If you miss payments, and you have paid less than a third of the total cost,

the HP company may be allowed to repossess (take back) the item.

But it can't come into your home to take the things you?re paying for (furniture, for example).

If you've paid more than a third,

the HP company must start court action to get the goods back or get you to pay.

If it does this, you can come up with a payment plan you can afford.

The court will decide whether this is fair, or whether you must return the item.

If you can see no way of making the payments

you may be able to end the HP agreement and give back the item

but you may still have to pay the company some money.

What can bailiffs do if they're chasing me for money?

With most debts, bailiffs should be used only as a last resort

and only after your case has been to court

The only time this doesn't apply is if you owe money to the tax office

(Her Majesty's Revenue and Customs)

- they can use bailiffs without a court hearing.

Bailiffs normally try to persuade you to pay your debt by threatening to take your belongings.

It can be difficult to negotiate with bailiffs,

but in most cases they're not allowed to force their way into your home

unless they've been let inside on an earlier visit.

So if you never let them in, they won't be able to take things from your home.

However, if they're chasing you for not paying a fine, bailiffs are allowed to force their way into your home.

If bailiffs have arrived at your home, or you think they are coming,

and you don?t have the money they want, contact one of the advice organisations listed in the final chapter.

there may still be things you can do to stop bailiffs taking your belongings.

I have a county court judgment, but I can?t afford to pay. What can I do?

I have a county court judgment, but I can't afford to pay. What can I do?

If you can't afford to pay your county court judgment (CCJ), get advice straight away.

There are ways of dealing with it, but you need to involve the court.

The court can, for example, reduce the payments in the court order

or say that you don?t have to pay for a certain time, if you have a genuine, serious problem.

If you simply don't pay, the person you owe money to can ask the court to take other action against you,

which could mean that: money is taken from your wages,

the debt is 'secured' to your home, so you could be evicted if you don't pay

or bailiffs are called in to take your belongings.

Seek advice, for example on what to ask the court to do, so that you can stay in control of your debt.

I've missed payments for a speeding fine from the magistrates' court. What should I do?

If you miss payments from a magistrates' court fine,

the fines officer will apply for an order to take money out of your wages (called an 'attachment of earnings order')

or out of your benefits (a 'deduction from benefits order').

If neither of these is possible,

they can take other steps, such as

clamping your car or calling in bailiffs

even sending you to prison

So don't wait to hear about the action to be taken

seek advice quickly.

Contact community legal advice or national debt line.

Community Legal Advice

If you have a low income, including if you receive benefits, and qualify for legal aid,

you can call us for independent advice about

employment,

debt

Education

Benefits and Tax Credits

and housing problems

If you do not qualify for legal aid, or if you have another type of problem

we can put you in touch with other organisations, helplines or local advice services that can help.

We can also direct you to other legal information resources.

Contact details of Community Legal Advice and other organisations

that maybe able to help are in the final chapter.

Can I get Legal Aid?

If you need help with costs of legal advice, you can apply for legal aid.

Whether you will get it will depend on:

the type of legal problem you have

your disposable (spare) income

and how much disposable capital (money, property, belongings) you have,

and whether there is a reasonable chance of winning your case

and wehter it is worth the time and money needed to win.

There is an online calculator on our website

Where you could see if you will be financially eligible for legal aid.

What if I think I am eligible?

If you think you could be eligible for legal aid,

you should speak to a legal adviser who can deal with legal aid cases.

You can search our directory to find an adviser in your area

at the 'Find a legal adviser' section of our website or call our helpline

You can find contact details in the final chapter