Introduction to Debt April 2015 Roni Marsh

Reference Materials 3

Feelings and Reasons Redundancy Shame Literacy Fear Death Anger Business Failure Over indebtedness Creditor action Shame Fear Anger Distress Anxiety 4

Financial Statement 5 and 6

Benefits? Children – Child Benefit, Child Tax Credit Disabilities – Disability Living Allowance, Employment and Support Allowance Caring Responsibilities – Carer’s Allowance Rent – Housing Benefit aka Local Housing Allowance Mortgage – Support with Mortgage Interest Council Tax – Council Tax Benefit Benefit Cap and Bedroom Tax 8

Creditors List 9

Bank Accounts Account Fee Overdraft Setting Off Basic Bank Accounts First Right of Appropriation Continuous Payment Authority Financial Ombudsman Service Lending Code 11

Financial Ombudsman Service and Money Advice Service 12

Why not liable? Not in client’s name Not taken out by client Council Tax – Not liable person or property exempt 13

Priority Creditors 18 Priority Mortgage Gas Electric Council Tax Child Support Tax, VAT, NIC Secured Loan Service Charge Hire Purchase? Rent 18

Council Tax Enforcement Bailiffs Attachment of Earnings Order Attachment of Councillor’s Allowance Attachment of Benefit Order Third Party Debt Order Charging Order Bankruptcy Prison 21

County Court Judgment Claim and Admission 23

County Court Judgment Defence and Counterclaim 24

Money Claim Fees 24

Statutory Demand 24 and 25

FSA leaflet 27

Loans from individuals Non-Priority Debts Non-Priority Store Cards Credit Cards Pay Day Loans Unsecured Loans Catalogues Overdrafts Water Hire Purchase? Benefit Overpayments Social Fund Loans Loans from individuals 30

Non-Priority and Debt Options Take No Action Write Offs Payment Holiday/Moratorium Negotiated Agreement with Creditors Debt Reorganisation/Consolidation Loan Debt Management Plan (DMP) Full and Final Settlement Voluntary Charge 30

Big Four Debt Options Administration Order Debt Relief Order Bankruptcy Individual Voluntary Arrangement 32

36 and 51

36 and 51

Credit Rating 36

Leaflets 36

Exercise 1 – Ms Sawyer Does she have a spare room she can rent out? Is she on a water meter because as a single person it might save her money? Free university or other courses She is on an estimated bill and as a result she should give them her correct meter readings to get a correct bill. 38

Exercise 2 – Mr Luthor The possible debt options are: Take No Action Bankruptcy Negotiated Agreement with Creditors – Pro-rata offers Debt Management Plan 43

Exercise 3 – Mrs Lane She could claim Job Seeker’s Allowance She could claim Support with Mortgage Interest through Income Based Job Seeker’s Allowance She could claim Council Tax Benefit She should ring her mortgage, gas, electricity and local council about Council Tax and explain the situation and ask for time to pay whilst she applies for benefits She could apply for a grant from CHARIS to clear her gas and electricity arrears. Once she is on Job Seeker’s Allowance she could ask for an Attachment of Benefits Order for her Council Tax debt 43

Exercise 4 – Mr Kent The Debt Options are: Write Off Take No Action Debt Relief Order Negotiated Agreement with Creditors for Token Amount Also to be considered are: Direct deduction for gas and electric to reduce the debt repayments or application to CHARIS to get the debts written off. If there were things they needed they would probably be able to apply for grants due to Mr Station being long term sick. Free School meals, School Uniform grant, bus and tram discount 43

Exercise 5 – Miss Jor-El You could tell her it is a priority debt You could tell her that Council Tax most likely has a Liability Order and the enforcement options they now have available You could suggest an Attachment of Benefits Order might be the cheapest option You could also inform her about grants, Disability Living Allowance, free or low cost education as she is on benefits. 43