Clearing a path for your future

Tackling Debt’s

Our most frequently asked questions

What will other people think?

It really doesn’t matter what other people think. Chances are, they probably have their own debt problems. It is important to remember that you are not alone as there are many people who need debt advice.

How much does advice cost (do you charge)?

We do not charge for any advice we give. We will always tell you if there are any costs involved such as: a fee payable to the Insolvency Service for entering into a Debt Relief Order.

What will happen to my credit rating?

Any late / missed payments will stay on your credit file for 6 years. This also applies to you if you have any County Court Judgment’s (CCJ) registered against you as they stay on your file for 6 years. However, a CCJ on your credit file has a much more negative impact on your credit rating.

What is a priority debt?

A debt is a priority debt where as a result of non – payment, you may lose your home; you may be put in prison; loss of utilities (gas / electricity); or loss of essential goods and services. A priority debt doesn’t have to be the biggest debt, but must be dealt with before your non – priority debts.

The following debts are the most important and must be dealt with before you make arrangements with any other creditors. Examples of priority debts:

  • Mortgage / rent arrears = non–payment could mean losing your home
  • Fuel arrears = non–payment could mean having your gas / electric being cut off
  • Council Tax arrears = non–payment could mean bailiffs visiting your home or as a last resort – imprisonment
  • Magistrates Court Fines = non–payment could mean bailiffs visiting your home or as a last resort – imprisonment
  • Income Tax = non–payment could mean bailiffs visiting your home or as a last resort – imprisonment
  • TV Licence = if you do not have a valid TV licence, you may be fined in the Magistrates’ Court. If you do not pay a Magistrates’ Court fine, it could mean bailiffs visiting your home or you going to prison as a last resort

What is a non – priority debt?

If you do not pay your non – priority debts, the worst that can happen is that the creditors can pursue court action to recover the debt by way of a County Court Judgment (CCJ). If a CCJ is obtained, this will stay on your credit file for 6 years and it may be difficult to take out a loan or a mortgage for that amount of time.

Examples of non – priority debts:

  • Credit cards
  • Overdrafts
  • Unsecured loans
  • Catalogue debts
  • Door – step collectors (Provident, Greenwoods, etc)

Depending on your circumstances, there are other debts that may be non – priority:

  • Gas / Electricity accounts from previous property / previous supplier
  • Telephone / mobile phone – where the service has been disconnected
  • Gym / club memberships
  • Rent arrears from previous property
  • Mortgage shortfall

I’m not very good at budgeting, can you help?

Yes we can help with finding out how much money you have left each week/month by looking at your income and outgoings. In terms of budgeting, the first step is to work out an affordable, monthly budget so that you can make a regular payment on a regular basis to hopefully avoid further action being taken by your creditors. The budget sheet is also to help you to budget for the future and for any unforeseen expenditure such as school uniforms, Christmas shopping etc.

It is important to list all priority payments such as Mortgage, Rent, Council Tax, Utilities, Court Fines etc. For the purpose of the budget sheet, do not include payments being made to your non – priority debts in ‘Expenditure’.

A huge part of budgeting is being able to keep track of money coming in and money going out. Before you spend money on an item, it is important to take a step back and think about the reason for buying that item.

If you only have benefits/wages coming in, but no money put aside – ask yourself:

  • Do I need the item?
  • Do I want the item?
  • Can I find the item cheaper elsewhere?

If you have benefits/wages coming in and also have money put aside – ask yourself:

  • Will I use the item?
  • Is it worth the price?
  • Can I find the item cheaper elsewhere?

My energy company is threatening to disconnect my supply. What can I do?

You must contact the energy company immediately and make an affordable offer of payment. Depending on what stage the recovery action is at, you may be able to avoid disconnection or having a pre – payment meter installed at your property.

If you are facing genuine financial difficulty, your energy company may be able to offer you help with your water bill through a charitable trust or an ‘in-house’ scheme. The trusts aim to make a long-term difference to customers by giving a new start to those who through an event, such as a personal crisis, have found themselves in debt to their energy company.

Please click here to find out what schemes your energy company offers or download our helpful .pdf.

I am behind with my water charges. What can I do?

There are options available for you if you have water arrears. If you are facing genuine financial difficulty, your water company may be able to offer you help with your water bill through a charitable trust. The trust aims to make a long-term difference to customers by giving a new start to those who through an event, such as a personal crisis, have found themselves in debt to their water company These schemes offer financial help by way of a grant for customers who are in debt to their water company.

Please click on the following link to find out what schemes your energy company offers: Help with Water and Energy Bills Booklet

I have been told I have a ‘spare’ bedroom and will have my Housing Benefit reduced. Why does this apply to me?

Under – Occupation Charge (also known as the ‘bedroom tax’)

This will apply where working – age households are living in council rented accommodation and housing association properties. Your Housing Benefit may be reduced by:

  • 14%      if you have one ‘spare’ bedroom
  • 25%      if you have two or more ‘spare’ bedrooms

Example 1

John is a single person with no children and is living in a 2 bedroomed property. His rent is £100 per week and he receives full Housing Benefit of £100 per week.

Under the new rules, John is classed as having one ‘spare’ bedroom. Therefore, his Housing Benefit will be reduced by £14.00 per week (14% of £100) leaving John to pay the £14.00 per week himself.

Example 2

Stella is living in a 4 bedroomed property with her two sons aged 11 & 14. Their rent is £200 per week and she receives £60 per week in Housing Benefit.

Under the new rules, Stella’s sons would be expected to share a bedroom. Therefore, there are two ‘spare’ bedrooms. Therefore, her Housing Benefit will be reduced by £50 per week (25% of £200) leaving Stella to pay the £50 per week herself.

What is classed as a ‘spare’ bedroom?

The Government has stated that one bedroom is allowed for the following:

  • Each adult couple
  • any other adult aged 16 or over
  • two children of the same sex aged under 16
  • two children aged under 10 regardless of their sex
  • any other child
  • a carer who does not live with you but provides you or your partner with overnight care
  • If you are a foster carer, but have no child living with you, as long as the period without a child does not exceed 52 weeks
  • Adult children in the armed forces even when ‘on duty’
  • Children who you consider cannot share a bedroom because of a disability or medical condition. You be asked for medical evidence to support your claim.

What is the ‘benefit cap’ and how will I be affected?

From the 15th April 2013, the benefit cap was introduced in four local authorities (Bromley, Croydon, Enfield and Haringey). There will be a cap on the amount of benefit that a working-age household can receive. The benefit cap applied nationwide from the 15th July 2013.

The maximum amounts are set at the following levels:

  • £350 per week (£18,200 per year) for single claimants (single adult with no children)
  • £500 per week (£26,000 per year) for lone parents and couples with children.

To work out your total income, the Department for Work and Pensions will add up the amount benefit you are entitled to including: Jobseekers Allowance, Income Support, Employment and Support Allowance, Housing Benefit, Child Benefit and Carers Allowance.

However, the benefit cap does not apply to households in one or more of the following where someone is:

  • Claiming Working Tax Credit
  • In receipt of Disability Living Allowance / Attendance Allowance
  • In receipt of Personal Independence Payment
  • In receipt of War Widows & War Widower’s Pension
  • On the Employment and Support Allowance support component
  • In receipt of Industrial Injuries Benefit.

It is important to remember that if the amount of your benefit entitlement is more than your benefit cap, the first benefit to start reducing to bring you down to the benefit cap is Housing Benefit.

What can you do if you are affected by the Benefit Cap?

The government are stressing the option of finding employment  to avoid the cap but this may not be possible for you. Other options include:

  • Find out if you are entitled to a benefit from the above benefits that you might not already be claiming to be exempt from the cap
  • Reducing expenditure on non – essentials and where possible and using savings to make up the shortfall in Housing Benefit
  • Apply for a Discretionary Housing Payment by contacting your local council

Move to cheaper accommodation in your area or move to a cheaper area.

Why am I receiving creditor letters from a company that is different from the original creditor?

You may have received letters from a Debt Collection Agency (DCA) as some creditors use debt collection agency’s to collect the debt. Your account may be passed from one firm to another and this can incur charges. It can be difficult to keep track of whom you are dealing with, but you must ensure that any payments you make are paid to whichever debt collection agency is dealing with the account. Sometimes a debt collection agency is more flexible at accepting token payments than the original creditor.

It is possible that your debts may be passed to different debt collection agencies. If this happens, you need to stop paying the original agency or creditor and start paying the new debt collection agency. It is advisable to send a letter giving details of the previous arrangement with the original agency/creditor; details of your financial circumstances and a copy of your financial statement to support your repayment offer.

Do you have any energy saving tips?

Please click on the following link: Help with Water and Energy Bills

Do you have any water saving tips?

Please click on the following link: Help with Water and Energy Bills

Would I be able to call Auriga Services for debt advice?

You can call us on 0800 111 4894 to get through to Auriga Debt Advice if you are a customer of Severn Trent Trust Fund, United Utilities Trust Fund and Thames Water Customer Assistance Fund. We can then discuss whether or not a debt appointment would be appropriate for you.

I am falling further and further behind with my debts. What can I do?

Many people are in debt for different reasons, but it is important that you sort out your debt problems to prevent your financial situation from getting worse. Debt can affect anyone and the first step to dealing with your debts is recognising and accepting the circumstances that you are in. You can then take active steps to deal with your debts and money worries to improve your situation.

If you are in the position where you are about to miss your weekly / monthly payments or have fallen behind on payments towards your creditors, you must contact your creditors as soon as possible to inform them of your situation. The creditors are usually more willing to help you if they are aware of your current financial circumstances especially at an earlier stage.

It is a good idea to keep the latest letter for each debt in one place (e.g. making a file for each creditor) so that you can find them easily. Once this has been done, you need to work out which debts to sort out first.

Remember:

  • Stay calm and take a step back to look at your whole situation.
  • Avoid taking out further credit without getting some advice.
  • It is never too late to get advice.
Ways to cut your bills

Changing some simple things around your home could help reduce your gas, electric or water bills.

Please click the links below to download our Water and Energy Saving tips PDF.

Water Saving Tips

Energy Saving Tips

Tackling Debt FAQs

Quick Contact

If you would like further information on our services, please get in touch.

Tel: 0121 321 1324

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