I don't think people should be sent to prison for not being able to pay a debt. It rarely happens, but it's important to know the sorts of debt where this is a possibility. About a hundred people a year are sent to prison for council tax arrears - here is a case where a mother was in prison for 40 days before being released. About 30 people a year go to prison for not having a TV licence - … [Read more...]
Getting out of debt
Practical articles about the different debt options, which might work for you and different ways of dealing with creditors
Joint debts – what happens in an IVA / DRO / bankruptcy
A reader asked: I have received a letter saying we still owe £4,000 in council tax. The debt was included in my bankruptcy a few months ago but they are chasing my wife for the full amount, what should we do? This article looks at what happens to joint debts which are unsecured, not mortgages or secured loans. It covers all three forms of insolvency - bankruptcy, DROs and IVAs - because the … [Read more...]
What to do if your mobile or landline bill looks wrong
Mobile phone companies have a bad reputation for complaint handling, from shockingly high bills, incorrect charges and billing errors to poor debt collection practices. For example, Vodafone was fined £4.6million in 2016 for "serious and sustained breaches of consumer protection rules." Hopefully this fine will make Vodafone and the other mobile companies improve their complaints … [Read more...]
What to do if you can’t pay a water bill
If you have just received a water bill you can't afford, what can you do? If you ignore it, can they cut off your water? This article looks at the questions people often ask about paying water bills in England and Wales. But first, have you looked at how you reduce your next bill? This may not seem like a priority at the moment, but if you can pay less next year you can afford to repay your … [Read more...]
Is my house safe if my new partner goes bankrupt
Ms P asked "I want my partner to move in with me but he may have to go bankrupt so we need advice on the timing. He has got a lot of debt trying to keep his business going but it doesn't seem to be working. I have a house with a lot of equity and we don't want this to be at risk at all. The question is if he moves in now and goes bankrupt in a few months, will that cause a problem? Or is it … [Read more...]
“I borrowed 20k in two weeks” – a bipolar spending spree
Manic spending, during a high or period of mania, is one of the six triggers for increased spending identified in the Money and Mental Health Policy Institute's report, In Control: A consultation on regulating spending during periods of poor mental health. I was contacted by a reader who has suffered from bipolar disorder for many years - this is Miss D's story. I was diagnosed with … [Read more...]
Do you need help to escape from unaffordable debt?
My articles on How to ask for refunds looks at how to make affordability complaints about different sorts of debt - overdafts, loans, credit cards, catalogues, even car finance. It also applies if you have repaid the credit already or if you are still repaying a balance. But what do you do about this month's repayments if you can't manage them? You can't put in a complaint and then carry on … [Read more...]
Calculate the 8% extra interest on refunds – not easy
When the Financial Ombudsman upholds a complaint about an affordability complaint, the typical award is a refund of interest and charges on the unaffordable credit plus 8% simple interest. This interest can add up to a lot of money if the loans were repaid a few years ago. If you want to find out more about affordability refunds, and how people are winning these cases even when they never … [Read more...]
Misleading & aggressive debt recovery
A reader asked: My previous electrician has hired a debt collector, Guardian Recovery, to chase me for money for additional works never carried out. He refuses to engage with any meaningful discussion. I have now received an email from Guard Rec saying a notice of default may now be applied to my credit file. Can I actually receive a NOTICE OF DEFAULT on my credit report via a private dispute … [Read more...]
“Can I use the Right to Buy my council house when I have debts?”
A reader asked: I moved in with my parents into their council house several years ago and we are looking into the right to buy scheme. We received the paperwork and it stated that you are not entitled to the right to buy if you owe money to creditors. Five years ago I lost my job and had a relationship breakup and unfortunately got into debt. Two accounts were defaulted and I went into a payment … [Read more...]
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