Debt Archives

Getting out of debt

Practical articles about the different debt options, which might work for you and different ways of dealing with creditors

Can I spend backdated benefits money before going bankrupt?

A reader asked: I’ve just received a backdated Severe Disability Premium (ESA top up as on PIP too) and I am aiming to go bankrupt in May or June. I’ve been advised by a money advisor to use this money for essentials as I have just been given permanent accommodation having been homeless. No furniture came with the flat. I’ve been paying £1 a month to my creditors since last year. Should I … [Read more...]

Paying a defaulted account & your credit score

A reader asked if starting to pay a defaulted account will help his credit score. The simple answer is No! But there are very good reasons why paying defaulted debts will improve your general credit situation, making it easier for you to get a loan, a mortgage or a credit card in future. That credit rating number isn't the only thing that matters! To start, it's good to know what your credit … [Read more...]

How F&F settlements affect credit ratings

A reader has asked how Full & Final settlements (F&Fs) would affect her credit rating which is currently looking good as her debts were all defaulted and have dropped off her credit record. A full and final settlement happens when the creditors agrees to accept an amount which is less that the total owed to settle a debt, and agrees that the debtor will not be pursued for the remainder. … [Read more...]

Which debts can you go to prison for not paying?

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...]

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...]

Should I get a loan to repay old defaults?

Mr N has asked: On checking my credit score I have two defaults on my account both with the same creditor. First default was on 11/14 and the second 08/16 for a total of £1,750. I am now able to get back on track and get a loan to pay this in full. If I write to the debt collector and say I can pay this off and they give me their guarantee to put fully settled on my credit record, is this the … [Read more...]

How to make New Year resolutions you will keep

Happy New Year, everyone! Are you excited to have a blank piece of paper in front of you for your 2018 resolutions? Or is it a bit depressing as your list is much the same as last year... And last year half of them didn't make it to mid-January and you didn't stick to any of them for three months... This year, go for SMART resolutions. SMART is a term from professional project … [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...]