Dealing with Debt
If you are finding it difficult to keep up with your bills, or getting into debt, why not seek advice early on to help you manage the situation? Girton Town Charity which receives regular approaches for help that cannot be met within its remit, asked Rachel Talbot from Citizens’ Advice Bureau to put together some advice for those experiencing financial problems. Helen Tonks from CHS Group has also contributed some tips for those with debt relating to housing.
By asking for help you don’t have to struggle alone and can start solving or preventing money problems such as: running up debts, not claiming benefits to which you are entitled, or having unpaid bills which could mean services, like your telephone, being cut off or you are threatened with being taken to court.
If you feel anxious about money, it may feel easier to ignore the problem. But this is not helpful as costs can quickly escalate and the situation will get worse. Take steps to start helping yourself by gathering all the information you have such as bills, letters, statements and contracts.
Open everything up and sort it into different piles for the different people you owe money to. If you need more support or don’t know where to start paying off debts, you’re not alone. Most people in debt aren’t sure about the best way to do this. Even though it might be tempting to take out payday loans to help with the problem, it’s better to avoid this type of borrowing as it can store up even greater trouble later on. Free help, including confidential advice, is available locally.
The CAB visits Girton every Wednesday afternoon at the William Collyn Centre (drop-in service 1.00-4.00pm), or you can call on 0344 848 7979 or visit www.cambridgecab.org.uk where you will find useful information about debt and money matters in the ‘Find Advice’ section.
It is always helpful if you can look at your budget so you have an idea about what your income and expenditure is before you come for advice as it means we can help you more quickly.
What is a budget?
A budget is a plan for your money, week by week and month by month. It tells you how much money you have coming in, how much you need to allow for essential costs and how much you have left towards other things you need.
It is your most important money tool. It helps you stay in control, feel less stressed and more confident about the future. It also provides evidence to the people you live with or anyone you owe money to, about what you can afford and if cutbacks can be made.
Getting an accurate and realistic budget can take a little time so try these tips:
- Gather all the information you think will help including bank statements, bills and receipts and keep them in one place in a large folder or an envelope.
- Don’t forget about smaller items which can quickly add up. A Spending Diary is a great way to check these.
- Remember occasional costs, such as birthdays, repairs or new shoes as it is these costs that tend to cause problems if you have not allowed for them.
- Do your budget with a friend or support worker to help you think through everything and to give you encouragement.
An easy-to-use tool for budget planning is available: www.moneyadviceservice.org.uk/en/tools/budget-planner.
If you have debts – bills and borrowing that you cannot pay when they are due – it is important to know the difference between ‘priority’ and ‘non priority’ debts.
Priority bills are the ones that you need to pay first because if you don’t the consequences can be very serious. For example, if you don’t pay your rent you may lose your home or if you don’t pay court fines you could face prison.
The most important bills to pay first are:
- Housing rent and service charges (or mortgage if you own or part own your home). For tenants of social housing, it’s a good idea to contact your landlord as soon as possible to explain the situation, ask if they can provide any help or support and come to an arrangement to make payments. They will be experienced in helping people in financial difficulty (and may have resources to give wider help with money and debts), and are more likely to be able to assist if you get in touch at an early stage.
- Council Tax – even if you qualify for your local Council Tax Reduction Scheme it is likely that you will have to make a contribution to your Council Tax bill. You can find out how much you need to pay from your local district council.
- Electricity and gas bills.
- Court fines or child maintenance that you are responsible for.
- TV licence.
The consequences if you don’t pay these bills can be very serious. If rent or mortgage payments are not made, you may lose your home. If electricity or gas bills are not paid, you may have your supply cut off. If council tax, TV licence or court fines/child maintenance are not paid, you may have money taken directly from wages or benefits, have your belongings taken and sold, or even go to prison.
Don’t pay other borrowing until you have dealt with your priority bills. This will keep a roof over your head and help you avoid costly fines or having your energy supplies cut off.
For additional support, visit CAB or if you would rather speak to someone on the telephone or use the internet, here are some reputable organisations:
Freephone 0800 138 1111
Mon–Fri: 8.00am–8.00pm, Sat: 8.00am–4.00pm
- National Debtline
0808 808 4000
Mon–Fri: 9.00am–9.00pm, Sat: 9.30am–1.00pm
- Debt Advice Foundation
0800 043 4050
Mon–Fri: 8.00am–8.00pm, Sat: 9.00am–5.00pm
Help in a crisis
A crisis can occur for lots of different reasons such as benefit delays, losing a job, an unexpected bill or gradually things getting more difficult until you feel you can no longer cope. If you don’t have enough money to feed, clothe or keep warm there is help available. There is no need to struggle alone.
Foodbanks provide an emergency supply of at least three days food. Getting help from a foodbank is straightforward and they support many people every year. To get your food you need a foodbank voucher which you can get through CAB or there are other organisations that can help you with this. Find more: www.cambridgecity.foodbank.org.uk
Talk to someone
If you are feeling stressed, worried or experiencing feelings you can’t manage, it will help to talk to someone who will listen, won’t judge and will help you through.
All of the below are free phone helplines:
- Samaritans: Call 116 123 available 365 days a year, 24-hours a day.
- NHS: Call 111 and press option 2 for a 24-hour service for people in a mental health crisis living in Cambridgeshire and Peterborough.
- Lifeline: 0808 808 2121 7.00–11.00pm, seven days a week.
Finally, if you would like to see how good you are at managing your money, check your money skills: www.makingmoneycount.org.uk/universal-credit/money-skills