Money Worries

Some frequently asked questions about money worries:

  • My debts are getting out of control and I can’t possibly pay them all. What can I do?
  • I have been refused credit to buy a new washing machine. What can I do? 
  • I have a county court judgment against me over an unpaid credit card debt and the card issuer has threatened me with bailiffs. What can I do? 
  • I am going to live on my own for the first time and am worried about how to manage my budget. What can I do to prevent getting into debt? 
  • I think someone may be using my credit card details without my knowledge. What can I do about it? 
  • A bank that I do not normally deal with has contacted me to chase an outstanding debt. I think I may be a victim of identity theft. What should I do? 

You can scroll down from here to find viewpoints and suggestions on these questions, then by scrolling further down you will be able to find links to organisations that will give you support if you have money worries, there are also links in blue that you can check out as you go.

My debts are getting out of control and I can’t possibly pay them all. What can I do?

If you are worried about your debts, try not to panic but do not ignore your problem.  The people you owe money to will not go away. It may be difficult but you should talk to the people or organisations you owe money to and let them know that you are having problems. Most organisations will be more helpful if you approach them first. There may be ways that they can help you if you do get in touch with them.

If you have more than one outstanding debt, or have fallen behind in paying your bills, you need to work out which debts are priority debts. A priority debt is one that could have serious results if unpaid. Not paying your rent or mortgage would leave you homeless, or not paying your gas or electricity bill could leave you being cut off and taken to court. When you have decided which are priority debts, work out how much you can realistically afford to pay back.
You will need to think carefully before taking out further loans to pay off existing debts. You may end up paying back a lot more than you borrowed and the interest rates may be extremely high. Some loans can be secured against your home and you could end up losing it if you fail to make repayments. Check your income and see if there are any benefits or tax credits you are entitled to that you are not getting. Look carefully at your spending and see if there is anything you are able to cut down on, again you can work out what are priority expenses and what things are not so necessary. You can also look at ways of reducing your outgoings, for example you could shop around for a cheaper gas or electricity provider, or look at cheaper mortgage or insurance providers.
Another option might be to go bankrupt. For more information about bankruptcy, you can find information on this by following the links to CAB in the list below.
You do not need to pay for debt advice. Your Citizens Advice Bureau gives free, independent and confidential advice. They can help you work out repayments and negotiate with your creditors.

I have been refused credit to buy a new washing machine. What can I do?

If you have been refused credit, you can re-apply to the same company or try somewhere else. If you are still refused credit, it may be that you have a low credit score. This means that the shop selling the washing machine has used a credit reference agency to look at your credit rating. The shop should have told you that they would use this method to decide whether or not you can have a washing machine on credit.
You can ask the shop which credit reference agency it has used. Write to them and ask for a copy of the file they hold on you. You will have to pay a fee for this, but it is usually quite low. If you think your record has incorrect information about you on it, you can ask the credit reference agency to correct it.
You might also want to look into other methods of paying for your washing machine. If this is the case please go to the Borrowing Money section in this zone.

I have a county court judgment against me over an unpaid credit card debt and the card issuer has threatened me with bailiffs. What can I do?

(This information applies to England and Wales only)
The first thing to do is to try and negotiate with the company. Even if you can't pay the debt in full, you could try to agree a set amount to pay weekly or monthly.
If you cannot come to an agreement with the company, they will need to get a warrant of execution from the courts before they can send in the bailiffs to remove property from your home in payment of your debt. If they already have the warrant, you should apply to the court to have it suspended.
If the bailiffs arrive, you do not have to let them in and they cannot generally force their way in. However, they are allowed into your property without your permission if they can enter without breaking in. This is called 'gaining peaceful entry' and includes getting in through an open window, or a closed but unlocked door.
Bailiffs are not allowed to take basic clothing, bedding, furniture or household goods, and any goods they do take will be sold at auction in order to pay off your debt.
The rules about bailiffs are complicated, and it is always sensible to get advice from a specialist adviser.

I am going to live on my own for the first time and am worried about how to manage my budget. What can I do to prevent getting into debt?

Try not to be intimidated by money matters. Keep track of how much money you have coming in and how much you have to put aside for bills, rent and food. You may find it helpful to set up standing orders and direct debits to pay your bills. Arrange for payments to leave your account soon after your pay date. If you can, try and save some money each month as a general savings plan or to cover emergencies when they arise. Make sure you look again at your budget each time there is a change in your income or any other change that might affect your finances.
Always shop around for the cheapest gas, electricity, telephone and insurance deals. There are many to choose from now.
Be careful about buying goods on credit. The interest repayments can be quite high. Also, be careful about interest free credit. It may seem a good deal but if you fail to repay the full amount before the end of the free interest period, you could find yourself paying the full interest, even if you are one day late on your payment. Try to pay at least 10% of your balance every month on your credit cards.
Don’t just run up an overdraft without talking to your bank, you will be charged for unauthorised overdrafts.
Be very careful about taking out any loans. Read and familiarize yourself with the terminology. Most important, know the difference between secured and unsecured lending. If you take out a secured loan, you are using your house as surety and may lose it if you cannot make the loan repayments.

I think someone may be using my credit card details without my knowledge. What can I do about it?

You may be a victim of identity theft. This is a type of fraud which takes place when someone you don't know gets hold of your personal details and uses them to access your account.
If you have been a victim of identity theft and your card is still in your possession, you will not have to pay for anything bought on it without your permission. If your card has been stolen, you will usually not have to pay, unless it can be shown that you have acted fraudulently or without reasonable care, for example by keeping your PIN number written down with your card.
You must act quickly: contact your credit card company straight away, keep a record of all conversations you have with them, and copies of any letters sent or received; and report the matter to the police, and get a crime reference number.
For more information and advice about credit card fraud and identity theft, go to

Web: www.cardwatch.org.uk
Web: www.identitytheft.org.uk

A bank that I do not normally deal with has contacted me to chase an outstanding debt. I think I may be a victim of identity theft. What should I do?

Identity theft is a type of fraud which takes place when someone you don't know gets hold of your personal details and uses them to apply for credit or to open an account in your name.
If you have been a victim of identity theft you will usually not have to pay for any money you have lost, unless it can be shown that you have acted fraudulently or without reasonable care, for example by keeping your PIN number written down with your card. You must act quickly:

  • contact the bank straight away, keep a record of all conversations you have with them, and copies of any letters sent or received
  • report the matter to the police, and get a crime reference number
  • check with the credit reference agencies (details below) whether any applications for credit have been made in your name. If they have, you can ask to have the information removed from your file
  •  if you suspect that someone has got hold of your details by stealing your mail, or has fraudulently applied to get mail redirected from your address, you should contact the Royal Mail Customer Enquiry Number on: 08457 740740
  • contact CIFAS, the UK's Fraud Prevention Service at www.cifas.org.uk. For a small fee they will make sure that anyone applying for credit in your name is automatically double-checked.


LINKS:

Citizens Advice Bureau (CAB)

Helps people resolve their money, legal and other problems by providing information and advice, and by influencing policymakers. 

Web: www.citizensadvice.org.uk

CAB Online Advice Guide

The online CAB service that provides independent advice on your rights on all aspects, including money, employment, tax and much, much more

Web: www.adviceguide.org.uk

Consumer Credit Counselling Service

CCCS is funded by the credit industry. It is registered charity providing free, independent, realistic advice to assist those who are in financial difficulty.

Web: www.cccs.co.uk

Community Legal Service

If you live in England or Wales and want free high-quality legal information to help you deal with your legal problems, Community Legal Service Direct (CLS Direct) can help.

Web: www.clsdirect.org.uk

Community Law Centre 

The Community Law Centre serves residents of Carlisle, Allerdale and Copeland. The advice service is delivered by appointments, outreach and static drop-in locations throughout the area.

Web: www.communitylaw.org.uk

Associations