DEBT SELF HELP GUIDE
This leaflet aims to help you have a clearer understanding of debt and to give guidance about how to plan your budgeting.
Advice Centre
DEBT SELF HELP GUIDE
This leaflet aims to help you have a clearer understanding of debt and to give guidance about how to plan your budgeting.
It covers:
• ‘Priority’ and ‘non priority’ debts
• How to make repayment offers to your creditors
• This leaflet does not look at student loan repayments Please also see our on-line guide, ‘Dealing with Debt’, for more information.
Unfortunately for most students, debt is inevitable. The sooner debts are dealt with; the less likely they are to turn into a crisis. It is important to be in control of your debts, rather than letting your debts control you.
Before you can resolve your financial problems you need to gather together all the relevant information about your financial circumstances. This can be scary at times, but having all the information is essential before you can start to deal with all your debts in a proper way.
The Advice Centre offers specialist debt advice appointments, to book please contact us on 0114 2254148.
TOP TIPS FOR
DEALING WITH DEBT
• Don’t panic and don’t ignore your letters.
The sooner you deal with your debts the better.
• Ask for help from the Advice Centre. We can discuss your options and help negotiate with your creditors.
• Collect together all the information about your financial circumstances. It essential to have all this before you can start to deal with your debts.
• Work out a budget statement, so you can make realistic offers of repayment to your creditors.
• Tackle priority debts first. Have a look at the summary tables later on in this guide.
• Avoid further problems. Don’t increase your debt or agree to pay more than you can afford.
• Don’t give up. Small regular payments are better than nothing. Keep up with your payments and your debts will gradually reduce.
STANDARD PRIORITY DEBTS (P)
Mortgage or rent Council Tax
Gas, electric and water Court fines
Hire purchase (essential items) TV licence
ENFORCEMENT ACTION AVAILABLE
Repossession or eviction
Enforcement Agent warrant to remove goods or prison
Disconnection or CCJ
Enforcement Agent warrant to remove goods or prison
Goods could be repossessed Magistrate fine for non-payment, or if you can’t afford the licence don’t have a TV
STANDARD NON-PRIORITY DEBTS (NP)
Bank overdraft or loans
Credit / store card or catalogue Informal loan from a friend
Hire purchase (non-essential items) Pay day loans
University / tuition fee debts
Telephone
ENFORCEMENT ACTION AVAILABLE
Interest and charges or CCJ Interest and charges or CCJ Broken friendship or CCJ Goods could be repossessed Very high interest and charges or CCJ. See info on Continuous Payment Authority.
You cannot re-enrol or graduate, and you could be withdrawn. Can be a priority debt dependent on situation NP but you can be disconnected and be issued with CCJ or have a reduced service. You could swap to PAYG.
WHAT IS A CCJ?
A ‘County Court Judgement’ is a legal repayment arrangement. It means that you are subject to a Court Order to repay a debt. It may incur costs and is likely to affect your credit rating.
If you do not keep up with a CCJ then enforcement action can be taken against you, such as bailiff warrant or an attachment of earnings.
HOW TO AVOID UNNECESSARY MONEY WORRIES
• Be wary of deals or offers that look too good to be true.
They often are. You might end up being the victim of fraud, or even worse, charged with money laundering.
• Avoid agreeing to a continuous payment authority (CPA). These are used instead of Direct Debits, and can be tricky to cancel. They are often used by Payday lenders. The FCA has more information about this.
• The next time you think about buying anything, ask yourself:
a) Do I need it? b) Will I use it? c) Can I afford it? d) Is it worth it?
e) Can I get it cheaper somewhere else?
MAKING A BUDGET
• Ensure you complete all the figures on either a weekly or monthly basis.
• Try not to underestimate your expenses or debts.
• Remember to include one off expenses, such as books.
• Keep a copy of your financial statement.
• If your expenses are more than your income you should contact the Advice Centre to see if you are entitled to any extra financial help.
WHAT ABOUT MY CREDIT RATING?
• Credit Reference Agencies keep a record of al CCJ’s as well as information about your other credit debts. If you make a late payment, fall into arrears, or have a CCJ registered against you, then you may find it hard to get credit for the next 6 years.
• When you apply for credit (credit card, phone contract, mortgage etc) the lender with usually consult a Credit Reference Agency (CRA) such as Experian or Equifax.
• This is to check your ‘credit worthiness’, but remember there is no such thing as a ‘credit blacklist’.
• It may be useful to contact the Credit Reference Agencies to request a copy of your ‘file’ so you can check for any mistakes or out of date information.
CONTACTS
As well as contacting us directly at the Students’ Union Advice Centre (details overleaf), the following contact details may be helpful:
National Debtline
www.nationaldebtline.co.uk Telephone: 0808 808 4000 Money Advice Service
www.moneyadviceservice.org.uk Adviceguide (provided by the CAB) www.adviceguide.org.uk/england/debt Experian Credit Reference Agency www.experian.co.uk
Telephone: 0344 481 8000 Equifax Credit Reference Agency www.equifax.co.uk /
Credit card fraud and how to prevent it www.financialfraudaction.org.uk General Consumer Information www.moneysavingexpert.com Comparison Websites
www.moneysupermarket.com www.moneyextra.com
Sheffield Credit Union (Alternative Lending) www.sheffieldcreditunion.com
Financial Conduct Authority (was the FSA) www.fca.org.uk/consumers
SHEFFIELD HALLAM STUDENTS’ UNION
ADVICE CENTRE
Find Us:
City Campus
Sheffield Hallam Students’ Union The HUBS
Paternoster Row
Collegiate Campus
Room 202, Oaklands next to Heart of the Campus
Enquiry desk:
Enquiry desks at both campuses are open week days from 10am-4pm (except Thursdays when they are open 12-4pm) for initial help and information.
Drop-in service:
Monday - Friday, 1-3pm (no drop-in on Thursdays) No appointment needed - advisers available.
Email and telephone advice service:
Phone: 0114 225 4148 or 0800 073 2002 Email: [email protected]
All our leaflets and lots more help are available on our website:
hallamstudentsunion.org/adviceandhelp
We endeavour to keep the information in this leaflet up to date and correct. However, the law changes frequently - as do web links - and this may effect the accuracy of some of the information in the future.
The information contained is given in good faith and Sheffield Hallam Students’ Union accepts no responsibility for any errors or omissions. You should seek advice if you need further help.
