I'm First-Time Tenant With a Stupid Year Behind Me...

hobowithahotbun

...and it has caught up with vengeance. In the last 2 days I received a notice from the HMRC about overpaid Working Tax Credits & was shown a letter from a debt recovery agency about an overdraft I have with my long abandoned bank account (the letter was delivered to an old address). The debt put together means I owe around £2,000 but I am currently on Jobseekers Allowance (£30.84 per fortnight) & recently got my own flat (after 8-9 months within the homeless system - I stayed in a hostel & then a temporary furnished flat until May) which I rent from the local authority - that is paid by my housing benefit, but I have to pay £25 a month council tax. I eat at friends and family's houses a lot, I don't have any money for fun stuff anymore & this was even without the debt on my mind - I can't see even being able to pay off the debt at a fiver a week realistic for me. I am desperate for a job but have had absolutely no luck at all, I've had one interview the entire year (although I'll obviously keep trying as what I'm on right now is just a pittance - I'm hoping to find volunteer work somewhere within walking distance). The Statement of Affairs says I have £6.68 available for debt repayment a month but I have not entered grocery, clothing or mobile phone costs into it because then I'd be in the red.

Instead of signing on when I was homeless I kept taking the WTC's, which made sense to me at the time (I thought to myself that I was taking less than if I was claiming JSA so it was okay, I was being treated for depression - shoulda been treated for idiocy). As far as my overdraft debt - I paid off an overdraft of £200 last year just before I was made homeless (I'd actually say struggling to pay that off was a contributing factor as to why I became homeless) but for some reason the bank must have gotten an unexpected direct debit or something and all this time it has built up a massive debt again, I never informed the bank I was homeless & I never received any word about statements or letters sent to my old address until now, just as I sorta felt like I was getting up on my feet again.

I have also applied for grants but have been rejected (to the bemusement of any social care worker I am in contact with) - I did receive a small fold-up bed, a table-top cooker & some blankets from a social care team who was helping me settle but have received nothing else. I have not acknowledged either debt as of yet and would appreciate any advice that can be handed to me - I hope it is not as bad as it is making me feel right now, but even some firm advice on how to dig my way out of this hole would be welcome right now.

Tixy

Hi and welcome

As you say your statement of affairs would show a negative if you add in groceries etc then it might be worth posting it on here (with groceries, phone costs etc all in) to see if anyone can come up with any suggestions to reduce any costs/get things cheaper etc. As a starting point we need to help you be able to balance income & outgoings on a monthy basis.

Regarding the debts - how much is the overdraft balance now? who is the debt collectors? (I'm wondering if its the banks in house collection agency or an external one). If most of the balance is made up of charges & interest you might be able to get the balance reduced (especially if you explain you were homeless and not receiving your post). Then you should be able to offer just a £1 a month token payment towards the debt until your finances improve.

The tax credits might be a bit more complex - how much are they saying you owe? what year does the overpayment relate to? have you not responded to the letter at all yet?

As an aside - have you tried joining freecycle/freegle to see if you could get some additional furniture items from there to help with your flat? is there a local furniture project that might be able to help you out at all?

hobowithahotbun

The latest letter is from Westcot, I'm too scared to open it - but I can see the logo and the amount of debt that they say I owe. I stopped using my bank account after I thought I'd paid off the debt in July/August of last year (the WTC were being paid into a different account) - I didn't cancel the bank account as I expected to start using it again. I never had an over-draft function on the account and I signed up for a couple of direct debits which I absolutely had no control over (or at least felt like I didn't) which put me in a bit of debt (£200) - I borrowed money from a family member who paid it off for me & then I found myself at a Homeless place soon after.

I have received a sofa from a friend as well as a kettle and a toaster, little things like that & I'm doing okay - quite happy with my flat, but I'm scared to death of losing it. Thanks for the suggestion.

Here is my SoA - I manage to get some groceries from other people and things like all-day tickets for the bus when others have used them in the morning but ideally I'd be buying my own groceries and bus tickets. My friends/family help a lot and if they were taken away I'd be in major trouble.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 61.68
Other income............................ 0
Total monthly income.................... 61.68

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 25
Electricity............................. 20
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 30
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 95


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
WTC............................996.13....0.........0
Overdraft......................1097.96...0.........0
Total unsecured debts..........2094.09...0.........-


Monthly Budget Summary
Total monthly income.................... 61.68
Expenses (including HP & secured debts). 95
Available for debt repayments........... -33.32
Monthly UNsecured debt repayments....... 0
Amount short for making debt repayments. -33.32

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -2,094.09
Net Assets.............................. -2,094.09

tallyhoh

I am a bit puzzled as to why you are paying council tax, is it arrears.

hobowithahotbun

tallyhoh wrote: »

I am a bit puzzled as to why you are paying council tax, is it arrears.

Um, no. It's charged from when I moved in to my new place until the end of March next year - it doesn't come under the Housing benefit, does it? That's a separate thing. It's a council tax and water service charge.

Pinkbunnie

You should get council tax benefit to cover it. Go to the council and ask for an application form.

tallyhoh

you should be paying little if any council tax, as Pinkbunnie says go & get an application form.

gettingbackontrack

Hi OP

Congratulations on getting your flat and getting through the past year. You shouldn't be so hard on yourself - you've been through a lot.

You definitely shouldn't be paying council tax - my experience when I was getting JSA after being made redundant was that it council tax benefit was processed very quickly, and it was backdated too the the start of my JSA claim. Your JSA seems very low - are you sure that's correct?

Re your debts, ring one of the debt charities (national debtline, or CAB) who will be able to advise you on the best way to deal with them. You shouldn't be struggling on alone with this.

Good luck with the job hunting and with getting this sorted. I'm sure you won't lose your flat and there are ways to deal with the debt. Take care.

Tixy

Is that benefit income of £61.68 your JSA? Is that the right amount? It seems low.
You need to check you are getting everything you are entitled to, and as others have said should be able to apply for council tax benefit. If you didn't have to pay ctax you would certainly be in a better position.
Maybe have a look at the turntous benefits calculator - http://www.turn2us.org.uk/benefits_search.aspx

Sharon87

Job Seekers should be double that, and you should be getting council tax benefit with your housing benefit claim too. JSA is about £61 a week for 25 and overs, £51 or so under under 25s. The only reason you get less is if you do some work or living with a partner on low income or have huge amounts of savings. Sounds like you should be getting £61 a week, not a month!

hobowithahotbun

Tixy wrote: »

Is that benefit income of £61.68 your JSA? Is that the right amount? It seems low.
You need to check you are getting everything you are entitled to, and as others have said should be able to apply for council tax benefit. If you didn't have to pay ctax you would certainly be in a better position.
Maybe have a look at the turntous benefits calculator -

Thanks for the replies everybody, I tried this calculator & it says I should basically be getting double the amount of JSA that I am - so I'm going in to see what that is all about. I have to pay the Water and Sewerage charge - will check that out at the Housing office. I'm pretty quiet so I never really ask about these things (and JC workers/Housing officers never seem to care to tell me).

In regard to my debts: if I'm being honest I am very tempted to keep burying my head in the sand until there's no way for me to ignore it. My bank overdraft particularly seems unfair (although I probably should have told the bank I had fallen out with the tenant of my old address and didn't have a fixed abode, I didn't think about it at the time) - is there anybody who can tell me if there is a way out of that debt? My bank account was in the black before I became homeless and now I'm getting back to some normality it's almost £1,000 in the red... how can bank charges even be allowed to get to that amount? Shouldn't there be a cut off where they close the account when it gets to -£100 or something?