StepChange #debtmyths

StepChange_James

The myth:

You can't claim back PPI if you're on a DMP #debtmyths

The reality:

There’s absolutely nothing to stop you claiming back PPI while you are on a debt management plan (DMP). Just like everyone else, remember to claim back PPI yourself for free rather than use a claims management company who’ll take fees.

If you’re successful with a claim you’ll be compensated one of two ways. You may be sent the money directly or the money could be paid towards your debt. If the money is paid to you then we’d strongly advise you to use this money to reduce your debts anyway, so it doesn’t really matter how they make the payment.

MoneySavingExpert.com has fantastic instructions on claiming back PPI and we’ve got a blogpost about claiming back PPI for free if you’re on a DMP.

System

The myth:

If you go bankrupt your name will appear in the local newspaper

The reality:

There used to be a section in the local newspaper for bankruptcy, to inform creditors. Nowadays insolvencies are rarely advertised in the local paper unless it’s in the public interest and/or the Official Receiver believes that other creditors may want to claim (this is sometimes the case with self-employed local business bankruptcies).

Your bankruptcy, along with other types of insolvencies, will be mentioned in the London Gazette (a trade paper for creditors) and will be listed on the Government’s Insolvency Service website, searchable by name.

StepChange_Private_Messages

The myth:

I can hide my possessions from a bailiff #debtmyths

The reality:

When a bailiff enters your property for the first time, they’ve gained ‘walking possession’ and may return and enter a second time to take items belonging to you without your permission.

On the first visit the bailiff will usually take a ‘levy’ of the goods in your property. A levy is a list of items the bailiff has witnessed in your property that may be of value. The bailiff will not usually take any items on the first visit in order to give you time to pay the amounts owed.

You can’t hide, dispose of or remove items the bailiff has taken a levy on. This is an offence and could have serious consequences for you.

Former_StepChange_Rachel

The myth:

You can't afford to save if you're in debt #debtmyths

The reality:

We help thousands of people to plan monthly budgets and nearly every one of them will include costs that don’t happen every month but are certain to crop up at some point. So even those with debt problems need to be able to plan for these sorts of things and have some money available to cover irregular costs.

While many clients I’ve spoken to over the years haven’t wanted to budget anything for car repairs or clothing and footwear, we’ll strongly recommend that they do, as otherwise it’ll become very hard to stick to a budget.

If you’re in debt then it’s important to get the balance right between putting money aside for irregular costs and making sure you’re paying as much as possible towards debts. Clearly having huge piles of money in savings while having debts is usually a bad idea and the money could be used to bring down debts.

It’s something we’re experienced at helping people with, so if you need help contact us and we’ll give you a hand.

StepChange_James

The myth:

You aren’t allowed to have Sky TV if you’re on a DMP #debtmyths

The reality:

While it is admirable to use every spare penny you have to bring down your debts, it’s also worth taking a longer term view of things too. We advise against taking out the most expensive premium TV packages with companies like Sky and Virgin Media but we usually suggest looking at the lowest tariffs rather than getting rid of the service all together.

We speak to people in a variety of situations, and if you have to choose between being able to feed yourself or pay for extra TV channels then it’s a good idea to get rid of the whole thing. On the other hand, if you’re going to be on a tight budget for a number of years then spending a small amount a month can help to keep you entertained when there’s little money for more expensive pastimes.

There’s a really useful article on getting your TV package reduced on MoneySavingExpert.com.

Petlamb

I haggled and got Sky TV, phone line rental and BB all for £33 a month. Now, as we have unlimited broadband in that, it's actually a pretty good deal. It was £46 before!

It'll only take 10 mins of your time, and it could save you enough that it becomes reasonable in your budget

Former_StepChange_Rachel

MONDAY

The myth:

Debt advice doesn’t make any difference #debtmyths

The reality:

I used to work in our charity’s Helpline, where you first come through if you call US. Callers would often have the impression that we’d be able to give them extra money to help them pay off their debts (it would make our job easier, if not the callers’ lives, if we did though!).

When I explained that we give people advice and help them find solutions these people would initially think that this wasn’t enough . Some people hear debt help and assume this will be a cash payment but in reality getting good advice is often much better than more money.

I’ve spoken to countless people who’ve been given money from family to “solve” their debt problems and it’s just been used to struggle on with payments for a while before needing to get advice in the end.

We recently commissioned some research that showed 88% of people on debt management plans (DMPs) with us had an improved family life as a result of our help. So while debt advice won’t put any more money in your pocket, it can be life changing.

StepChange_James

The myth:

Debt charities have long waiting times #debtmyths

The reality:

While we can’t speak for the other free debt advice organisations, we don’t have long waiting times. If you get advice from our online tool Debt Remedy then you’ll be able to get a recommendation within 20 minutes. This can be accessed 24/7 and we regularly see that people have been using the service in the dead of night.

If you prefer to get debt advice over the phone then giving us a call on our free helpline number will mean that you’re put through to a Helpline advisor. They’ll be able to give you any emergency debt advice you need straight away and take a few details to set you up on our system, ready to speak to a debt advisor.

So far in January we’ve been able to pass more than half our callers straight through for a debt advice session straight away. Often people prefer to arrange an appointment for us to call them back, which at the moment will be booked within a few days of the initial call.

dowling

What are the rules regards had a credit card couldent pay as had other debts it was passed over to a collection deptartment agreed a payment but they have bumped up interest never be paid off been nearly six years of paying

StepChange_James

dowling wrote: »

What are the rules regards had a credit card couldent pay as had other debts it was passed over to a collection deptartment agreed a payment but they have bumped up interest never be paid off been nearly six years of paying

Hi Dowling,

Companies are allowed to add interest and some charges onto debts, but there are some cases where these might be seen as unfair. I'd suggest that you request a detailed statement to see if any of the charges they've added to the debt seem unfair or excessive.

If they are then you can submit a complaint (best to do this in writing) to the debt collector. If you aren't happy with their response to your complaint you could then contact the Financial Ombudsman Service and ask them to investigate the account.

If you'd like to get some more detailed advice about your finances you might want to get in touch with us. You can do this by using our free online advice tool, Debt Remedy (http://www.stepchange.org/msehelp) or by giving us a call (http://www.stepchange.org/Contactus.aspx).

Kind regards

James

(p.s. we'll put up another #debtmyth this afternoon)