A day in the life of National Debtline - Monday 24 March

National_Debtline

Hi all

This coming Monday (24 March), David and I will be posting here inbetween taking phone calls from members of the public seeking debt advice. We’ll aim to give an outline of the problems they face and a summary of the advice we give, along with the intended outcomes.

The idea is to give you some more insight into what we actually do, especially for those of you who have never used our telephone service – or for that matter that of any other debt charity out there. We understand that calling a service like ours can be a big step into the unknown – hopefully this will make the prospect a little less daunting if you’ve been hesitating up to now.

Obviously we have no idea what kind of scenarios and problems Monday’s phone calls will throw up, but hopefully it will offer a useful cross-section of the work we do here day in day out. These summaries will aim to be concise, so we won’t necessarily give every last detail of the advice covered but will share the most useful and informative bits.

Please feel free to bookmark/subscribe to this thread and tune back in from 9ish on Monday morning!

Dennis

fermi

Subscribed.

National_Debtline

Morning all!

Later intro than hoped but the morning has been hectic - as Monday mornings are wont to be - and I figured you were a patient bunch. First posts to follow very shortly :-)

Dennis

Former_MSE_Andrea

Thanks Dennis, looking forward to seeing them

National_Debtline

First up this morning I spoke to the following caller:

Mother of three teens, privately renting in the North of England.

Now on Employment Support Allowance having been signed off work by her doctor.

£200 arrears on energy bill and £350 outstanding on her council tax for 2013/14. She had just made arrangements to pay back both these debts over the next few months.

A further £7K of credit debt spread across a couple of cards and an old overdraft.

Caller actually spoke to us about a couple of years ago but a lot of changes since - most recently her boyfriend has moved in with her. She has suggested they open a joint bank account but he is wary of becoming liable for her debts by doing so.

I'll post the advice given immediately below, just to break this up a bit.

National_Debtline

National_Debtline wrote: »

Mother of three teens, privately renting in the North of England.

Now on Employment Support Allowance having been signed off work by her doctor.

£200 arrears on energy bill and £350 outstanding on her council tax for 2013/14. She had just made arrangements to pay back both these debts over the next few months.

A further £7K of credit debt spread across a couple of cards and an old overdraft.

Caller actually spoke to us about a couple of years ago but a lot of changes since - most recently her boyfriend has moved in with her. She has suggested they open a joint bank account but he is wary of becoming liable for her debts by doing so.

We ran through the budget our caller (let's just call her A) had prepared. She had done this so it only showed her income and the bills she took responsibility for. All added up, bills exceeded income by £70 approx. - this was before the offers to pay council tax and energy arrears were even accounted for.

The issue here was clearly that A was taking on a larger share of the bills than she could afford to, and ideally them sitting down together and working out a joint budget sheet was the way to go. I explained that her partner couldn't "inherit" liability for her credit debts simply by banking or budgeting jointly. Any figures on a joint budget showing his income and his (share of) obligations would not compromise him or identify him in any way. I explained it was up to A whether she pro-rataed the bills first then did her own budget, or did a joint budget and then pro-rataed whatever money was left over to work out what she should offer her credit debts (in this case likely to be nominal amounts either way).

I suggested that she get the budget issues sorted before making any definitive payment agreements with the council and energy company - better to make a modest, realistic offer than a spectacular but unsustainable one.

I mentioned that in the longer run a Debt Relief Order might offer a useful solution for A, as on the face of it she would meet all the criteria and as things stood she would struggle to clear these debts on her limited resources.

A will now have a chat with boyfriend to explain what we discussed and hopefully as a result he will be less wary of putting that joint budget together and thereby working out more sustainable repayment proposals.

National_Debtline

Next up, I took a call from B in the South East. She is a single mum in social housing who has had to whittle down her working hours due to ongoing health and disabilty issues. Roughly £11K of various debts - including council tax, benefit overpayments and utilities - but the main concern that had prompted B's call was a credit card debt for which she was being sued through the county court. It seems the advice she had taken elsewhere had left her a little confused, as she was planning to defend the claim despite having no obvious grounds for doing so - she simply wanted to make the court and the creditor aware of her health problems and her difficulties in repaying this debt.

National_Debtline

National_Debtline wrote: »

Next up, I took a call from B in the South East. She is a single mum in social housing who has had to whittle down her working hours due to ongoing health and disabilty issues. Roughly £11K of various debts - including council tax, benefit overpayments and utilities - but the main concern that had prompted B's call was a credit card debt for which she was being sued through the county court. It seems the advice she had taken elsewhere had left her a little confused, as she was planning to defend the claim despite having no obvious grounds for doing so - she simply wanted to make the court and the creditor aware of her health problems and her difficulties in repaying this debt.

Firstly, I warned B that to go ahead with a defence could result in additional costs if it proved groundless. Though the debt dated from 2007, I explained that time limits issues did not apply as the card had been used as recently as 2011. B's financial difficulties and health problems were absolutely things to bring to the court's attention, yes, but in the context of an "admission" of the debt along with a realistic offer of repayment.

We then looked at B's income and outgoings to see what such an offer might be. As I anticipated, there was very little left over after budgeting sensibly but realistically. In particular, the level of payments B was having to make on her key meter for electricity - ongoing usage plus reduction of existing arrears - was eating very heavily into her modest outcome. (After the call I would send out some additional information on schemes offered by her supplier to help struggling/vulnerable customers - they are often not aware such schemes exist).

As before, I formed a conclusion that a Debt Relief Order (DRO) would offer many benefits to B, and few counter-effects beyond the damage to her (no doubt already compromised) credit file. The beauty of a DRO is that it would serve as a "blanket" covering the various types of debt owed by B, without having to go through separate procedures to address each debt in turn. When we talk about "consolidation" here at NDL, this is what we tend to have in mind.

Of course the choice of routes is always left open to the caller, and it was no different here. In most cases, however, the caller is understandably keen on the idea of pursuing an option which will simplify a complicated situation and give them a fresh start along with that all-important peace of mind. That was certainly the impression conveyed by B and I hope that she does indeed go down the DRO route, whoever arranges it for her.

National_Debtline

Third call of the morning was from C, a 50-something lady in the Midlands. She is in receipt of disability benefits and lives on her own in social housing. Her debts included some utility arrears and and credit cards (roughly £5K in all), but this time with the added complication of an outstanding payday loan - this was the subject of an instalment plan but the lender still had C's current bank details. It seemed that no single sudden event had triggered C's decision to call us, more a steady accumulation of debt.

National_Debtline

National_Debtline wrote: »

Third call of the morning was from C, a 50-something lady in the Midlands. She is in receipt of disability benefits and lives on her own in social housing. Her debts included some utility arrears and and credit cards (roughly £5K in all), but this time with the added complication of an outstanding payday loan - this was the subject of an instalment plan but the lender still had C's current bank details. It seemed that no single sudden event had triggered C's decision to call us, more a steady accumulation of debt.

The primary concern for me was to ensure C's income was safeguarded. This meant advising her to immediately cancel any continuous payment authority in respect of the payday loan, by contacting her bank ASAP. I advised her to notify the lender as well but pointed out that the bank should act on her instructions regardless. Going forward, I recommended that she open a different bank account altogether as she was currently operating within an overdraft, albeit authorised, and this meant that her already meagre income was being depleted by the bank's interest charges.

* As an aside, a regular conversation I have with callers is explaining that genuinely "basic" accounts should in theory be available to all but a few - unless you are bankrupt, a known fraudster or unable to prove your identity to the bank's satisfaction, you should be accepted somewhere or other. Of course we understand that it can sometimes still be more complicated to get these accounts open than it ought to be. *

Once again, a comprehensive household budget revealed that C, like so many callers, was operating at the margings and spare cash was sparse if not non-existent. I encouraged her to keep the credit debts in some perspective and to treat them as the lower priorities they were. She had understandably been left in two minds by the aggressiveness and determination with which these debts were being pursued - perhaps they were as important as the collectors made out over the phone? I recommended that she deal with them exclusively in writing so as to take the "heat" out of any negotiations and to be able to approach them on her own terms. One of the most important aspects of our role is that of empowering a caller to feel more confident about facing the debts after our conversation is over, not just for the 20-30 minutes they spend on the phone to us.

Anyway, once again a Debt Relief Order made a lot of sense as a long-term solution, given the straitened budget C was living on. I realise it must sound as if this is the only sort of scenario we cover but that's just how the cards were dealt this morning!

Hopefully the remainder of the day will see a more diverse set of issues coming up.

Dennis

National_Debtline

Caller D recently checked her credit file as she is planning on applying for a mortgage. She has discovered a county court judgment from 2012 which was from a dispute. D never recieved the original claim form as she has moved and asks about applying to have the judgment 'set aside'. She also has a car on hire purchase and a couple of credit cards shich she clears every month in full.