Dealing with Debt by University of Sussex Students' Union

Contents:

Introduction

Types of Debt

The Effects of Debt

General Tips for Dealing With Debt

The 7 Steps to Dealing with Debt

Step 1: Your Income

Step 2: Your Expenditure

Step 3: Your Available Income

Step 4: Your Priority Debts

Step 5: Your Available Income for Other Creditors

Step 6: Your Non-Priority Debts

Step 7: Staying Out of Debt

Appendix

Appendix I:

Blank Budget Sheet

Appendix II:

Calculation Guide

Appendix III:

Template Financial Statement

Appendix IV:

Equitable Distribution Calculation

Appendix V:

Template Letters to Creditors

Useful Contacts

Introduction: Are you in debt? Do you owe money to your landlord, to utility companies, to your bank, to a credit card company or to anyone else? Are you receiving demands for payment that you simply can’t make? Do you leave letters unopened because you’re afraid of what they might contain? Do you feel like you are constantly juggling your money to make one payment or another? Have you borrowed more money just to repay what you already owe? Do you feel like there is no way out? If you answered yes to any of the above, then this pack is for you. There are many reasons why people fall into debt. It might be because you have lost your job or are unable to work because of illness or disability. It could be that you have recently split up with a partner, had a baby or experienced some other change in your personal circumstances that leaves you with less money than you need. For many, especially students, it could be that you simply don’t have enough money to pay everything that you owe. Whatever the reason, being in debt is a common but all too frightening & upsetting experience but don’t panic, help is at hand! The Student Advice Centre (SAC) is a free, confidential & independent advice service run by the Student’s Union here at the University of Sussex. We offer advice, information, support & representation on almost any academic or non-academic issue that might arise during your time at Sussex. We are located on the first floor of Falmer House & run daily drop-in sessions at the following times: Day

Drop-in Times

Monday Tuesday Wednesday Thursday Friday

11am - 1pm 11am - 1pm 11am - 1pm & 2pm - 4pm 11am - 1pm 11am - 1pm

You can also contact the SAC for advice by email (advice@ussu.sussex.ac.uk) or by telephone (++ 44 1273 877038) & may also wish to look at the online advice on our webpages (www.ussu.info/advice). The SAC is wheelchair accessible & many of our leaflets are available in alternative formats for visually impaired students. If you are deaf or have a hearing impairment, please contact us so that we can arrange an appointment with you with a portable induction loop. The SAC employs a professional Money Adviser who is able to offer help on any practical money-related issue, including dealing with debts. Our professional Generalist Advisers are also trained to offer advice on moneyrelated issues. If you are experiencing financial difficulties, come to one of our daily drop-in sessions initially. If you need further help or advice, you will be offered a follow-up appointment. The SAC is committed to providing you with the means to help yourself wherever possible, although we are always here to help to whatever extent you feel you need us. In recognition of the fact that you may prefer to work towards resolving your debt problems independently, we have produced this pack aimed at helping you to deal with any debts yourself in a systematic way. Amongst many other things, this pack contains information about the different types of debt & how to deal with them, tips on how to negotiate with creditors, information about the effect of debts on your credit rating & tips on how to maintain repayments & stay out of debt in future. Please note that, due to the limited space available & the complex nature of these debts, this pack does not contain information about dealing with mortgage arrears, business debts or debts to HM Revenue & Customs. If you have any of these debts, please speak to our Money Adviser, who will refer you to an appropriate specialist advice agency.

Types of Debt: Before going on, it is probably a good idea to provide some simple definitions of terms that will crop up often in this pack: The Debt: The money that you owe to someone The Debtor: The person who owes the money The Creditor: The person(s), company or institution that you owe the money to. This could be the initial creditor themselves, agents acting on their behalf or a debt collection agency that has bought the debt off of the creditor Enforcement Action: The action that the creditor can take against you to recover the debt Priority Debts: Debts where the creditor could take enforcement action that leads to you losing your home, your liberty or an essential service Non-Priority Debts: All other debts (usually credit debts), where the creditor may be able to take you to County Court but cannot take action that leads to you losing your home, your liberty or an essential service You may have debts to more than one creditor, for example you may owe rent to your landlord, money to your bank for a loan & money for a missed payment to your mobile phone company all at the same time. Whilst it is not uncommon to have various different debts owed to several creditors, it is important to understand the difference between them & the enforcement action that is available to the creditor. Throughout this pack, we will refer to debts as being either ‘Priority Debts’ or ‘Non-Priority Debts’. Whether a debt is a priority debt or a non-priority debt is basically determined by the extent of the enforcement action open to the creditor. Thus a priority debt is a debt that is viewed as being more important than a non-priority debt because the ultimate enforcement action open to the creditor, & consequently the possible outcome for you (the debtor), is more extreme. Common priority debts & the ultimate enforcement action that could be taken against you include the following:

Priority Debt

Ultimate Enforcement Action that could be taken against you

Rent Arrears Secured Loan TV Licence Council Tax* Magistrates’ Court Fines Maintenance Payments Gas/Electricity Hire Purchase/ Conditional Sale Goods

Eviction from your home Repossession of your home Imprisonment Imprisonment Imprisonment Imprisonment Supply cut off Repossession of Goods

The list above is not exhaustive & other types of debt may be a priority debt for you if you rely on the goods or services provided. For example, if you are sick or disabled & need to ensure that you can always reach help in an emergency, a debt to a phone supplier would be a priority debt since the ultimate action that could be taken against you would result in you losing an essential service (i.e. the phone could be cut off ). Although the ultimate enforcement action that can be taken against you for priority debts is severe, the creditor will have to proceed through other types of enforcement action first. Thus simply having one of these types of debts doesn’t mean that the worst will automatically happen to you. However, it does highlight why it is important to deal with any priority debts immediately, & certainly well before they get to a point where the creditor can seek this kind of enforcement action against you.

All other types of debt are considered to be non-priority debts. Non-priority debts are usually credit debts (debts where you owe money to a lender but where the debt is not secured on your home) or debts owed to a provider of non-essential goods or services. Common non-priority debts include the following (although again the list is not exhaustive):

• Credit card • Overdrafts • Store Cards • Credit Sale Agreements • Telephone • TV Subscription

• Personal loans • Charge cards • Catalogues • Water** • Internet • Debts from a previous address or supplier

Generally speaking, the worst that can happen to you if you fail to repay a non-priority debt is that the creditor can take you to County Court & get a County Court Judgement (CCJ) against you. However, if you then fail to make any payments ordered by the court, the creditor can ask the court to take further action against you. This could result in enforcement action by the court such as bailiffs trying to repossess goods from your home, an attachment of earnings order to deduct money from your wages or a charging order being placed on your home thereby putting your home at risk. Thus whilst non-priority creditors generally have less severe enforcement action open to them, it is again important to deal with them at the earliest possible point, & certainly before the courts become involved. As you can see then, there are many different types of debt that can be owed to a variety of different creditors. However, your debts can generally be classified as being either priority debts or non-priority debts &, depending on which, there are different ways that you should go about dealing with them. We will look at these different ways later in the pack. In the meantime however, the most important thing to take away from this section is the need to deal with your debts as soon as possible before your creditors start taking enforcement action against you.

* Since April 2004, full-time students have not been liable to pay Council Tax. However, part-time students are still liable to pay, as are any other members of your household who are not full-time students. ** Although water is an essential service, suppliers can no longer disconnect domestic water supplies. Debts to water suppliers are therefore considered to be non-priority debts.

The Effects of Debt: Being in debt is an undeniably awful experience that may affect you in many different ways. In addition to the practical effects that debt may have (such as the effect it may have on your credit rating), it may also affect you in ways that you might not have thought of (such as your emotional well-being or your relationship with others). Some of the most common ways that debt may affect you are listed below, however this list is not exhaustive & you may find that you are affected in other ways too:

Your Credit Rating

Whilst there is no such thing as a ‘credit blacklist’, it is true that having debts will affect your credit rating & may, consequently, affect your ability to obtain credit in the future. Undisclosed bankrupts are unable to obtain credit of more than £500 without disclosing their status to the potential creditor. However even if you have not been declared bankrupt, when you apply for credit the potential lender is likely to check your credit rating with a credit referencing company. These companies keep records of all County Court Judgements (CCJs), bankruptcies & Individual Voluntary Agreements as well as details about most credit accounts. This information is kept on your file for 6 years & will show any debts that you have, even if you are making payments towards those debts. Whilst your file should also indicate where you have paid off your debts, the mere fact of having fallen behind on a credit account could be enough for a potential lender to refuse you credit. Having fallen into financial difficulties could also result in you only being offered future credit at a higher rate of interest than is offered to others. Having said this, it is far better if your credit file shows that you are making some (even very small) payments towards your debts than paying nothing at all. Also, potential lenders in the future may see your current difficulties as just a ‘blip’ & offer you credit based on your circumstances at the time you come to apply. For more information about credit reference agencies, have a look at the ‘Credit Explained’ leaflet, copies of which are available in the SAC.

Your Bank Account

If your credit file shows that you have debts, you may find it difficult to open a new bank account that offers an overdraft, a cheque book or a cheque guarantee card. Whilst you should still be able to open a basic bank account, these usually only allow you to make cash withdrawals & have money paid in (although some may also let you have direct debits & standing orders). For more information about basic bank accounts, have a look at the ‘No bank account?’ leaflet, copies of which are available in the SAC. If you are getting into difficulties with the bank with whom you hold a Student Account, you may wish to consider opening an account elsewhere before things progress too far as you may not be able to open an account with an overdraft facility once details of your debt are recorded on your credit file. Please note however that, depending on the terms of your account, you may not be able to open another Student Account without breaching the terms of your existing account. Whilst this would not prevent you from opening a non-Student Account with an overdraft facility elsewhere, it may prevent you from finding a new account with as generous an interest-free overdraft as your existing account. For information about the Student Accounts offered by all the major high street banks & building societies, have a look at our ‘Banking Arrangements’ leaflets, copies of which can be collected from the SAC or downloaded from our webpages. If you are declared bankrupt, any bank accounts you have will be frozen for the period of your bankruptcy & you may find it difficult to open a new one. For advice in this situation, speak to either our Money Adviser or your Insolvency Practitioner/Bankruptcy Solicitor.

Your Job

Many people in debt worry about whether this will prevent them from pursuing certain careers in the future, particularly where they are hoping to embark on a career in the finance industry. The reality is that, although some unscrupulous creditors may hint that failing to pay up could have an adverse effect, there is usually no reason why being in debt now should have any effect on your future career. However, there are some instances where being in debt could have an affect on your current employment or future career. For example, borrowing money from your employer & then failing to repay it could have serious ramifications & could even ultimately result in your dismissal in some cases. Another example is that undischarged bankrupts are prevented from acting as directors of limited companies without permission from the court, whilst the

professional rules of solicitors & accountants make it virtually impossible for people who have been bankrupt to work in these professions. Also, both county & magistrates courts can impose an attachment of earnings order requiring your employer to deduct repayments towards any debts from your wages. However, whilst your employer would obviously then become aware of your situation, they could not dismiss you because of it. On the whole however, unless you are declared bankrupt & wish to pursue certain very specific professions, there is no reason why your current or any future employer even needs to know that you have been in debt. If you are worried about the effect of your debts on your job or future career, speak to our Money Adviser.

Your Housing

You may be worried that being in debt might jeopardise your housing situation. Whilst it is true that failing to make repayments towards a secured debt (i.e. one that is secured against the home that you own) or being declared bankrupt can result in you losing your home, for the majority of people in debt, there is no reason why your housing situation should be affected as long as you keep up to date with your mortgage or rent payments. An exception to this could arise where any rent arrears are included in a bankruptcy order, in which case it is not clear whether your landlord could take possession proceedings against you for those arrears. If you are in this position, contact either our Money Adviser or your Insolvency Practitioner/Bankruptcy Solicitor for further advice.

Your Emotional Well-Being

Being in debt can be very upsetting & place you under a considerable amount of stress, particularly when you are worrying about how you will cope & what might happen to you. The constant demands of creditors & threats of enforcement action can leave you feeling hopeless, disempowered & harassed & many people find that they are simply unable to cope with the pressure. It is quite common for people who are experiencing financial difficulties to stop opening letters from creditors or checking bank balances & statements but, whilst understandable, this is really just avoiding the problem rather than making it go away. Taking out more credit & going on spending sprees to try & cheer yourself up will also provide only short-term relief. The important thing to recognise is that your situation is not hopeless & that you are not powerless to change it, although you may need some help to make the necessary changes. Whilst the SAC (& other similar organisations) can provide help with the practical side of dealing with your debts, it is also important that you seek help with any emotional side effects that your situation has had on you. Speak to your GP about referring you to a counsellor, or contact the Universityâ&#x20AC;&#x2122;s Psychological & Counselling Service (PCS) on (01273) 678156. Alternatively, ask one of our advisers for a list of local & national support services who may be able to offer support.

Your Relationship with Others

Many people in debt are reluctant to tell their partner or family about their financial difficulties. However, this can place relationships under considerable strain & will be difficult to sustain. Borrowing money from family or friends can also lead to difficulties if you are then unable to repay them. Whilst you may be embarrassed about your situation, or fear the reaction of others, you should also consider that others may be more hurt by being kept in the dark & would prefer to be able to offer you their support. If you find that your situation is affecting your relationship with others, consider speaking to a counsellor about your feelings. For information about how to find a counsellor, see the section above. As you can see, having debts can affect you in many ways but it is important to remember that you are not alone in experiencing any of these difficulties & that information, advice & support about any aspect of debt or its effects is available if you need it.

General Tips for Dealing With Debt: This pack is full of useful information & advice about how to deal with your debts. However, for some very quick guidelines to sorting out your debts, have a look at the 10 tips below:-

1. 2. 3. 4.

W hatever you do don’t ignore your debts - they won’t go away so the quicker you start to deal with them the better C heck that you are getting everything that you are entitled to & whether there are any ways you could reduce your expenditure – we can help you do this Try to avoid borrowing more money to pay off what you already owe C heck whether any of your payments are covered by payment protection insurance – you may have paid for additional protection for circumstances like losing your job or being off sick

5. G et in touch with your creditors as soon as you start to experience difficulties keeping up with repayments (or as early as possible after this) – they are likely to be more understanding if you explain your situation rather than just missing your payments without warning or explanation

6. 7. 8. 9.

I dentify your priority debts (e.g. money you owe for rent/mortgage, utility bills, TV licence, etc) & deal with these first – the ultimate enforcement action open to priority debt creditors is more serious even if other creditors are kicking up more of a fuss raw up a Financial Statement listing all your income, expenditure, priority & non-priority D debts & any offers of repayment – you can send this to your creditors so that they can see your current financial circumstances I f you can, offer regular payments to all of your creditors – creditors prefer being paid even very small regular amounts rather than taking further action against you B e persistent when negotiating with creditors– don’t give up if a creditor is being difficult or unhelpful, it only takes one to agree & then the others often follow suit

10. M ake sure you keep copies of any letters or other documents that you send or receive & write down the details of any phone calls so that you can rely on these if there is any dispute about what was agreed

The 7 Steps To Dealing With Debt: Ok, so weâ&#x20AC;&#x2122;ve looked at what debt is, some of the reasons why you might be in debt & the possible effects of being in debt but what can you do about it? In the rest of this booklet we will take you through 7 important steps that should help you to deal with your debts now & stay out of debt in future:-

Step 1: Your income

How to work out what you have & whether you can increase it

Step 2: Your expenditure

How to work out what you spend & if you can reduce it

Step 3: Your available income

How to calculate how much money, if any, you have available to offer to creditors

Step 4: Your priority debts

What they are & how to deal with them

Step 5: Your available income for other creditors

How to calculate what money, if any, you have available after paying priority debts & how to draw up a financial statement

Step 6: Your non-priority debts

What they are & how to deal with them

Step 7: Staying out of debt

How to maintain payments, keep records of payment, complete reviews & avoid getting into debt again Whilst it may seem a bit daunting, each step is explained as you go through the booklet & help is always available if you need it â&#x20AC;&#x201C; just contact the SAC.

The 7 Steps To Dealing With Debt:

Step 1: Your Income If you’re going to deal with your debts, you’re going to need to get to grips with your finances as a whole. This means knowing exactly how much money you have coming in & how much you need to spend to cover your essential costs such as rent, food & travel. Only then can you work out how much money, if any, you can afford to pay towards your debts. The first step then is to work out what money you have coming in & whether there are any ways that you could increase this.

Calculating your income

Using the budget sheet in Appendix I at the back of this pack, list every source of income that you have in the 1st column. Remember to include things such as your student income, your wages from part-time work, interest earned on any savings, any money your parents give you & any benefits or tax credits you receive. Once you’ve listed all your sources of income, work out exactly how much money these sources give you. If you’re paid weekly, or monthly, this is easy to do but if you are paid less regularly (for example, once a term), things can get a bit more complicated. In the 2nd column of the budget sheet, list the total amount that you receive from each income source & the period over which it is paid. For example:SOURCE OF INCOME

TOTAL AMOUNT & PERIOD OVER WHICH PAID

Wages

£380 paid each month

Child Tax Credit

£101.15 paid every 4 weeks

Housing Benefit

£368.36 paid every 2 weeks

Child Benefit

£18.80 paid each week

Maintenance Loan

£4,625 paid over 38 weeks (the academic year)

Once you have done this, calculate your monthly income from each of these sources. We have given guidelines on how to do this in the Calculation Sheet provided in Appendix II at the back of this pack. Using these guidelines, convert each of your sources of income into a monthly amount & list this in the 3rd column of the budget sheet. Once you have done this, add all the figures up to find out what your total monthly income is & enter this figure at the bottom of the monthly income column.

Increasing your income

Lots of people struggle unnecessarily because they don’t receive all the money they’re entitled to or because their entitlement has been incorrectly calculated so the first thing you can do to try & increase your income is to check that you are actually getting everything you are entitled to & that it is being paid at the correct rate. For most students, the only statutory money (i.e. money that you are entitled to by law) is student support, & not all students are even entitled to this! However, most UK & EU undergraduate students, & some postgraduate students, will be entitled to some form of statutory student support. Have a look at our webpages (www.ussu.info/advice) or at the DIUS booklet ‘A Guide to Financial Support for Higher Education

Students’ (available to collect from the SAC or to download from www.studentfinancedirect.co.uk) for information about what support is available & whether you are entitled. If you are a UK or EU student & you have any dependants, are incapable of work due to sickness, have a disability, are aged over 60 or if you are a part-time student, you may also be entitled to some welfare benefits &/or tax credits. International students are not generally eligible to claim any form of public funding but may be able to claim an ‘urgent cases payment’ in certain circumstances. Have a look at our webpages (www.ussu. info/advice) for information about whether or not you may be entitled to claim &, if so, what you (or your partner) may be able to claim. Unfortunately, it is all too common for mistakes to occur when calculating entitlement to welfare benefits & tax credits, often resulting in quite large underpayments, or overpayments that may have to be repaid. Similarly, mistakes do sometimes occur when assessing student support claims with the result that you may be receiving less than you are actually entitled to. If you are at all concerned that you may not be getting the correct amount, ask the relevant office for a breakdown of how your entitlement has been calculated & speak to one of our advisers. As well as making sure that you’re getting everything you’re entitled to at the right rate, you may be able to increase your income in other ways. Have a look at our webpages (www.ussu.info/advice) for information about some of the additional sources that you could tap into. In the meantime, here are a few suggestions:-

Work: Take up a part-time &/or holiday job, check you’re being paid at least the National Minimum

Wage (currently £4.77 ph for 18-21 yr olds, £5.73 ph for workers aged 22 or over – Oct 08), ask for a pay rise, find a job that pays more or take on another job

Income Tax: Check that you’re not paying too much tax as a result of being in the wrong tax

bracket. Work out whether you have earned above your personal allowance (£5,435 for workers under 65 in 2008-09) &, if not, claim a rebate on form P50 . Complete form P38(S) if you only work during the vacations & expect to earn less than your personal allowance – this will mean that you are paid without tax being deducted.

Educational Trusts/Charities: Use FunderFinder (available on the SAC Information Area PC)

&/or apply on-line to the Educational Grants Advisory Service (www.egas-online.org.uk) to find out if there are any organisations offering small grants whose eligibility criteria you match.

Scholarships/Bursaries: Check on the University of Sussex’s webpages whether you are eligible for any scholarships or bursaries offered &/or look at Scholarship Search UK (www.scholarship-search. org.uk/) for information about any offered by external sources.

Access to Learning Fund (ALF): ‘Home’ students who are experiencing financial difficulties

or an unexpected crisis, or who have course-related costs not covered by other funding sources, may be eligible for a grant from the ALF. Have a look at our webpages (www.ussu.info/advice) for more information.

Alumni Hardship Fund (AHF): Students who are not eligible to apply to the ALF (including

international & most EU students) & who are experiencing an unexpected financial crisis may be eligible for a small grant or loan from the AHF. Have a look at our webpages (www.usuu.info/advice) for more information.

What if your income changes?

If your income changes throughout the year, you will need to re-calculate it for each period when it changes. This is important because you need to know exactly how much money you have available to offer as repayments towards your debts. If your income changes, the amount you can afford to repay towards your debts is also likely to change.

The 7 Steps To Dealing With Debt:

Step 2: Your Expenditure Once you have worked out your income, the next step is to work out what your expenditure is. This will involve working out what you actually spend at the moment & looking to see if there are any ways that you can reduce this.

Calculating your expenditure

Using the budget sheet provided in Appendix I, list everything that you spend money on in the 4th column. Remember to include things like toiletries, course books/equipment, cleaning products, haircuts, Christmas & birthday presents, newspapers/magazines, cigarettes, holidays, meals out & take-aways as well as your more obvious expenditure such as rent, food, utility bills & travel. Once you’ve listed all the things that you spend money on, enter how much you spend on each item per month in the 5th column of the budget sheet. Once again, refer to the Calculation Sheet provided with this pack when doing this. Whilst it is fairly easy to work out the amount that you spend on regular commitments such as your rent, it can be difficult to work out how much you spend on less regular things or on things that vary in cost &/or regularity. For items that you don’t spend money on regularly, such as haircuts & presents, you may need to work out what you normally spend in total on each item in a year & then convert this figure to a monthly amount. For example, if you normally have 2 haircuts in a year at a cost of £30 each, you spend £60 in total per year. Divided over the 12 months in a year, this works out to a monthly cost of £5. For items that you spend on infrequently &/or where the amount you spend varies, like magazines or food, it is a good idea to keep a spending diary so that you can work out your average expenditure by recording your actual expenditure on these items over a representative period of time. For information on how to keep a spending diary & how to calculate your expenditure from one, have a look at our ‘Keeping a Spending Diary’ handout (available to collect from the SAC or to download from our webpages www.ussu.info/advice) Once you have worked out your monthly expenditure on all items, add all the figures up to find out what your total monthly expenditure is & enter this figure at the bottom of the monthly expenditure column.

Reducing your expenditure

Even if you are receiving all the funding that you’re entitled to & have found ways to increase your income, the reality for most students is that you will still be living on a very limited income. If you have fallen into debt, it is also probable that you are spending more money than you have coming in. Spending more money than you have can only lead to being forced to rely on credit (overdraft facilities, credit cards, loans etc) or to a situation where you are constantly juggling your expenditure at the risk of not being able to meet a basic item such as your rent or a utility bill. Have a look at our ‘Money Management Tips’ factsheet (available to collect from the SAC or to download from our webpages at www.ussu.info/advice) for tips on how to reduce your expenditure. In the meantime, here are a few suggestions:-

NUS Card Discounts: Always carry your registration card (which includes your NUS Card) with

you & use it to get discounts on all sorts of things like books, clothes & bikes. Even if a discount isn’t advertised, one may be available if you ask. NUS Extra Cards are also available to buy from the USSU Reception in Falmer House. These cards allow you to get additional discounts in shops like HMV/

Topshop/ JJB Sports & on services like Amazon Books & Dot Mobile amongst others.

Travel: There are various discount cards available to students that could help you reduce your travel costs on the bus, train, coach or travel abroad. Have a look at our ‘Travel Discounts’ leaflet (available to collect from the SAC or to download from our webpages at www.ussu.info/advice) for more information. Alternatively, use a bike & reduce your travel costs to zero whilst also getting fit!

Food Shopping: Make use of supermarket loyalty cards & multibuy offers. Buy the supermarket’s

own brand of food rather than paying extra for brand names. Shop around for the best deal - use Tesco’s online price comparison guide (http://www.tesco.com/pricecheck/) to see which supermarket offers the cheapest food. Make a list & stick to it rather than impulse buying. Don’t shop when you’re hungry & check the reduced items shelves for food being sold cheaper because it is close to its sell-by date.

Health Costs: Fill in an HC1 form (available to collect from the SAC or your GP surgery) to apply for

help with health costs such as prescriptions, sight tests, glasses & dental treatment. If you do not qualify for free or reduced-cost help but require frequent prescriptions, buy a prepayment certificate from your pharmacy, this will reduce the cost.

Avoid common money drains: Try to avoid common money drains such as:

• • •

•

C redit/Store Cards: Usually have very high interest rates & can result in sizable monthly repayments that only serve to pay off the interest rather than the debt itself. B ank Charges: Charges apply for exceeding your agreed overdraft limit. If you think you are in danger of exceeding your limit, ask your bank for a temporary extension. M obile Phones: Contract phones are expensive & you are liable to pay for the duration of your contract. Shop around for the cheapest deal & make sure you’re on an appropriate tariff. Consider having a ‘pay-as-you-go’ mobile instead so that you can control the amount you spend. F ood: Make your own lunch & take snacks with you rather than buying food on campus. Avoid ‘ready-meals’, take-aways & expensive convenience stores.

More examples of common money drains to avoid can be found on the factsheet mentioned above.

What if your expenditure changes?

If your expenditure changes throughout the year, (for example if you move house & your rent changes), you will need to re-calculate your monthly expenditure. This is important because you need to know exactly how much money you have available to offer as repayments towards your debts. If your expenditure changes, the amount you can afford to repay towards your debts is also likely to change.

The 7 Steps To Dealing With Debt:

Step 3: Your Available Income Once you have worked out what your income & expenditure are & have done everything you can to increase your income & reduce the amount you spend, you can see what money (if any) is available to offer to your creditor(s) to repay your debt(s).

Calculating available income

To find out how much money (if any) you have available to offer to your creditor(s) towards your debt(s) you need to take away your total expenditure from your total income using the figures you have calculated as your total income & total expenditure on your budget sheet. So, for example, if your total income is £1,000 per month & your total expenditure is £960 per month you will have £40 per month available to use to repay your debts (£1,000 - £960 = £40).

What if I have no available income left after expenditure?

Have another look at ways in which you can increase your income & reduce your expenditure. More information about ways to make your budget balance can also be found in our ‘Balancing Your Budget’ handout (available to collect from the SAC or to download from our webpages at www.ussu.info/advice). If you still have no available income, you will need to seriously consider whether all the things that you spend money on are actually essential or whether you can manage without for the time being (at least until your situation improves &/or you have repaid your debts). Remember that your creditors are also likely to take a different view about what is actually essential expenditure & will argue, for example, that you should not be spending any money on going out when you owe money. You should therefore be able & prepared to justify everything that you are spending money on. If, even after reconsidering whether all of your expenditure is actually essential &/or justifiable, you still have no available income to offer to your creditors then please seek advice from our Money Adviser. Depending on what kind of debt(s) you have (i.e. whether they are priority or non-priority debts) & whether your situation is likely to change in the near future (i.e. whether or not your financial situation is likely to improve), it may be possible to negotiate for either a total or partial write-off or for a moratorium or token repayments. More details about these options are given later in this pack.

What if your available income changes?

If you have an arrangement in place with your creditor(s) to repay your debt(s), they will usually request a review of your circumstances every now & again (typically every 6 months). However, if you don’t have an arrangement in place, or if there is a substantial change in your available income, you will need to contact your creditors to inform them of the change in your circumstances & to renegotiate any offers of repayment.

The 7 Steps To Dealing With Debt:

Step 4: Your Priority Debts As explained earlier in the pack, some debts are more important than others due to the severity of the enforcement action that a creditor could ultimately take against you. These debts are known as your priority debts. Common priority debts & the ultimate enforcement action that could be taken against you include the following: Priority Debt Ultimate Enforcement Action that could be taken against you Rent Arrears Secured Loan TV Licence Council Tax* Magistrate’s Court Fines Maintenance Payments Gas/Electricity Hire Purchase/ Conditional Sale Goods

Eviction from your home Repossession of your home Imprisonment Imprisonment Imprisonment Imprisonment Supply cut off Repossession of Goods

Since the ultimate enforcement action open to the creditor, & consequently the possible outcome for you (the debtor), is more extreme for these debts it is important to use any available income you have to make agreements to pay these debts first. Although the ultimate enforcement action that can be taken against you for priority debts is severe, the creditor will usually have to proceed through other types of enforcement action first. Creditors can take action on some priority debts without going to court (for e.g. gas & electricity suppliers can disconnect your supply without having to go to court) but most creditors will have to take court action before they can proceed with the ultimate enforcement action listed in the table above. In either case, you will always be given plenty of warning but it is vital that you don’t ignore these warnings. If you act quickly it is more likely that you will be able to reach an agreement with your creditor(s) & thus prevent them from taking action against you.

Trying to reduce your priority debt(s)

It is always worth looking to see if there are any ways that you can reduce the amount that you owe to priority creditors. Have a look below for some ideas on ways that you may be able to do this. 1. C hecking whether you are liable: Before repaying any debt you should first check whether or not you are legally liable to pay it. Examples of when you may not be liable to pay all or some of a debt could include gas/electricity bills where the amount covers a period when you weren’t living in the property, Council Tax bills for periods when you were a full-time student & hire purchase/conditional sale agreements that were not correctly executed (i.e. where the correct procedures where not followed when you made the agreement). 2. C laiming any payment protection insurance (PPI): If you have secured loans or hire purchase/ conditional sale agreements you may have bought payment protection insurance (PPI) to cover repayments in case of sickness or incapacity, unemployment, accident or death. If your situation is covered by your policy, make a claim. If your claim is refused it may be possible to challenge this or to argue that the debt is unenforceable because the policy was missold.

3. A sking for a remittance or reduced payments: Some creditors (for e.g. Magistrates Courts in the case of fines) have the power to remit all or part of a debt (i.e. to wipe or reduce the debt) in cases of hardship. Other creditors may agree to reduce the total amount owing (or the interest rate being charged) in some very exceptional circumstances. 4. R aising some capital: If you can raise a lump sum you should consider doing so to pay off some or all of your priority debts. You could for e.g. consider selling any shares, or property such as a house (if you have somewhere else you can live) or non-essential possessions. You could also apply to the Access to Learning Fund, Alumni Hardship Fund or any of the external charitable organisations that may be able to offer help. Some creditors also have specific trust funds (for e.g. the British Gas Energy Trust, the EDF Energy Trust or the Southern Water Trust Fund) that may be able to offer you a grant to pay off arrears owed to a supplier associated with that scheme &/or to help with other financial commitments. 5. R efinancing & debt consolidation: There are some circumstances where it may be advisable to take out a loan or other credit agreement to repay a priority debt or debts. This is not normally recommended however & should only be considered if it will offer a realistic solution to a priority debt, where your monthly outgoings will be reduced as a result & where you can keep up with repayments towards this new debt. For information or advice about any of the above, please speak to our Money Adviser.

Tips on dealing with priority debts

Due to their serious nature, priority debts cannot be ignored & must be dealt with quickly if you are to avoid some of the more severe enforcement options open to the creditors. However daunting negotiating with such creditors may be try to stay calm & remember that dealing with priority creditors is often just a matter of negotiation over what you are able to offer & what they are prepared to accept. Have a look below for some tips on how to negotiate with priority creditors. 1. C ontact the creditor(s): Make contact with the creditor immediately – the debt won’t go away if you ignore it but it is more likely that the creditor will start action against you if you don’t contact them. E ven if you don’t have any available income at the moment to offer, you should contact the creditor immediately. Explain your circumstances & ask the creditor if they will suspend any action & freeze any interest or charges for an agreed period of time. This will allow you more time to find some money to offer &/or to seek advice from an advice agency on what your options are. Some creditors will allow you to organise your payments around dates when you are likely to receive money (for e.g. gas & electricity suppliers will usually agree to suspend action until the next instalment of any student income as long as you agree to repay at least some of the debt with that income). Creditors will also normally agree not to take any action whilst you seek advice from an advice agency as long as you agree that either you or the agency will contact them again soon (usually within 14 days) with payment proposals. 2. K eep up with ongoing payments: If possible, try to keep up with any ongoing payments due to the creditor so that the debt does not increase further. You should also try to make at least some (even small) payments towards the debt(s) if at all possible, even if these payments are less than the creditor is demanding. This is especially important if you are an Assured Shorthold Tenant & have rent arrears of 2 months (8 weeks if you pay weekly) or more since if your landlord takes you to court for these arrears the court is unable to allow you to make an arrangement to pay the arrears & has no choice but to make a Possession Order. 3. D ecide on your strategy: Decide for each debt whether it is better to try to pay it off completely as soon as possible or whether to try to pay it over a long period. Debts that have interest or charges accruing (& where the creditor will not agree to freeze these) will continue to increase unless you can pay them off quickly & you may end up only ever repaying the interest/charges rather than the actual debt itself. It is likely to be better if you can repay these debts in full as soon as possible. For other debts, it may be possible to repay small amounts over a longer period of time. The debt will be repaid in full eventually but you will not have to make such large payments in the meantime. You will need to keep in mind the creditors’ collection policies when deciding whether to try to negotiate for payment over a longer period. Some creditors may be happy to agree to this (for e.g. landlords may

be happy for you to make small payments over a long period towards any rent arrears as long as you keep up with your ongoing rent payments) but others may not (for e.g. Magistrates’ Courts may take alternative enforcement action such as using bailiffs if you do not keep up with court-ordered payments & have not successfully applied to have the order varied or for further time to pay). Some creditors may also have accounting periods (a financial year for e.g. or the period between quarterly bills) & will expect payment of any arrears within these periods. Remember however that, whatever their collection policy, it is still always worth trying to negotiate with a creditor & don’t be afraid to ask to speak to someone with more authority if the person you are dealing with says they can’t agree to something because it’s not in their policy. 4. M ake the creditor aware of your circumstances: Unless you tell them, creditors have no idea about your individual circumstances. They don’t know why you have fallen into debt or why you can’t just repay the debt in full immediately, & most importantly, they do not know whether you are merely unwilling to pay the debt rather than being unable to pay. Creditors will usually be more sympathetic to your position if you explain your situation & give information about any extenuating circumstances such as ill-health, childcare responsibilities or loss of income. They are also more likely to agree to a lower temporary payment proposal if you can demonstrate that your circumstances are likely to improve at some point in the future (for e.g. if you are likely to take up full-time paid employment upon completion of your course), at which point you could increase your repayments. If your situation is unlikely to improve (for e.g. if you have become permanently disabled & don’t anticipate being able to work again), they are also likely to be more open to the idea of wiping or reducing the debt once they are fully aware of your circumstances. 5. M ake realistic offers: Whilst it is important to come to some agreement with priority creditors about how you will repay the debt, it is equally important that you only offer to pay what you can realistically afford. There’s no point promising to pay £50 a month towards a debt when you only have £10 available since you are unlikely to be able to stick to that agreement. Creditors will be less sympathetic & more likely to take further enforcement action in future if you fail to keep up with an agreement that you are making now. Keep the available income figure that you identified in Step 3 in mind when negotiating & do not agree to anything above this amount unless you are absolutely certain that you can find a way to finance this. Remember also that, where possible, you will want to ensure you have at least a small amount still available to offer to any non-priority creditors once you have reached agreements with all your priority creditors. Before accepting an offer, a creditor may ask you to send them a financial statement. This is a formalised & extended version of the budget sheet that you completed in Steps 1 & 2. If a creditor requests a financial statement, follow the steps on how to draw one up given in the next step (Step 5). 6. U nderstand & stick to what’s been agreed: Due to the more urgent nature of priority debts & the importance of dealing with them quickly, negotiations about repayment will often occur over the phone rather than in writing. As a result it can sometimes be unclear what all the terms of an agreement are. There may also be some misunderstanding about what was actually agreed. For these reasons, it is advisable to make a note of the date & the name of the person you spoke to & to confirm & make notes about exactly what was agreed. Make sure in particular that you are absolutely clear about whom to pay, when to pay & how much to pay. Ask the creditor to confirm the agreement in writing &/or write to the creditor yourself confirming your understanding of the agreement. Once you have an agreement in place it is absolutely vital that you stick to that agreement if you are to avoid the possibility of the creditor taking further action against you. If you are at all concerned that you cannot stick to the arrangement, contact the creditor again to renegotiate &/or seek advice from our Money Adviser. Following the tips given above, you should hopefully be able to reach an agreement with your priority creditor(s). As long as you stick to the terms of what has been agreed, it is unlikely that your creditor(s) will take any further enforcement action against you & the debt(s) should eventually be repaid. IMPORTANT NOTE: If you have any priority debts but no available income to offer OR if you have been unable to come to an agreement with your creditor(s) about repayment, please speak to our Money Adviser.

The 7 Steps To Dealing With Debt:

Step 5: Your Available Income for Other Creditors Once you have reached an agreement with any priority creditors about how you will repay your priority debts, you can then work out how much money (if any) is available to offer to other creditors.

Calculating available income for other creditors

To find out how much money (if any) you have available to offer to other creditor(s) towards any remaining debt(s) you need to take away the total monthly amount that you have agreed to pay to priority creditors from the available income figure that you identified in Step 3. So, for example, if your available income was £40 per month & your total repayments to priority creditors are £30 per month then you will have £10 per month available to use to repay any remaining debts (£40 - £30 = £10).

What if I have no available income left after expenditure?

Have another look at ways in which you can increase your income & reduce your expenditure. More information about ways to make your budget balance can be found in our ‘Balancing Your Budget’ handout (available to collect from the SAC or to download from our webpages at www.ussu.info/advice). If you still have no available income, you will need to seriously consider whether all the things that you spend money on are actually essential or whether you can manage without for the time being (at least until your situation improves &/or you have repaid your debts). Remember that your creditors are also likely to take a different view about what is actually essential expenditure & will argue, for example, that you should not be spending any money on going out when you owe money. You should therefore be able & prepared to justify everything that you are spending money on. If, even after reconsidering whether all of your expenditure is actually essential &/or justifiable, you still have no available income to offer to your creditors then please seek advice from our Money Adviser. Depending on your circumstances & whether your situation is likely to change in the near future (i.e. whether or not your financial situation is likely to improve), it may be possible to negotiate for either a total or partial write-off or for a moratorium or token repayments. More details about these options are given in the next step (Step 6) of this pack.

Drawing up a financial statement

Once you have worked out what, if any, income you have available to offer to your non-priority creditors you are ready to produce a financial statement. A financial statement is really just a formalised & extended version of the budget sheet that you completed in Steps 1 & 2 but it is a vital document because it summarises information in a standard format that will be recognised by creditors & can be used to justify whatever payment proposals you are suggesting. We have included a template financial statement in Appendix III at the back of this pack for you to use as a guide when producing your own. You will see that it is clearly divided into 6 sections:

•

(A) Income - details of your income & the monthly total

•

• • • •

( B) Expenditure - details of your expenditure & the monthly total. You will note that some items of expenditure are combined on the financial statement rather than being listed separately as on your budget sheet. This is primarily in order to simplify the document – creditors don’t need to know the specific amounts that you spend on food, toiletries, household good, clothes & shoes for example, these can instead be listed under the general heading of housekeeping & clothing. It might also be to your advantage to include items such as cigarettes under a general heading rather than listing them separately. Remember however that you must be able to justify any expenditure as being reasonable, creditors can & do query an item of expenditure if they feel that it is too high. (C) Available income after expenditure - the amount left after subtracting your total monthly expenditure from your total monthly income ( D) Priority debts & repayments - details of all your priority debts & any repayment offers or repayments (E) Available income after priority debt repayments - the amount left after subtracting the total amount of priority debt repayments from your available income after expenditure. This figure will form the basis of any repayments offered to your non-priority creditors. ( F) Non-priority debts & offers of repayment - details of all your non-priority debts & any offers of repayment. Please note that information about how to calculate your offers of repayment to nonpriority creditors is given in the next step (Step 6) – for now just leave this bit blank.

It’s important to ensure that your financial statement is accurate (double check your figures!) & to attach photocopies of documents confirming your income, your priority debts & non-priority debts. These could include any of the following (please note that this is not an exhaustive list):

• •

I ncome - Financial Notification Letter showing student income, benefit &/or tax credit award letters, payslips etc D ebts - Copes of any agreements, Court papers, recent letters from creditors etc

What if your available income changes?

You will need to produce a new financial statement that has been updated to reflect these changes & any change in your repayment offers that arise as a result. If you have an arrangement in place with your creditor(s) to repay your debt(s), they will usually request a review of your circumstances every now & again (typically every 6 months). However, if you don’t have an arrangement in place, or if there is a substantial change in your available income, you will need to contact your creditors to inform them of the change in your circumstances & to renegotiate any offers of repayment.

The 7 Steps To Dealing With Debt:

Step 6: Your Non-Priority Debts Once you have drawn up your financial statement & have worked out what money (if any) you have left after making any repayments towards your priority debts, you are ready to start negotiating with your non-priority creditors. Remember, as explained earlier in this pack, non-priority debts are debts where the enforcement action open to the creditor does not generally lead to you losing your home, your liberty or an essential service. Nonpriority debts are usually credit debts (debts where you owe money to a lender but where the debt is not secured on your home) or debts owed to a provider of non-essential goods or services & commonly include the following (although this list is not exhaustive): • • • • • •

Credit card Overdrafts Store Cards Credit Sale Agreements Telephone TV Subscription

• • • • • •

Personal loans Charge cards Catalogues Water* Internet Debts from a previous address or supplier

* Although water is an essential service, suppliers can no longer disconnect domestic water supplies. Debts to water suppliers are therefore considered to be non-priority debts.

Whilst generally speaking the worst that can happen to you if you fail to repay a non-priority debt is that the creditor can take you to County Court & get a County Court Judgement (CCJ) against you, more severe enforcement action can follow if you then fail to make any payments ordered by the court & the creditor asks the court to take further action against you. This could result in enforcement action by the court such as bailiffs trying to repossess goods from your home, an attachment of earnings order to deduct money from your wages or a charging order being placed on your home thereby putting your home at risk. Thus whilst non-priority creditors generally have less severe enforcement action open to them, it is still important to deal with them at the earliest possible point, & certainly before the courts become involved.

Trying to reduce your non-priority debt(s)

As with any priority debts, it is always worth looking to see if there are any ways that you can reduce the amount that you owe to non-priority creditors. Have a look at the information given in Step 4 for some ideas on ways that you may be able to do this, in particular whether or not the creditor followed the correct procedures when you entered into a credit agreement (incorrectly executed agreements are not enforceable by the Courts). For more information about disputing your liability, or any other ways of trying to reduce your non-priority debts, please speak to our Money Adviser.

Options for dealing with non-priority debts

If you are unable to keep up with your contractual repayments towards your non-priority debts then you need to decide on a strategy for dealing with these debts rather than simply not making any payments. Depending on your circumstances, there are a whole range of options open to you & you will need to carefully consider both the advantages & disadvantages of each before deciding which is the most appropriate for you. Have a look below for a list of the options that are available:

If you have some money available to offer as repayment: 1. Offer repayments based on an equitable distribution calculation i.e. offer proportional repayments to your creditors based on a pro rata calculation of your available income. This is a method of distributing any available income that you have fairly amongst all your nonpriority creditors based on the amount that you owe to each. An information sheet explaining how to work out pro rata offers on this basis is included in Appendix IV at the back of this pack Advantages: Offers an accepted basis for negotiating lower payments that creditors are more likely to agree to Disadvantages: Debts may increase &/or take longer to repay unless creditors also agree to an interest freeze (see below) 2. Request that any interest/charges be frozen i.e. ask creditors to stop any interest & charges that are accruing on your account(s) Advantages: Prevents debts from increasing whilst you are making reduced payments meaning all payments will actually reduce the debt rather than just paying the interest Disadvantages: Creditors are often reluctant to grant a freeze on interest or other charges although they will consider it if regular payments have been agreed 3. Set up a Debt Management Plan (DMP) i.e. make a single payment each month to a 3rd party who will then divide this payment up & distribute it between your creditors for you. The 3rd party will also try to negotiate for a freeze on all interest Advantages: You only need to make 1 payment each month & will not have to negotiate directly with your creditors. Organisations such as National Debtline (www.nationaldebtline.co.uk/), the Consumer Credit Counselling Service (www.cccs.co.uk/) & Payplan (www.payplan.com/index.php) will act as the 3rd party free of charge Disadvantages: DMPs are not legally binding & creditors don’t have to agree or stick to the arrangement & can still pursue other enforcement action at any time. Creditors may only agree to freeze interest for a limited period, or not at all NB Watch out for & avoid Debt Management Companies who charge for this service 4. Enter into an Individual Voluntary Arrangement (IVA) This is a legally binding formal agreement between you & your creditors to repay all or part of the money owed at an agreed rate over a fixed period (usually not more than 5 years). It must be set up by an Insolvency Practitioner & agreed by the court. It is usually used as a way of avoiding bankruptcy Advantages: An IVA can be formed even if some creditors are unwilling to agree (only 75% need approve) & once an IVA is in place, all enforcement action will stop & there should be no further need for contact with the creditor. You are less likely to lose your home or business than in bankruptcy, it also avoids the stigma associated with bankruptcy. Most debts are cleared once the IVA ends (not some priority debts though). Disadvantages: There are high costs involved (typically up to £3,000) in using an Insolvency Practitioner & no help with these costs is available. You will usually be required to make fairly high monthly payments (typically £100-£200 pm). Your home & business could still be at risk. An IVA will be recorded on the Individual Insolvency Register & on your credit file. FOR INFORMATION: Debt Relief Orders (DROs) were introduced as a new scheme under the Tribunals, Courts & Enforcement Act 2007 to offer a cheaper option to debtors than IVAs (see above) & Administration Orders (see below). You may qualify for a DRO if you owe under £15,000 in total, have £50 or less available income for creditors each month & less than £300 in assets. DROs are likely to run from April 2009. The rules on IVAs are also likely to change at around about the same time – for more information, speak to our Money Adviser. 5. Apply for an Administration Order This is a county court order that results in all your debts being treated together (i.e. your debts will be consolidated). You will be required to make 1 monthly payment to the court, which will then be distributed amongst your creditors. To apply for an administration order, you must have unsecured

debts of no more than £5,000 & have at least one county (or High) court judgement already made against you. Advantages: Once an administration order is in place, interest will be frozen, all enforcement action will stop & there should be no further need for contact with creditors. You only have to make 1 payment each month. Disadvantages: You can only apply if you already have a CCJ (or HCJ) & if your total debts are less than £5,000. You will have to pay court administration charges. If a creditor objects to being included in an administration order, it is up to the court to decide 6. Apply for a Time Order A time order is granted by the county court & sets new terms for an agreement if the court believes that the original terms should be altered because, for e.g., of a temporary change in your circumstances. It can only be granted on debts that are regulated by the Consumer Credit Act 1974. Advantages: The agreement of the creditor is not required &, once the order is made, the creditor can take no further enforcement action as long as you keep up with payments. It can reduce interest rates & set payments at an affordable level. Any possession order on your home can be suspended on the terms of the time order. Disadvantages: They are difficult to get & you will have to persuade the court why they should grant one. The creditor’s court costs before the order is made may be added to your debt 7. Debt Consolidation/Refinancing i.e. borrow money with which to repay all your other debts so that only one debt then remains, which you then repay monthly. The source from which you borrow money could include commercial loans from a bank or finance house (both secured & unsecured), from family/friends or from a Credit Union Advantages: You will only have 1 payment to make each month Disadvantages: Commercial loans usually have very high interest rates &, for secured loans, your home is at risk if you don’t keep up with repayments. Whilst interest rates are likely to be far less if you borrow from family/friends, any failure to repay could result in a breakdown in the relationship. Although Credit Unions offer low interest loans the maximum loan cannot usually exceed £5,000 above the amount you have saved with the union NB Consolidation/refinancing are not normally recommended & should only be considered if it will offer a realistic solution, where your monthly outgoings will be reduced as a result & where you can keep up with repayments towards this new debt 8. Request a partial write-off/time limited repayment plan i.e. ask creditors to agree to either write off some of the debt (with you usually paying the balance remaining in one lump sum), or to accept reduced payments for a limited period of time with any debt remaining after that time being written off Advantages: The overall amount owed is reduced &, once the agreed amount is repaid, the debt should be shown as being satisfied. The creditor may agree if they can offset the loss against tax Disadvantages: Not all creditors may agree, leading to problems where creditors are not treated equally. Creditors may report the partial write-off to credit referencing agencies &, even though the debt should show as being satisfied, this may cause problems with obtaining future credit

If you have no money available to offer but do have assets or capital: 1. Offer a lump sum in full & final settlement i.e. sell off your assets or use your capital to offer a lump sum, which the creditor then agrees to accept in full & final settlement even though it is less than the total amount owed Advantages: Creditors may accept a single sum in preference to administering many small amounts over a long period even if the lump sum is for less than the total debt. Once accepted, the debt should be shown as being satisfied. Disadvantages: Once the creditor knows you have access to a lump sum, they may take court action to try to recover all of the debt. Creditors may still report the debt to credit referencing agencies &,

even though the debt should show as being satisfied, this may cause problems with obtaining future credit. 2. Sell your home i.e. use money raised from the sale of your home to repay debts. You should only consider this if you have somewhere else you can live & if any of your creditors are able & intend to force a sale anyhow Advantages: Selling your house yourself, rather than waiting for a sale to be forced by a creditor with a secured debt, will usually result in you getting a higher price. Disadvantages: Your local authority may consider you to be ‘intentionally homeless’, in which case they have no duty to rehouse you. 3. Agree to a Voluntary Charge on your home i.e. turn an unsecured debt into a secured one by offering to (or agreeing to a request to) secure a voluntary charge on your house. This would then enable the creditor to recover the debt from the proceeds of the sale of your house Advantages: A creditor is likely to agree to a voluntary charge & is less likely to pursue other enforcement action. Creditors may also agree to freeze interest once a charge has been secured Disadvantages: You are placing your home at risk for what was an unsecured debt. The creditor could apply to the court for an order for your home’s sale before you intended to sell it. The creditor may still insist on payments even with the charge in place. NB This is not a recommended option in almost any circumstances 4. Apply for bankruptcy i.e. a court procedure whereby a trustee (either the Official Receiver or an Insolvency Practitioner) is appointed to take over the handling of your finances for the benefit of your creditors. This can be done at either your own request or at the request of a creditor Advantages: Once you are bankrupt, creditors must deal with the trustee so there should be no need for further contact. Once you have been discharged (usually after 1 year), you can make a fresh start. After discharge, most debts are written off & can no longer be pursued. If a creditor files for bankruptcy, they will have to pay the costs of doing so. Disadvantages: If you file for bankruptcy yourself, you will have to pay the costs (currently a £150 fee plus £325 deposit) & no help with these costs is available. Other (sometimes very high) costs may also be incurred such as the cost of using an Insolvency Practitioner or of getting any assets valued. During bankruptcy, you will lose all control of your finances & are likely to lose any major assets such as your home &/or business. You will also be barred from holding certain jobs or public offices & you will not be able to obtain credit of more than £500 without disclosing your status. Details of the bankruptcy will be recorded on the Individual Insolvency Register & on your credit file & will continue to affect your credit rating even after discharge. Your bankruptcy will also be published in the London Gazette & local papers. Even after discharge, not all debts are written off (for e.g. student loans, secured loans, fines & maintenance will all remain).

If you have little or no income, assets or capital but your situation is likely to improve: 1. Offer token payments i.e. offer to make token nominal payments (usually £1 per month) towards the debt until your situation improves Advantages: The creditor will see that you are at least making regular payments & may not take further action. Creditors may agree to freeze interest once token payments start Disadvantages: It is using up money that you don’t really have available. The debt will never be repaid whilst you are only making token payments 2. Request a moratorium on payments i.e. negotiate with creditors for a limited period of no payment &/or no enforcement action. You should also request an interest freeze for the duration of the moratorium. Advantages: It takes the pressure off of you for an agreed limited period.

Disadvantages: Creditors are only likely to agree where there is a realistic possibility of your circumstances improving. Creditors may not agree to freeze interest, in which case the debt will increase even though no action is being taken. 3. Request an interest freeze See earlier section for information about requesting an interest freeze. Advantages: Prevents debts from increasing whilst you are unable to make payments. Disadvantages: Creditors are likely to be reluctant to agree. 4. Seek a Composition Order i.e. a type of administration order (see earlier section for information) where the judge orders that you have to pay only a proportion of your debts. A composition order will normally only be considered where the debts cannot be cleared in a ‘reasonable time’ (usually about 3 years). Advantages: The same advantages apply as for an administration order plus you only have to repay a proportion of what you owe Disadvantages: The same disadvantages as for administration orders apply. However, whilst creditors may agree to an administration order, they are less likely to agree to a composition order due to the reduced amount that they will receive in repayment 5. Apply for a Time Order See earlier section for information about Time Orders.

If you have little or no income, assets or capital & your situation is unlikely to improve: 1. Ask for the debt to be written off i.e. ask the creditor to agree not to seek any further payments & to remove the account from its records. Advantages: You will no longer have to repay the debt. Once a write-off has been agreed, the debt should be shown as being satisfied or settled. The creditor may agree to a write-off if they can offset the loss against tax. Disadvantages: Creditors will only consider this where you have exceptional circumstances, no available income & your circumstances are unlikely to ever improve or where you could make token payments but where it is uneconomical for them to collect the payments & you are unlikely to pay off the whole debt in a reasonable period of time. Unless the creditor formally confirms the write-off in writing, you may be left uncertain as to whether or not they may revive the debt at a later point. Once a write-off has been agreed, & even though the debt should show as being satisfied, you may encounter problems if you try to obtain future credit. 2. Apply for bankruptcy See earlier section for information about bankruptcy. As you can see there are a whole host of options available for dealing with non-priority debts but remember that it is important to decide upon the appropriate strategy according to your own individual circumstances. For the vast majority of students who find themselves in debt however the most common strategies for dealing with non-priority debts are as follows:

•

Those with some available income (even fairly small amounts) – Offering repayments based on an equitable distribution calculation whilst also requesting a freeze on all interest/charges

•

Those with no (or barely any) available income – Requesting a moratorium or offering token repayments (usually £1 per month) whilst also requesting a freeze on all interest/charges

If you are unsure about which strategy is most appropriate for you &/or would like to discuss any of these

options more fully, please speak to our Money Adviser.

Tips when dealing with non-priority creditors

Once you have decided upon your strategy, the next step is to start negotiating with your creditors. Negotiating with your creditors is always going to be a daunting experience, particularly if you have been on the receiving end of numerous unpleasant letters & phonecalls demanding money for long periods of time. Try to stay calm however & remember that dealing with creditors is often just a matter of negotiation over what you are able to offer & what they are prepared to accept. Remember also that if you are able to successfully negotiate an agreement, the pressure that you’ve been under will ease as you start to deal with your debts rather than just living with them. Have a look below for some tips on how to negotiate with nonpriority creditors. 1. Get in touch with your creditor(s): Even if you have not yet drawn up a financial statement & decided upon the best strategy, it’s important to keep in touch with your creditors – the debt won’t go away if you ignore it but it is more likely that the creditor will start action against you if you don’t contact them. It is advisable to keep all contact between yourself & your creditors in writing if at all possible. If you do find yourself speaking on the telephone however, remember to make a note of the date & the name of the person you spoke to & to confirm & make notes about exactly what was agreed. You’ll find some sample letters in Appendix V at the back of this pack that you can use as a guide when contacting your creditors. Your initial letter is likely to include an explanation of the fact that you are experiencing financial difficulties & a request that they suspend any action & freeze any interest or charges for an agreed period of time on the understanding that you will contact them again shortly with a financial statement & your payment proposals. Creditors will also normally agree not to take any action whilst you seek advice from an advice agency as long as you agree that either you or the agency will contact them again soon (usually within 14 days). 2. Make the creditor aware of your circumstances: Unless you tell them, creditors have no idea about your individual circumstances. They don’t know why you have fallen into debt or why you can’t just repay the debt in full immediately, & most importantly, they do not know whether you are merely unwilling to pay the debt rather than being unable to pay. Creditors will usually be more sympathetic to your position if you explain your situation & give information about any extenuating circumstances such as ill-health, childcare responsibilities or loss of income. They are also more likely to agree to a lower temporary payment proposal if you can demonstrate that your circumstances are likely to improve at some point in the future (for e.g. if you are likely to take up full-time paid employment upon completion of your course), at which point you could increase your repayments. If your situation is unlikely to improve (for e.g. if you have become permanently disabled & don’t anticipate being able to work again), they are also likely to be more open to the idea of wiping or reducing the debt once they are fully aware of your circumstances. Write a letter to accompany your financial statement giving any relevant information about your circumstances & explaining why the proposal you are making is the most appropriate. 3. Make realistic offers: Whilst it is important to come to some agreement with your creditors about how you will repay the debt, it is equally important that you only offer to pay what you can realistically afford. There’s no point promising to pay £50 a month towards a debt when you only have £10 available since you are unlikely to be able to stick to that agreement. Creditors will be less sympathetic & more likely to take further enforcement action in future if you fail to keep up with an agreement that you are making now. Keep the amount that you have identified that you have available to offer in mind when negotiating & do not agree to anything above this amount unless you are absolutely certain that you can find a way to finance this. 4. Stick to your strategy & treat all non-priority creditors consistently: If you have carefully

reviewed your finances, drawn up an accurate financial statement & chosen the best strategy based on your individual circumstances then it is likely that this strategy offers the most realistic prospect for you to deal with your debts. Although one creditor may want you to pay more than you have offered there is no point agreeing to an arrangement that you know you cannot stick to. Likewise, if you agree to pay one creditor more at the expense of another creditor, you are likely to find that the other creditor is less likely to accept your offer. Non-priority creditors are all of equal status (regardless of who shouts the loudest!) & should be treated as such. If a creditor initially refuses your offer, don’t be afraid to ask them to reconsider &/or to approach someone with more authority. Remember also that once one creditor has accepted an offer, others are more likely to agree. 5. Understand & stick to what’s been agreed: Once an agreement is in place make sure that you are absolutely clear about whom to pay, when to pay & how much to pay. Ask the creditor to confirm all the details of the agreement in writing &/or write to the creditor yourself confirming your understanding of the agreement. Once you have an agreement in place it is absolutely vital that you stick to that agreement if you are to avoid the possibility of the creditor taking further action against you. If you are at all concerned that you cannot stick to the arrangement, contact the creditor again to renegotiate &/or seek advice from our Money Adviser. Following the tips given above, you should hopefully be able to reach an agreement with your non-priority creditor(s). As long as you stick to the terms of what has been agreed, it is unlikely that your creditor(s) will take any further enforcement action against you & the debt(s) should eventually be repaid.

If your creditors won’t accept your proposals

Sometimes one or more creditors may refuse to accept a proposal even when you have provided a financial statement & written a letter explaining your circumstances to accompany this. If this happens, don’t be afraid to ask them to reconsider &/or to approach someone with more authority. Although a creditor may demand more than you have offered you should not just cave in - if your original offer was based on an accurate summary of your financial circumstances then you cannot afford to pay more than you have already offered & doing so is likely to result in you failing to keep up with repayments. Try pointing this out to them & explaining again that your offer is all that you can currently afford. Likewise if a creditor refuses to freeze the interest, ask them to reconsider & point out that refusing to will merely result in you getting into more debt. It is also a good idea to start paying them any amount that you have offered whilst you continue negotiating, this may help to persuade them of your intention to stick to the proposal. If other creditors have accepted your proposals, it’s also worth pointing this out to any that are refusing since often others will follow suit once at least one has accepted. If your creditors still won’t agree to your proposals then they do of course have the option to take county court action against you. However daunting this may seem it is worth knowing that the overriding objective of the court is to ensure that cases are dealt with justly & that all parties are expected to act reasonably & to avoid unnecessary court proceedings. If the matter goes to court, the judge will decide the rate of repayment & will do so based on what s/he determines you can afford. If the offer you made to the creditor is reasonable therefore it is unlikely that the judge would order you to pay more than you have already offered. It is often worth pointing this out to any creditor that is threatening court action when asking them to reconsider again your proposal. Furthermore, the court could impose a penalty on the them (or even order a reduction in the costs awarded to them) if it is seen that they did not make sufficient efforts to try to resolve the matter before resorting to court action – it is therefore in their own interests to ensure that they consider any reasonable offer made to them. If a creditor still won’t accept your proposals, come & speak to our Money Adviser for advice on your options & what approach you can now take.

The 7 Steps To Dealing With Debt:

Step 7: Staying Out Of Debt By following the previous 6 steps you should hopefully have been able to negotiate & come to an agreement with all of your creditors. Your work doesn’t end there however & if you want to avoid going back to the situation you were in when you first picked up this pack, & to gradually work towards becoming debt-free altogether, you will need to ensure that you stick to all of your agreements, complete regular reviews of your finances & avoid getting into any new debt.

Making & maintaining payments

If you have made an agreement with a creditor to make a regular payment it is vital that you stick to it otherwise the creditor may renege on the agreement & decide to take enforcement action against you. This means paying the exact amount that you’ve agreed on the date specified. There are numerous ways that a creditor might allow you to make payments such as by paying-in book, by PayPoint or PayZone, by cheque or postal order or by standing order or direct debit. Make sure that you know which method(s) of payment a creditor will accept & that you have made arrangements to pay in good time. If at all possible, try to set up direct debits so that you don’t forget to make any payments but remember to ensure that you have sufficient funds in your bank account to honour all payments otherwise you will incur bank charges. Keep careful records of all payments that you have made in case you ever need to dispute the amount the creditor says you still owe & periodically check with the creditor what the outstanding balance is so that you can compare this with your records.

Changes of circumstance & reviews

If your circumstances change you may need to produce a new financial statement that has been updated to reflect these changes & any change in your repayment offers that arise as a result. If you have an arrangement in place with your creditor(s) to repay your debt(s), they will usually request a review of your circumstances every now & again (typically every 6 months). However, if you don’t have an arrangement in place, or if there is a substantial change in your available income, you will need to contact your creditors to inform them of the change in your circumstances & to renegotiate any offers of repayment. Even if your circumstances stay the same & no-one has requested a review, it is a good idea to regularly review your finances anyhow to monitor how easy you are finding it to stick to your budget, to see if your priorities have changed & whether there are any changes you could make that would help you to better manage your finances. Have a look at the ‘Money Management Tips’ & ‘Balancing Your Budget’ factsheets (available to collect from the SAC or to download from www.ussu.info/advice) for information & advice about ways to do this.

Staying out of debt

As long as you stick to any agreed payments you have made you should be gradually, albeit perhaps slowly, working towards repaying your debts in full. Once you have finished your course at Sussex you will be far better placed to secure well-paid employment & are likely to be able to increase any remaining repayments (& thus repay any outstanding amounts quicker). Whilst the majority of students cannot avoid getting into additional debt as a result of the current system of student support available to full-time undergraduates, the best advice really is to try to avoid taking out any unnecessary debt. Don’t be tempted by credit cards, store cards & personal loans. Be disciplined & stick to your budget. If there’s something extra you really want or need, try to save up for it rather than paying for it on credit. Plan in advance for things that you know you’re going to have to spend money on so that you don’t have to borrow when the time comes. Take responsibility for your money, put whatever spare money you can aside for emergencies & try to build up some savings at every opportunity. And finally, if you do find yourself getting into difficulties again & are not sure what to do, remember that you can always come & speak to one of us at the SAC - that’s what we’re here for! Good luck!

Appendix I: Budget Sheet Source of income

Total amount & period over which paid

Monthly income

Items of expenditure

Monthly expenditure

Monthly total 27

Appendix II: Calculation Guide Generally speaking, the best way to convert figures to monthly amount is to first work out what the total amount for the year would be & then divide that by 12. So, for example:To convert a yearly figure into a monthly amount: Divide by 12. For e.g. £780 per year = £65 per month (780 ÷ 12) To convert a weekly figure into a monthly amount: Multiply by 52 then divide by 12. For e.g. £150 per week = £650 per month (150 x 52) ÷ 12 To convert a biannual amount into a monthly amount: Multiply by 2 then divide by 12. For e.g. £18 per 6 months = £3 per month (18 x 2) ÷ 12 To convert a quarterly amount into a monthly figure: Multiply by 4 then divide by 12. For e.g. £255 per quarter = £85 per month (255 x 4) ÷ 12 Calculations get more complicated where money is paid either irregularly or for only certain periods of the year. A common example of this is most student income, which is usually paid over a period of 3 terms. When trying to calculate a monthly amount for these figures, it is generally best to divide the total amount paid by the period over which it is paid (or by the period on which you rely on it). So, for example:If you rely on your Student Loan for the whole academic year: Divide the total amount paid by 38 (the total number of weeks in the academic year). For e.g. £4,625 paid in total for 08/09 = £121.71 per week over 38 weeks (4,625 ÷ 38) If you rely on your Student Loan during term-time only: Divide the total amount paid by 30 (the number of term-time weeks in the academic year). For e.g. £4,625 paid in total for 08/09 = £154.16 per week over 30 weeks (4,625 ÷ 30) To then convert these weekly figures into a monthly amount, simply multiply by 52 then divide by 12 as shown in the first set of examples above.

Appendix III:

Template Financial Statement Name :

Date :

Income

Monthly

Maintenance Loan Maintenance Grant Wages Other (Please Specify)

TOTAL INCOME (A)

Expenditure Mortgage/Rent Building Insurance Contents Insurance Council Tax Housekeeping & Clothing Water Gas Electricity TV Licence Fares & Motoring Telephone Course-Related Items Repairs and Maintenance Other Discretionary Expenditure

£ £ £ £

Monthly

£ £ £ £ £ £ £ £ £ £ £ £ £ £

MONEY FOR CREDITORS (C)

TOTAL EXPENDITURE (B) (A) – (B)

Priority Debts Creditor

Balance £ £ £ £

Monthly Offer

£ £ £ £

TOTAL PRIORITY DEBT PAYMENTS (D)

MONEY FOR NON-PRIORITY CREDITORS (D)

(B) – (D)

Non-priority Creditors Creditor Balance

£ £ £ £

TOTAL NON-PRIORITY DEBTS £ TOTAL NON-PRIORITY DEBT PAYMENTS (E)

Pro Rata Monthly Offer

£ £ £ £

I certify that the attached financial statement is an accurate account of my financial circumstances Name………………………………

Signature………………………………… Date……………………

Appendix IV: Equitable Distribution Calculation Equitable distribution is the method where available income is divided amongst non-priority creditors on a pro rata basis. This is an accepted method of dividing money amongst creditors of equal status. If you have income available for non-priority creditors after essential expenditure & decide to offer proportional repayments on a pro rata basis, follow steps 1 & 2 below:

Step 1:

D ivide your available income by the total amount outstanding to all creditors to get a ‘constant factor’; then

Step 2:

Multiply the constant factor by each individual debt to get a pro rata offer

NB The combined amount of your pro rata offers should be equal to your total available income

For e.g. Available income Debt 1 Debt 2 Debt 3 Total Debts

Step 1:

Available income (£80) ÷ total arrears (£2,000) = constant factor (£0.04)

Step 2:

Constant factor (£0.04) x each debt = pro rata offer

Debt 1 £0.04 x Debt 2 £0.04 x Debt 3 £0.04 x Total pro rata offers

£80 £1,000 £850 £150 £2,000

£1,000 = £40 £850 = £34 £150 = £6 £80

Appendix V: Template Letters to Creditors Letter 1:

L etter informing creditor of financial difficulties & requesting hold on enforcement action/freeze on interest

Creditors name & address

Your address

Date

Dear Sir or Madam, RE: Account &/or Reference Number I am writing to inform you that I am currently experiencing financial difficulties, which have resulted in me falling behind in my payments towards the above account. I am now seeking advice & assistance & will contact you shortly with my proposals for repayment. I would be grateful if you could take no action on the above account for a period of at least 28 days and agree to freeze any interest and/or other charges accruing. I look forward to your reply and extend thanks in advance for your cooperation. Yours faithfully,

Your name

Letter 2:

Letter presenting payment proposals to accompany financial statement

Creditorâ&#x20AC;&#x2122;s name & address

Your address

Date

Dear Sir or Madam, RE: Account &/or Reference Number Further to my recent letter I enclose a copy of my financial statement, which gives details of my monthly income, essential expenditure and priority debt repayments. It also includes a schedule of all of my other creditors and my payment proposals. My current financial difficulties stem from EXPLAIN REASON(S) FOR FINANCIAL DIFFICULTIES & ANY SPECIAL/ RELEVANT CIRCUMSTANCES continued...

letter 2 continued...

PRESENT YOUR PROPOSAL For e.g. A. As you can see, my circumstances are such that I am not currently in a position to make any offer of repayment. I would therefore be grateful if you could grant a full moratorium until such time as my circumstances improve SPECIFY TIME IF KNOWN; OR B. As you can see, my circumstances are such that I am unable to make any offer of repayment and will be unable to do so at any point in the foreseeable future. I would therefore be grateful if you would give sympathetic consideration to writing off the outstanding balance on the above account; OR C. As you can see, my circumstances are such that I am not currently in a position to make any offer of repayment. I would therefore be grateful if you could accept token payments of ÂŁ1 per month until such time as my circumstances improve; OR D. The payment proposal outlined on my financial statement represents a pro rata distribution of my available income after essential expenditure and priority debt repayments. I believe that the offered repayment is the most realistic possible and should form the basis for a solution to my current financial difficulties In order to prevent increasing debt, I would also request that interest and/or other charges remain frozen and that you suspend further enforcement action for the duration of this agreement. I hope that you are able to agree to my proposals and look forward to your written confirmation. With thanks for your assistance in this matter. Yours faithfully,

Your name

Letter 3:

Letter asking creditor to reconsider following a refusal of a proposal

Creditorâ&#x20AC;&#x2122;s name & address

Your address

Date

Dear Sir or Madam, RE: Account &/or Reference Number Thank you for your recent letter regarding the above account. I am sorry that you do not find my payment proposals acceptable. The majority of my other creditors have accepted my proposal (IF APPROPRIATE ADD: and payments have commenced). This proposal is based on a realistic assessment of my current circumstances and represents all that I am able to offer at the present time. I would therefore be grateful if you would reconsider your decision in this matter. I look forward to your reply and thank you for your assistance in this matter. Yours faithfully,

Your name 32

Letter 4:

Letter asking creditor to reconsider decision not to suspend interest (where the proposal itself has been accepted)

Creditor’s name & address

Your address

Date

Dear Sir or Madam, RE: Account &/or Reference Number Thank you for your recent letter regarding the above account. I am sorry that you do not feel able to suspend interest charges accruing on the above account. The majority of my other creditors have agreed to suspend interest charges and have acknowledged that to continue charging interest would result in my total debt increasing and would therefore exacerbate my current financial difficulties. I would therefore be grateful if you would reconsider your decision not to suspend the interest. (IF APPROPRIATE ADD: This would mean that my monthly payments will actually reduce the outstanding balance owing to your company.) I look forward to your reply and thank you again for your assistance in this matter. Yours faithfully,

Your name

Letter 5:

Letter acknowledging creditor’s acceptance of your proposals

Creditor’s name & address

Your address

Date

Dear Sir or Madam, RE: Account &/or Reference Number Thank you for your recent letter regarding the above account. I note your acceptance of my payment proposals (SUMMARISE YOUR PROPOSALS & WHAT YOU UNDERSTAND HAS BEEN AGREED). I would like to take this opportunity to thank you for your assistance in this matter. Yours faithfully,

Your name 33

Letter 6:

L etter informing creditor of a change in circumstances & requesting a readjustment of the current agreement

Creditorâ&#x20AC;&#x2122;s name & address

Your address

Date

Dear Sir or Madam, RE: Account &/or Reference Number Since making the current agreement with you my circumstances have changed (GIVE DETAILS). THEN ADD AS APPROPRIATE: A. I cannot now afford the agreed monthly payments; OR B. I can now afford to increase my agreed monthly payments I enclose my latest financial statement, which gives details of my monthly income, essential expenditure and priority debt repayments. It also includes a schedule of all of my other creditors and my payment proposals. In view of my circumstances, I would be grateful if you would accept my revised payment proposals and continue to suspend any interest. Should my circumstances change again I will contact you. Thank you again for your assistance and I look forward to your reply. Yours faithfully,

Your name

Useful Contacts: Debt Advice Agencies: USSU Student Advice Centre

1st Floor, Falmer House, Brighton BN1 9QF 01273 877038 Fax: 01273 873501 advice@ussu.sussex.ac.uk www.ussu.info/advice

☎ ✉

National DentLine

☎ 0808 808 4000 Fax: 0121 410 6230 ✉ info@nationaldebtline.co.uk www.nationaldebtline.co.uk/

Budgeting & Price Comparison Sites: SAC

www.ussu.info/advice

Money Saving Expert

www.moneysavingexpert.com

Tesco Price Check

www.tesco.com/todayattesco/pricecheck

Uswitch

www.Uswitch.com

Money Supermarket Consumer Credit Counselling Service

☎ 0800 138 1111 ✉ contactus@cccs.co.uk www.cccs.co.uk/

www.moneysupermarket.com

Energy Helpline

www.energyhelpline.com

Simply Switch Citizens Advice

www.simplyswitch.com

PayPlan

Trusts, Charities & Educational Foundations:

www.payplan.com

Scholarship Search

www.citizensadvice.org.uk/ or www.adviceguide.org.uk/ (for online advice & details of your local bureau)

☎ 0800 917 7823

www.scholarship-search.org.uk

EGAS (the Educational Grants Advisory Service) www.egas-online.org.uk

EDF Energy Trust

www.edfenergytrust.org.uk

British Gas Energy Trust

www.britishgasenergytrust.org.uk

Southern Water Trust Fund www.swtf.org.uk

This pack was produced by the University of Sussex Students’ Union Student Advice Centre in November 2008. Whilst every effort has been made to ensure that the information was correct at the time of publication, no liability can be accepted for omissions, inaccuracies or subsequent legislative changes. The USSU Student Advice Centre would like to thank the following organisations, whose information & resources have greatly contributed to this pack: • Citizens Advice • Money Advice Trust • Consumer Credit Counselling Service

• Child Poverty Action Group • National DebtLine • Institute of Money Advisers