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debt advice - review_pack_for_people_who_have_no_available_income_to_pay_creditors

debt advice - review_pack_for_people_who_have_no_available_income_to_pay_creditors

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Published by Debt Advice
Free Debt Advice and Debt Management Planning guides. Avoid bankrupty today. www.InsolvencyHelplineNews.co.uk
Free Debt Advice and Debt Management Planning guides. Avoid bankrupty today. www.InsolvencyHelplineNews.co.uk

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Published by: Debt Advice on Nov 25, 2008
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05/09/2014

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Review pack for people who have no income
1

REVIEW PACK
FOR PEOPLE WHO HAVE NO AVAILABLE
INCOME

This pack is designed to help
you
negotiate
with

your creditors in a situation where you have no spare money or "available income" to pay them. It includes some example letters and a blank personal budget sheet.

You
should
make
photocopies
of
the

blank personal budget sheet so that you have some spare ones.

Warning: This pack is about credit debts e.g. unsecured loans, overdrafts, catalogues, credit

cards,
credit

sale agreements and so on. If you want help with priority debts - which includes things like rent/mortgage, secured loans, council tax, and electricity arrears - use our information pack \u201cDealing with your Debts\u201d and\ue000 phone us for advice.

NO PAYMENTS OR
TOKEN PAYMENTS

As you have no available income to pay creditors, you may have arrangements with them to make

no payments. On the other hand
you may be paying some creditors
token payments. These are small

monthly payments such as \u00a31.00 per month. You may be making token payments because creditors have asked for this or because you prefer to pay something.

F
ACT
S
HEET

N
O
28

If you are finding token payments a struggle, you could always ask for the creditors to accept no payments.

You can use this factsheet to help you continue negotiating token payments or no payments.

REVIEWS

At some stage you may receive a letter from a creditor asking for your situation to be reviewed or asking for increased payments. On the other hand, you may wish to contact creditors yourself towards the end of the review period to avoid interest payments starting again as some creditors do this automatically. If you are still unable to make an offer of payment, you will need to tell your creditor. You may find Letter A helpful.

A creditor may want to see an up-to-date copy of your personal budget sheet as part of the review. If a creditor sends you a blank personal budget sheet to complete, you could use this or to send your own instead. It is also a good idea to let each creditor know about all of your other debts so they can see that you owe money to more than just them.

Hopefully, your creditors will accept your request for no payments (or token payments) and agree to freeze any interest and other charges they are adding. In that case, continue making no payments (or token payments) but make a note of when the creditor is due to review the situation so you can be prepared.

THE UKINSOLVENCY HELPLINE
Review pack for people who have no income
2
WHAT DO I DO IF MY OFFER IS
REFUSED?
Action creditors can take and what you
can do

If a creditor refuses your request for no payments (or token payments) and demand payments.

\u2022
Don\u2019t give up. Write to them again.
Letter B may be useful for this.
\u2022

If some of your creditors have accepted your request for no payments, let the creditors who are refusing know about this.

If a creditor requests that you make token
payments.
\u2022

You could offer token payments, particularly if it will result in interest being frozen. We would suggest you offer no more than, say, \u00a31.00per

month, and you could ask for a payment

book or payment slips to help you pay. However, you should not be forced to pay something if you cannot afford it.

If a creditor refuses your offer and passes your account on to their collections department, a debt collector or a solicitor.

\u2022

Collections departments, debt collectors and solicitors have no more powers than the original creditor. All they can do is ask for payment. If you receive a letter from any of these, write to them saying that you are unable to afford to make payments. Letters A andB may be useful.

If a debt collector comes to your home
demanding payment.
\u2022
Door to door collectors have no right to
enter your property or remove your
goods. You do not have to let them in
if you don\u2019t feel comfortable. Tell

them you are already dealing with their company in writing. All they are allowed to do is ask for payment. Do not let them persuade you to pay something if you cannot afford it. You could then show them your personal budget sheet to prove that you have nothing available to pay. If you are having problems with a collection agency we have a factsheet on "Harassment."\ue000Phone us for

advice.
If a creditor threatens court action.
\u2022

Creditors may send you a default notice telling you how much you owe and that they may take further action if you don\u2019t pay. Creditors usually send this before sending your account to their collections department, a debt collector or a solicitor. Creditors have to send you a default notice for agreements regulated by the Consumer Credit Act before taking court action. If you get a default notice it does not mean you will definitely be taken to court.

WHAT IF A CREDITOR TAKES
COUNTY COURT ACTION?
If you receive a county court claim form.
\u2022

It is important to remember that it is not a criminal offence to be unable to pay your creditors. Youcannot be imprisoned because of this. The county court is just there to settle disputes about money owed and how to repay it.

\u2022

The county court should only expect you to pay what you can afford and you are given an opportunity to make an affordable offer on the "Reply Form" which is sent with the county court claim. You can use your personal budget sheet to help you complete the form. If you are unable to afford payments, you

Review pack for people who have no income
3

need to offer something - we would suggest a token offer of \u00a31.00 per month. Remember to return the form within the time limit and to the creditor\u2019s address shown in the \u201cAddress for Service\u201d box.

Do not send it back to the court.
\u2022

The court will write to let you know how much you have to pay and when to pay. Follow

the
payment
instructions
carefully. Remember: payments are
made to the creditor, not the court.
You could ask the creditor for a payment
booklet to make it easier to pay.
\u2022

It is very rare that you have to actually go to court. Everything is usually done by completing court forms. However, if you are told by the court to pay more than you can afford, you can ask the court to reconsider your offer, and you would then have to go to court.

\u2022

When you get a county court judgment (CCJ) interest on the debt is usually frozen automatically by the court.

\u2022

As long as you do not miss payments or pay late, no further action can be taken by your creditor. So it is important to pay on time. You should not, for example, pay several instalments in advance and then miss payments, unless the creditor has agreed to this beforehand.

\u2022

Pay each and every month if that is what the court has told you to do. If you are asking for a payment booklet,don\u2019t delay payments because you are waiting for it to arrive.

\u2022

If you have a county court judgment and your debts are under \u00a35,000 in total, you could ask for the county court to deal with

your
debts
through

an "Administration Order". We have a factsheet on \u201cAdministration Orders.\u201d

\ue000Phone us for advice.
\u2022

For more information about court action, look in the back of our information pack "Dealing with your Debts". If you don\u2019t have a pack,\ue000phone us for advice. We also have a factsheet on \u201cReplying to a county court claim form.\u201d\ue000 Phone

us for advice.
INTEREST

It is very important to try and get creditors to freeze interest, otherwise your debt will keep increasing. Keep trying to persuade your creditor to do this.Letter C may help you. If some creditors freeze interest, let creditors who are refusing to freeze interest know about this. Remember: if you are sued in the county court interest on the debt is normally frozen and it can be a good idea to remind creditors of this.

If creditors are refusing to freeze interest you could threaten to withhold payments until they do, particularly if your payments don\u2019t even cover the interest.

THINGS CREDITORS CANNOT
DO
Harassment

Your creditors are allowed to contact you from time to time to ask you for payment, but they must not threaten or harass you. If they do this to try and make you pay, they may be committing a criminal offence. We have a factsheet on "Harassment."\ue000 Phone

us for advice.

Below are some of the threats which you may across or hear about. However, these threats are often either untrue or misleading.

Imprisonment
Youcannot be imprisoned because you
cannot afford to repay your credit debts.

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