Many of us will experience difficulties with balancing our money at some time in our lives.

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2 Money Advice pack Introduction Many of us will experience difficulties with balancing our money at some time in our lives. Struggling with finances and debt can be lonely experience as many of us rarely discuss our personal finances openly. This guide provides advice about how to tackle your debts and organise your finances. For specific problems we recommend that you contact a specialist debt advisory service, such as your local Citizens Advice Bureau. A list of contacts can be found at the back of this pack. Do not ignore the problem! It won t go away and the longer you leave it the worse it may get. Contact your Income Team for advice about rent, money or any of the issues mentioned in this pack. Call and ask for your Income Officer or income@sbhg.co.uk

3 Priority debts Some debts are more important than others! The law gives creditors various ways of getting their money back. This makes some debts more important than others. Your rent or mortgage is a priority debt because if you do not keep up payment, you may be evicted and lose your home. The table below shows different types of priority debts and the actions that may be taken against you if you do not pay these debts. Debt Action that may be taken Rent/Service charge arrears repossession of your home/eviction mortgage Council Tax arrears bailiffs/imprisonment* Magistrates fines bailiffs/imprisonment Child Support/Maintenance bailiffs/imprisonment Tax bailiffs/imprisonment Water rates supply cut off Gas/Electricity supply cut off Telephone disconnection Hire purchase repossession of goods * This debt will still be payable, even after a term of imprisonment is served. Your personal budget It is important to take the time to work out your personal budget. set aside some time when you know you won t be disturbed collect details of your debts and other bills collect details of your living expenses get a pen and some paper Use the income and expenditure sheets included in this pack

4 Income - Money you have coming in When working out your income do not include any income that is not guaranteed such as overtime or bonuses. Do not include any Disability Living Allowance or Attendance Allowance you may receive as part of your income calculation. These payments are for specific needs and do not have to be counted as income. Fill in weekly or monthly figures, whatever is best suited to you. Do not mix up the two. When working out your income include: wages (take home figure) any benefits you get any regular payments you get in (such as money from lodgers or keep from grown up children) See if you can increase your income by: checking your tax make sure you don t pay too much checking whether you are entitled to any benefits ask family members living with you to contribute if they are working Expenditure - Money going out Work out how much money you are paying out each week or each month. Once you have decided whether you will work it out weekly or monthly, do not mix up the two. Do not include any credit payments or debts. Rent check if you are entitled to any Housing Benefit. Council Tax check whether you are entitled to any Council Tax Benefit or any discounts. Remember people who live alone are immediately entitled to a Single Person Discount. Ask to pay over 12 months rather than 10, or

5 request weekly or fortnightly payments whatever helps you manage your money better. Mortgage you are usually required to pay any mortgage payments monthly. To get the weekly figure multiply by 12, then divide the result by 52. Water charges ask if you can pay weekly or monthly Gas and Electricity many companies have discounts for Direct Debit payers. You can arrange to pay your Direct Debit monthly. Work out your annual charge and divide this by 12. Where possible avoid key meters as the rates charged may be higher than paying by Direct Debit. Satellite TV include the cost of this as expenditure. Be prepared as some creditors will ask you to cancel this. TV Licence consider buying stamps weekly or monthly to spread payments. Pay by Direct Debit over 12 months. Call the TV Licensing customer services helpline on Clothing look at the amount you pay out on clothing over the year. Remember to include school uniform. Only include non-dependants if you pay for their clothing. As a rough guide allow 20 per person per month. School meals check to see if you are entitled to free school meals. Students who receive Child Tax Credit, and many unemployed people with children are entitled to Free School Meals. Housekeeping this should include food, toiletries, cleaning materials and kitchen/bathroom equipment. You may not be aware of how much you spend. As a rough guide allow 60 per person per week. Travel this should include travel to school, work or shopping. Other this should include all other regular expenditure that cannot be accounted for above. This includes things like cigarettes, birthdays, Christmas, newspapers, pocket money, children s clubs, entertainment and the lottery.

6 Money left over for debts To find out how much money you will be able to pay towards your rent/service charge arrears and other priority debts, take away your total expenses from your total income. If your expenses are more than your income: see if you can cut down on any of your expenses but don t cut down on basics like food, gas and electricity. You must try to ensure that your outgoings are reduced or your debts will continue to grow. Check whether you may be entitled to any benefits, or whether you can increase your income some other way. If your income is more than your expenses this is called disposable income. This means that you have some money left to pay debts. Make sure you start paying off your priority debts first. (see page 3 of this pack)

7 Personal Budget Planner Name:.. Address:.... Postcode: Telephone numbers: National Insurance number: Date of Birth: Occupation:.. Hours worked. Money coming in: Weekly Monthly Wages (Exclude overtime/bonuses unless guaranteed) Partner s wages Working Tax credits Maintenance Student loan Income from Lodger/Family members State Pension Private Pension Income Support or Job seeker s Allowance Pension Credit Child Benefit Child Tax Credits Incapacity Benefit or ESA Carer s Allowance Other Total income

8 Expenditure - Money going out Home Rent/ Rent Arrears Mortgage/Mortgage arrears Council Tax/Council Tax arrears Insurance Gas Electricity Water TV Licence Telephone/Mobile Other(any other outgoings relating to your home) Sub total Food/Clothes Food/Groceries Cleaning materials School meals Clothes/Shoes self Clothes/Shoes partner Clothes/Shoes Children Other (any other outgoings Sub total Travel/Leisure Travel public transport Travel Car Sports Cinema/Theatre/Video Hire Satellite TV Pubs/Concerts/Outings Other Sub total Total Expenditure Weekly Monthly

9 Example budget Name: Mr Joe and Mrs Jane Smith Address: 1 Any Street, Any town, Anywhere W1 234 Monthly income: (you can work yours out weekly just be sure to stick to either weekly or monthly) Wages: Joe 900 Jane 350 Total income: 1250 Monthly Expenditure: Rent: 450 Council Tax: 110 Gas: 40 Electricity: 30 Water: 22 TV Licence: 13 Telephone: 20 Housekeeping: 200 Car (tax/insurance/petrol): 150 Clothes 40 Prescriptions: 18 Total expenditure: 1093 Total left over for creditors = 157 per month. This means that Mr and Mrs Smith have 157 per month Disposable Income which they can use to clear any debts that have built up.

10 Money for debts Once you have used the budget planner to calculate your weekly or monthly income you should have a good idea of how much money you have left over to pay to people you owe money to. Use the table below to assist you: Total Income Weekly Monthly Total Expenditure Weekly Monthly Total income (minus) total Expenditure = Where you have more Income than Expenditure this leaves an amount of money for debts. This money can be used to make arrangements to settle priority debts first, and then help you clear all other debts you may have. Sample letters to people you owe money to Once you know how much money is left over for creditors, you can use the sample letters attached to make offers to pay, and explain your current financial position. Companies will often be sympathetic if they are kept informed about the reasons why you have been unable to make payments as agreed.

11 Example letter 1 Offer to people you owe money to Your name Your address Dear Sir/Madam: Account number: Date: I am unable to maintain my current payments because.. (explain your reasons here be as frank as possible) Please find attached my personal budget, which gives details of my Income and Expenditure. I am unable to meet my current monthly payments, and would like you to consider. (write down the amount you can reasonably afford here explain how often you will pay and when you will start making payment) I hope you will accept my offer and freeze interest on the account so my debt does not increase. I will keep you informed of any changes in my circumstances. I thank you for your help in this matter. Yours faithfully,

12 Example letter 2 Holding Letter Dear Sir/Madam: Account number: Your name Your address Date: I am unable to maintain my current payments because.. (explain your reasons here) As you can see from my personal budget I am unable to make an offer to pay at this time. (explain what you need to sort out, from Benefits to anything else that is preventing you from making payments) I would be grateful if you would be prepared to accept no payments on the account and to freeze any interest for a period of. (state when you will make contact again make sure it is 6 months maximum, as otherwise the offer may well be refused) Should my circumstances change before this time, I will write to you immediately with a new payment proposal. I thank you for your help in this matter. Yours faithfully,

13 Additional Information If someone you owe money to refuses to accept your offer: Try to explain the situation in more detail. Most people you owe money to would rather you made a small amount regularly than nothing at all. Point out that if they take you to court, interest is likely to cease from the time of any judgement. If your circumstances change: Contact the people you owe money to immediately if things get worse, and explain the situation. Draw up a new personal budget with a revised offer. If the situation has improved, send a new personal budget with an improved offer. Dealing with Harassment: People you owe money to cannot make threats, threaten violence, make repeated telephone calls at unreasonable times, repeatedly call you at work or contact your neighbours, friends or family about your debt. If you feel you are being harassed contact your local Trading Standards team for guidance. Hire Purchase and the law: If you have a hire purchase agreement (for furniture, for example), you do not own the goods until all payments have been made.

14 If you have paid under a third of the total cost of the item, the company can take back your goods immediately. If you have paid over a third of the total costs, the company can still take the goods, but would first have to apply to the county court for a court order to do this. Dealing with court action If you have been unable to come to an agreement with the people you owe money to they may start legal action against you. You must respond, or the court will make a decision in your absence that is difficult to appeal against. The courts are generally sympathetic, and provided that you follow their advice, they will only ask you to pay what you can afford. If the payment becomes too expensive you can make an application to vary the payment. Use form N245 (Application for suspension of a warrant and / or variation of an instalment order), which you can get from your local court. The N245 form allows you to let the court know what your income and expenditure is. You can use this to show if you are unable to honour the payment schedule you had previously agreed, if your circumstances change.

15 Useful contacts The following is a list of contacts that may be useful if you are experiencing financial difficulties: Citizens Advice Bureau A specialist advice service which helps people resolve their legal, money and other problems by providing free, independent and confidential advice. To find your local Citizens Advice Bureau, see the C.A.B. website: or visit the Rent and Money Matters pages of the Shepherds Bush Housing Group website: Comparison sites - Utilities Gas and Electricity prices can vary hugely. You can make savings by checking the price you pay, and comparing to see if there are any cheaper alternatives. Websites can be an invaluable source of this information: Money advice: The Money Advice Service offers advice on financial matters from savings to basic bank accounts: Debt advice: There are several specialist debt advisory groups that offer free, impartial advice for people in debt. or Remember - you can always contact Shepherds Bush Housing Group at any time about any of the matters in this advice guide. We will help you wherever we can, and direct you to a specialist organisation if more in depth help is required. Call and ask for your Income Officer or income@sbhg.co.uk

16 Shepherds Bush Housing Group Mulliner House, Flanders Road, Chiswick, London, W4 1NN Phone or Website