At the charity we're receiving an increasing number of calls
from people who have been made bankrupt by a creditor, despite not
being insolvent. Being insolvent means that you can't afford to pay
your debts as they fall due, and you don't have assets which
outweigh the debt. For example, a house with £30,000 equity and
unsecured debt of £10,000.
The helpline at Debt Support Trust is supporting an ever
increasing number of people who have been made bankrupt but have
equity in their assets.
One such case was a couple who hadn't paid their council tax and
the local authority took action and made the couple bankrupt. Their
property had £80,000 equity in it and the official receiver began
proceedings to sell their house. The unsecured debt for council tax
What Can You Do To Avoid Bankruptcy?
If you want to avoid bankruptcy then there are some tips and
advice we can provide, these include:
1. Deal with the debt: When debts begin to
increase it can feel like they are uncontrollable, but by dealing
with the debts you will be taking positive action to rectify the
2. Get a solution: Entering some debt solutions
will protect you from bankruptcy and losing your property.
3. Negotiate with creditors: If you speak to
the companies you owe money to then they you can organise a payment
plan and avoid bankruptcy.
4. Seek help: Our debt charity can help you
with advice and support you through dealing with your debt.
You can call for advice on 0800 085 0226 or complete the debt
analyser enquiry form today.
Can't I enter an IVA when I'm Bankrupt?
The IVA debt solution is suitable for people who have assets and
want to protect them from their creditors. However, once bankruptcy
has been awarded against you, then it's impossible to enter an
The IVA would protect your house and assets but you would need
to proceed with this debt solution before bankruptcy has begun.
What Can I Do Once Bankrupt?
If you have been made bankrupt and the official receiver or
bankruptcy specialist wants to sell your property to give money
back to your creditors then there are only a few options available
Your property is considered as an asset. If there is equity in
the property then they can use this equity to repay your debts.
The official receiver does not have to sell your property but
they do have to get the equity. This is the same for any asset,
whether it's a house, car, shares or any other asset.
If you are able to release the money, typically via a third
party (family or friend) offering the money, then the official
receiver would allow you to do this and this would help you keep
One of the most expensive monthly expenditures is rent or your
mortgage, but coupled with this is the council tax, home insurances
and energy costs. The energy costs for gas and electricity can be
difficult to pay when you live on a low income, but there is help
You can call Debt Support Trust for specific help for you, or if
you are struggling with debt you can get help on 0800 085
The energy giants want to help people on low incomes with
discounts. British Gas has their own deal which started in
1st May 2014, known as the Warm Home Discount.
This offer helps people get £140 off their electricity bills
throughout the winter of 2014/15. You can call British Gas on 0800
294 8604 if you have a prepayment meter or 0800 072 8625 if you
have a credit account, to discuss whether you are eligible.
If you are in receipt of pension credit then you automatically
get the discount. However, you could also receive the
discount if you have a number of other benefits, including income
support, jobseekers allowance, income support or universal
Should your family income be £16,010 gross per annum and you
spend 10% of your money on energy bills, or you have somebody
living in your house with a mental or physical disability (or an
illness) then you would be suitable for the discount too. If you
earn £16,010 gross in your household per year and you have a child
under 5, a person of pensionable age or somebody with a
vulnerability then the discount would be applied.
There are various offers at other energy suppliers too.
The discounts are not automatically applied and you must phone
the energy supplier, spend 10 minutes going through your financial
situation and then the discount can be applied for. It can help
during the difficult winter months.
There is help and support available for everybody, not just
British Gas customers. You can get free loft and cavity wall
insulation to help keep the heat in your property. This is a
project to help reduce the carbon footprint and can reduce your
You can get free loft and cavity wall insulation from most
energy suppliers and British Gas is offering this service to
everybody, even if you are not a customer with them.
Finding out that your partner has debt problems can be a
difficult situation, but one which can be managed and resolved.
Often there are mixed feelings about why the debt occurred and a
fear over the future, but Debt Support Trust can help with debt advice.
The initial shock of the debt can be
frightening and you may worry about how the money will be repaid.
There are ways we can help you at the charity to get debt free
again. You can call our advisors on 0800 085 0226
or complete our debt analyser to get online debt help.
People who contact Debt Support Trust don't always
realise the debt has existed. The shock can be worrying and mean
you lose sleep and relationships are affected. There are certain
tips we can give you to get the debt under control. These tips
There are questions you may have about your partners debt, so
we've created a frequently asked questions section below.
Usually your partner's debt will not affect you because the debt
is personal to them. However, if you have assets, such as a house,
which is jointly owned then your partner's creditors could ask for
any money in the assets. You will retain your share.
If you don't have any assets then your partner's creditors will
only be able to ask your partner for the money back.
If your debts are joint with your partner then you are both
liable for the full amount of the money. Most people think the debt
is split 50/50 but in truth each person is liable for the full
amount. This means that if one person can't afford to make
repayments then the other party can be responsible to repay the
Bailiffs are not allowed to take your possessions but they can
take items belonging to your partner.
Typically your credit rating will not be affected because of
your partner's debt, however, if you are 'associated' with your
partner on your credit file then it can impact on your credit
score. You can speak to the credit referencing agencies (Experian,
Equifax and Call Credit) to understand how you improve your credit
There are debt solutions which can give you legal protection
from your creditors, giving you peace of mind and a legal solution
to debt problems. These debt solutions have positives and
negatives, but at Debt Support Trust debt charity we're here to
When debts seem impossible to repay, or the cost of simply
maintaining the interest payments is overbearing then it's best to
look at debt solutions. There are formal and informal options
available. An informal arrangement offers no guaranteed legal
protection from your creditors, but can help get the situation back
under control. Formal debt solutions guarantee to protect
you from your creditors if they accept the proposal.
If you would like to discuss your debt situation with a
qualified advisor then Debt Support Trust can help. You can call on
0800 085 0226 or complete our debt analyser.
There are debt solutions which can give you legal protection
from your creditors, meaning they can't continue to telephone you
or demand payment. All of the debt solutions which enable you to
gain protection from your creditors will also write off the debt
you can't afford to repay at the end of the solution, along with
interest and charges.
The debt solutions which best help you to become debt free and
give you protection from your creditors are an IVA, Trust Deed
Scotland and bankruptcy.
The highlights of each solution are:
IVA: Typically a 5 year solution, the IVA
allows you to pay one amount to one company and freezes interest
and charges. Debt which is not repaid after the 5 years is written
Trust Deed: The Trust Deed debt solution lasts
4 years usually. You make an affordable monthly payment and stop
all other payments to your creditors. Your interest and charges are
cleared at the end of the solution along with any remaining debt
you have not repaid.
Bankruptcy: There are various routes to enter
bankruptcy throughout the UK but they all mean you gain protection
from your creditors and become debt free again.
These debt solutions enable you to put a proposal to your
creditors, which is often accepted. The negative is that your
credit file will have a default added, lasting for 6 years.
When you're in debt there are some top tips to deal with the
debt. Our top debt advice
You should not:
You can call Debt Support Trust for advice on your debt problem
by calling 0800 085 0226 or via our debt analyser
One of the most popular thoughts people have when they are
struggling financially is to consolidate debt into one monthly
loan repayment. This involves taking a number of loans and credit
agreements and merging them into one payment, with one rate of
It makes the debts easier to manage and understand, with one
interest payment and one amount leaving your bank every month.
These loans still exist and it is possible to still get a
consolidation loan, although it was far easier before the credit
The chances are that consoldation loans will want you to have a
good credit rating, so you can get a lower rate of interest.
Debt Support Trust and our friendly advisors can help navigate
you through your options. You can speak to us on 0800 085
If you are unable to get a consolidation loan then you may have
to think about other solutions. Everytime you apply for a loan it
will leave a mark on your credit file, and the more you apply the
less likely you are that a lender will give you the money.
You can get debt help to
become debt free from Debt Support Trust. This involves considering
your debt level, monthly income, your expenditure and any assets
We can assist you with advice on how to apply for the loan and
ensure your credit file is as accurate as possible. If the
consolidation loan isn't applicable for you, because the debt is
too large or because your credit file has got too many defaults,
then we can look at other debt solutions which work similarly to
the debt consolidation loan.
If you can't receive a debt consolidation loan then then next
step is to consider debt solutions. There are similar benefits to
the consolidation loan and some debt solutions. For instance, a debt management
plan will allow you to pay one affordable payment each month to
A Trust Deed or IVA would help you to repay what you could
afford over a fixed period of time and write off the debt you can't
afford to repay. You could also consider bankruptcy too.
There are pros and cons to the debt solutions and one of the
negatives is that each debt solution will leave a default on your
credit file, whereas a loan would not.
If you want to discuss your debt options then Debt Support Trust
can talk through all of your options, providing the positives and
negatives, for you to consider. You can call 0800 085
0226 to get information about consolidation loans or debt
Tax credits are given to families to top up their income in the
form of child and working tax credits. However, many families find
that because of a change in their circumstances, they have tax
credit debts. This can cause stress and distress but Debt Support
Trust can help.
If you would like help with your tax credit debts, please call
our helpline on 0800 085 0226 for debt help.
The debts to the HMRC tax credit department can vary from
hundreds to thousands of pounds. When HM Revenue and Customs
reevaluate your account they may inform you that you've been
overpaid. Last year over 1.5 million people fell into this problem.
The Government overpaid £1.5 billion in the year 2012-2013 to
people claiming tax credits.
New powers which will be introduced in 2015 will mean HMRC can
take the money from a person's bank account. In the meantime, HMRC
can refer the debt to debt collectors who are taking action to
recover the money.
The first stage from HMRC is to ask for the money back. They
will write and call to make an arrangement to get the money back.
You won't be asked to repay the money in one payment if you can't
afford it, but usually will be asked to create a payment plan.
When you create the payment plan you won't usually face the
threat of debt collectors, but if you fail to make contact with
HMRC they could take further action.
If you are struggling to repay tax credit debts along with
credit cards, overdrafts and loans then you're not alone. Thousands
of people contact Debt Support Trust with debt problems and we're
able to assist them back to a debt free life.
If you need help with any element of tax credit advice call our
helpful money advice team on 0800 085 0226. We'll be glad to
help you with your query.
problems occur you may need help and advice from your local
debt advice bureau. If you need advice from a registered charity
specialising in debt you can speak to Debt Support Trust on
0800 085 0226.
If you would like free face to face advice we always recommend
speaking to the Citizens Advice Bureau. Your local debt advice
bureau can provide excellent support and assistance if you would
prefer to meet somebody face to face.
At Debt Support Trust, we provide expert online and telephone
debt advice. Many people like speaking to our friendly advice team
about their debt problems because it ensures they get immediate
If you would like help to find your local face to face debt
advice bureau you can always call Debt Support Trust and we will
help you arrange an appointment and signpost you to your local debt
If you need help with debts from a registered charity you can
call Debt Support Trust on 0800 085 0226. You can
also complete the debt test to check confidentially which debt
solutio would be best for you.
Your mortgage is a priority which must be paid on a regular
basis, otherwise your mortgage company is entitled to repossess
your home and sell it to recover their money. If you have debt to
your mortgage company and need help then speak to Debt Support
The charity advisors at Debt Support Trust provide holistic debt
advice on a wide range of issues. You can get debt advice by telephoning 0800 085
We're focussing on priority debts this week and one vital
expenditure which must be made on time is rent or a mortgage. This
ensures you retain your property.
If you have arrears on your property loan then your lender will
work with you initially to resolve the problem. Usually when your
mortgage is 3 months in arrears your lender will commence court
It's always best to liaise with your mortgage company before the
debt grows too large. By speaking to the lender you can reduce the
chance they will proceed with repossession or court action.
There are a number of financial solutions which can help you
deal with your mortgage debt problems. If you are failing to pay
your mortgage because of other unsecured debts, like your credit
cards and overdrafts, then there are debt solutions which can
resolve this. By resolving your unsecured debts you would then be
able to afford your mortgage.
If you have recently become unemployed then you could be
struggling to pay your mortgage. There are solutions which can help
pay your mortgage interest for up to two years.
If you fail to come to an acceptable agreement with your lender
to repay the arrears on your property then your home could be
repossessed and sold.
The property can be sold under value in order to recoup as much
money as possible. If the outstanding mortgage was £150,000 but the
property was sold for £130,000 then there would be a £20,000
shortfall. The property owners would be liable to repay this
£20,000, plus any fees for selling the property.
If the property is jointly owned by two parties and their is a
shortfall then both parties are liable to repay the full amount of
You can receive help with your mortgage debts from Debt Support
Trust. We will review your financial position and discuss the
options available to you. As well as considering your secured debts
we will also review unsecured debts to help resolve your complete
For help with your mortgage debts please call 0800 085 0226 or
complete the debt analyser below.
Debts to council tax can feel like the most complicated and
frightening debts to manage. As a priority expenditure council tax
must be paid before other debts like credit cards, payday loans and
personal loans. Council tax is paid to your local
Government body to help your local area pay for services. Many
people we help at Debt Support Trust can't afford to pay their
council tax because of their other unsecured debt problems.
Council tax departments may not contact you as regularly as your
credit cards and other debts but they are vitally important. The
council can take action to recover their money which we will
If you have debt problems with your local council then speak to
our charity advisors at Debt Support Trust today. We've helped
thousands of people with council tax debt issues. You can call Debt
Support Trust on 0800 085 0226.
Council tax debt problems are some of the quickest to become a
concern. A reduction in income can mean paying for council tax is
harder. People who are unemployed will get a discount, as will
people who are living as a single person in a property. At Debt
Support Trust people in debt often have to spend 10% of their
income on their council tax, which can seem like a lot when there's
rent/ mortgage, food, gas, electricity and transport to pay for
Recent statistics show that 17% more people are struggling with
council tax debts, compare to the same period last year.
Your arrears will quickly be passed to a debt collector, even if
it's just one monthly you've accidentally missed. The debt
collector will want to organise a payment plan. If this payment
agreement is broken then they will take further action against you
to recover the money.
One of the actions some councils are taking when arrears exist
is to organise a wages arrestment. This involves the council going
to court and getting permission to take a percentage of your
If you have a wages arrestment your employer will pay the money
directly to the council each month. This means they are guaranteed
to get their money back each month. You want to avoid a wages
arrestment because it can be a substantial amount of your income
and cause further money worries.
There are some local councils that won't lift a wages arrestment
once it's in place, even if you're planning to enter a debt
solution like a debt management plan.
It's important to speak to a debt advice charity if you're
struggling with arrears. There are routes to resolve money worries
which include payment plans, debt solutions and short term token
The council will want their money back but they will be
supportive and understand that you could have short term money
If you need help to understand your options you should first
speak to the local council about what they can do. Most councils
will have a recovery or debt collection department. If you have
council tax debts plus debts to overdrafts, loans and credit cards
then speak to Debt Support Trust about the solutions available to
Complete the debt analyser or call 0800 085 0226.
Your local council may have a debt management and debt advice
department so you can contact them directly. They will explain
their recovery process and help you come to an arrangement to repay
If you agree a payment plan you should ensure to meet these
repayments as you could only get one chance at a payment plan.
These payments will be on top of your existing council tax
liability for the current year. So, if your council tax is £130 per
month then you could agree to pay £70 extra to pay off the arrears,
meaning you have to pay £200 per month.
Help with council tax arrears is available from Debt Support
Trust on 0800 085 0226. We work closely with many councils and can
help you arrange payment plans or enter a debt solution which will
resolve all of your debts, making paying council tax affordable in
New research has found that unsecured debt problems are
affecting children with 2.4 million children living in a household
with a debt problem. The research also found that a further 2.9
million households were on the breadline and close to struggling to
meet the monthly outgoing payments.
Many families tell Debt Support Trust that they would be OK if
they didn't have to manage their contractual obligations to their
debts. Most families have to pay hundreds of pounds to their
creditors every month just to meet the minimum repayment on their
credit cards, loans and overdrafts.
The survey by The Children's Society of 2,000 households where
there is at least one dependent child found the average unsecured
debt was £3,437, with one in five households in debt. However, debt solutions
are available which can help.
Problems for Children with Debt
Children have commented that their family finances make their
embarrassed and some children have experienced bullying as a result
of the lack of money their family has.
The study shows that children are impacted by both the financial
issues which arise from being part of a poor family and the
societal stigma of being in debt. However, 49% of children did say
their parent's financial situation didn't make them feel
Solutions to Resolve Debts
There are solutions which can resolve debt problems. Most people
who are in employment will be able to contribute towards their
debts each month, however the minimum payments have become too
large and this is where the problem occurs. The minimum payment to
debts may have been manageable once, but the costs of living,
reduced income or consistent borrowing has made it impossible to
make ends meet.
The options are
There are lots of different debt solutions which could help a
person become debt free. It's about understanding each option - the
pros and cons - and making a decision based on what you think is
the best for you. Speaking to Debt Support Trust is one way to get
the advice you need and discuss the options.
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