Archive for Debt News Category
The facts about Universal Credit
If you are confused by the new Universal Credit you are not on your own. Many people are still not clear about how they will be affected or what they need to do. If that sounds like you don’t panic, help is at hand.
Here are some facts on Universal Credit you may find helpful and also details of where to find more information.
Universal Credit is a new means-tested single benefit payment that is going to replace certain income-based benefits over the next four years starting from this month (April).
The new Universal Credit payment system will start for new claimants in selected areas of North West England this month. New claimants elsewhere in England, Scotland and Wales will be enrolled into the Universal Credit system after October 2013, and new claims in Northern Ireland will receive Universal Credit as from April 2014.
If you are already claiming benefits that are affected by these changes, you will be switched over to Universal Credit sometime between April 2014 and 2017.
In a press release from his Government department, Iain Duncan Smith, the Work and Pensions Secretary, said that by April 2014 over one million people will be claiming Universal Credit. It is expected to rise to 12 million by 2017.
Criteria
Universal Credit will only apply to people aged 18 or over, but under the qualifying age for pension credit (i.e. of working age) who are on a low income with savings of less than £16,000 and who need help with bills including rent and childcare.
It will ultimately replace Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Child Tax Credits, Working Tax Credits and Housing Benefit. In future, any new claimants who are eligible for any of these benefits will receive one Universal Credit payment each month, instead of the individual benefits listed.
If you are already claiming any of the above benefits then your local benefits office will contact you in advance regarding your switch to Universal Credit.
Improve the transistion
One of the aims of the new system is to improve the transition from unemployed to employed, because it can be claimed by households with people who have just started work, or who are already in work but on low income.
As part of the Government’s ‘digital by default’ scheme, Universal Credit must be applied for online. Claimants will be expected to manage their claims with an online account. Anyone who needs help with this can contact a designated ‘Digital Champion’ in their local Jobcentre. This person will be fully trained to help and support people who are unsure about managing their Universal Credit information via the internet.
Further information on Universal Credit is available on the following websites:
Turn2Us (benefits help)
Department for Work and Pensions
If you are a Payplan client who is worried how Universal Credit will affect your payments speak to your Case Officer as soon as possible. They will be able to talk through your personal circumstances and see how Payplan can help.
Some facts about bankruptcy
Bankruptcy is not an easy subject to discuss and that can make it difficult to understand. At Payplan we are often asked about bankruptcy and, although we do not specifically deal with it on behalf of our clients, we want to highlight what it entails.
Some of the key questions we are asked are:
What is bankruptcy?
What are the possible impacts/outcomes of being bankrupt?
Who is involved?
How long does it last?
I’m thinking of bankruptcy what about my partner?
What is bankruptcy?
Bankruptcy is a type of insolvency, whereby a debtor cannot pay their debts as they fall due. In the United Kingdom (UK) the term only applies to individuals; administration or liquidation is the term applied to companies or organisations. It can be self-petitioned or can be imposed by the creditor/s directly (this being a large cost to the creditor in both money and time it is not very common). Bankruptcy does have a cost involved; expect to pay about £700 to start bankruptcy proceedings. In certain circumstances court fees can be exempt, therefore reducing the cost. Be aware of companies who can offer to arrange bankruptcy as there may be fees involved, which would increase the cost.
What are the possible impacts/outcomes of being bankrupt?
Firstly, it is important to seek advice before making the decision to go down the bankruptcy route. Bankruptcy might not be the best option and is certainly not the only option that can be taken to tackle debt. The truth is that bankruptcy differs dependent on personal circumstances. The Citizens Advice Bureau can give advice and may have a trained advisor to discuss your circumstances face-to-face.
Once the bankruptcy order has been completed, you can usually make a fresh start. This can be within 12 months and again is dependent on your circumstances. The debts you owe are usually written off, but student loan debts are exempt from bankruptcy proceedings. With the appointment of an Official Receiver (the court appointed person in charge of your bankruptcy) you will no longer have to deal with your creditors directly. Creditors normally stop other types of court action too.
With bankruptcy, details are entered on to the Insolvency Register a public record that can be accessed on the internet. Only in a few circumstances, like self-employment, do details of bankruptcy get published in local newspapers.
Remember to seek advice about bankruptcy before you make the decision, there are many other impacts according to your own situation e.g. homeowner status.
Who is involved?
Usually the debtor will instigate the bankruptcy proceedings, this means completing a Debtor’s Bankruptcy Petition and a Statement of Affairs – containing disclosure of assets and personal information including details of current bank/build society accounts. Once this has been approved by the courts (it can be rejected and an alternative debt solution suggested) an Official Receiver or a licensed Insolvency Practitioner is appointed to act as the trustee. Your existing creditors will be contacted by the trustee. During bankruptcy you cannot apply for any further credit without declaring you are an un-discharged bankrupt to the creditor. If you were to omit any creditor in error this is still included in the bankruptcy.
How long does it last?
Dependent on the level of co-operation with the Official Receiver this could affect the time you are considered to be bankrupt. Discharge will happen within a year with full co-operation. Sometimes the trustee will feel the bankrupt has enough disposable income to pay some into an Income Payment Arrangement (IPA) for 36 months.
I’m thinking of bankruptcy what about my partner?
Do you have a partner or someone else whom you have a joint debt with? Are you concerned what could happen to them? As long as you do not have any joint debts your partner or family will not be affected. However, if you do have joint debts your creditors can pursue the other party or parties under what is known as Joint & Several liability.
In conclusion;
Payplan can advise if bankruptcy or a Debt Relief Order (DRO) is the most appropriate solution; however we do not specifically manage the bankruptcy as a debt solution in the same way that we would an Individual Voluntary Arrangement (IVA) or Debt Management Plan (DMP).
I’m in an IVA but my creditors keep calling.
Ask Payplan… I’m in an IVA but my creditors keep calling.
An Individual Voluntary Arrangement is a legally binding agreement between you and your creditors. You both enter into an agreement where you agree to make payments into your IVA over a five year period, and at the end you will be discharged from your remaining unsecured debt. Part of the IVA agreement states that your creditors cannot pursue you for any additional payments, something that appeals to many people who decide to go down the IVA route.
However, it can sometimes take a while for the information about your IVA approval to filter down to all the relevant departments for each of your creditors, especially debt collection agencies. This can sometimes result in letters and phone calls requesting payment or them saying they do not know about the IVA.
If you receive any form of contact from your creditors once your IVA has been approved, here is what you need to do:
- If you receive a phone call you need to tell them your IVA was approved and give them the date of the meeting and your Payplan ID number and ask them to contact us for further details.
- If you receive a letter requesting payment or threatening action for missing a payment you need to send that to your case officer as soon as possible so that they can contact the creditor to inform them of your IVA.
I’m facing eviction, how can Payplan help me?
Ask Payplan… I’m facing eviction, how can Payplan help me?
Due to the ever increasing cost of buying a home, more and more people are living in rented accommodation, pushing the demand to a record high. High demand brings with it higher rental costs and, along with the increase in the cost of living, more people are finding themselves with rental arrears and possibly facing eviction.
In December 2012, the total amount of unpaid rent was £326million, representing 10.1per cent of all rent payments. *
Since failing to keep on top of rent payments can leave you facing eviction, it is extremely important that you act as quickly as possible. There are many reasons why you may have fallen into arrears, but if that reason is due to you having debts with credit cards or loans that have become unmanageable, then Payplan may be able to help.
If you were to contact Payplan here is what we would do…
- We would go through all of your incomings and outgoings to assess how much money you have left over at the end of each month to pay towards your debts and your rental arrears.
- Providing you have funds left over we would assess whether a Debt Management Plan or an Individual Voluntary Arrangement would be suitable for you. If so, we would negotiate an affordable repayment amount with your creditors. We would also ensure that you have enough funds to contribute towards your rental arrears.
- If you do not have enough funds to enter a plan, we would offer assistance where possible to help you set up your own arrangement and also look at other possible options, such as bankruptcy or Debt Relief Order.
http://www.bbc.co.uk/news/business-21067561