NED News Adviceline: Winter 2015

I’m struggling with around £18,000 worth of debt and I wondered whether I’d be eligible for a Debt Relief Order. I know the limit used to be £15,000 but I heard that it was increasing soon. Is that right?

A Debt Relief Order can be a way to help people out of unmanageable debt. From 1 October the debt limit for a DRO increases to £20,000 so you might now be eligible.

You could qualify for a DRO if you don’t your own home, have up to £1,000 worth of assets, a car worth no more than £1000 and have £50 or less left each month once you’ve paid your essentials.

Debts such as magistrate’s court fines, student loans and child support maintenance aren’t covered by a DRO but credit card debt, overdrafts, loans and rent arrears are so check first whether you’re eligible.

The DRO lasts a year and during that time you don’t have to make any payments towards most debts included in your DRO. Your creditors can’t force you to pay off the debts either.

At the end of the DRO period your debts will be written off but you’ll still be responsible for paying off any debts that weren’t included in the DRO.

It’s also important to consider that while a DRO can help you deal with your debt, it may affect your credit rating, and if, during the 12 month period you borrow more than £500 you have to tell the creditor about your DRO.

I’ve had a letter offering me the opportunity to invest in fine wine. The returns look really good and I’m tempted, but my friend says not to trust the letter in case it’s a scam. How can I tell if it’s genuine?

While there are lots of legitimate investments out there, your friend is right to warn you. Letters and cold-calls from unknown companies can be a scam. Investment opportunities can ask for large sums and you need to be completely confident before you put your money in.

First, do your research on the company. Investigate their website thoroughly and pay attention to where the company is registered. If it’s outside the UK, be on your guard – if it is a con, it will be difficult to get your money back. You could also look for industry bodies that oversee the sector to assist you with investment advice.

Next, check if the offer is realistic. Do some comparisons among similar companies for what the usual return is. If it looks too good to be true, it probably is.

Finally, look out for high-pressure sales tactics. The literature may ask you to contact them by phone. If a salesperson puts pressure on you to complete the deal straight away, or tells you not to tell anyone about it, it could be a scam.

For advice or to report a potential scam, get in touch with us on 01246 250890

I’ve just found out that a shop I’ve bought goods from has gone bust. How will this affect my consumer rights?

When a trader goes into administration its rights and responsibilities change. Depending on your situation you might end up losing out, so it’s important to know what you can do to protect yourself.

A common problem when shops go bust is what you can do if you have a gift card. Once they go into administration shops are under no obligation to continue to accept gift cards, although some may continue to do so. If you have a gift card then hold on to it, even if it isn’t being accepted, as the situation can change. This works both ways, so if a shop is taking vouchers then make sure you use them while you can.

If you’ve put down a deposit on an item that you have yet to receive, then whether or not you receive it will depend on whether it has been ‘earmarked’ for you. If it has then the shop should fulfil your order, but if not then you may not see the goods. If you’ve bought something, for example electrical or white goods, which become faulty then it might be easier to claim under the manufacturer’s guarantee.

You can log a complaint with the administrators which will add you on to the store’s list of creditors, but realistically most customers will be a long way down the list. If you used a credit or debit card you may be able to make a claim from your provider, and if the goods or services you bought came with a manufacturer’s guarantee or an insurance-backed guarantee, you may be able to make a claim under them. If the trader was a member of a trade association, contact them to see if they can help. You can find out more about what rights you have and what you can do if things go wrong, by going to  www.adviceguide.org.uk

NED News Adviceline: Summer 2015

I’ve heard that the new pension reforms mean that I will have full access to my pension pot when I turn 55. How do I work out what I should do with my pension savings?

The pension reforms that came in this April give people the freedom to access their defined contribution pension how and when they want. You can buy an annuity, or take your pension out in one go, or withdraw it bit by bit and leave some it invested. Planning for your retirement can be complicated so it’s important to get guidance on your options.

The good news is that the Government has introduced Pension Wise, a new free service offering guidance online, over the phone with The Pensions Advisory Service, or face to face with Citizens Advice. The appointments are pre-booked 45 minute sessions tailored to your individual circumstances. Guidance is impartial, meaning that it will not recommend products or services, but they will describe your options and help you consider their impact.

To get the most out of Pension Wise guidance, preparation is key. First, work out the value of your pension pots. Look at your most recent statement, or contact your provider. Check if there are any restrictions attached. Next, get a state pension forecast, and gather the details of any benefits you receive.

The next step is to work out your likely expenditure. Include the cost of essentials like housing or utilities, and leisure activities. This should give you a rough budget.

Bring the information to your Pension Wise appointment. Your guider will help you think through your circumstances, and present the options available to you.

I bought a new mobile phone six months ago, and I used the signal checker on the website, but I never have any signal at home or work at all. I want to cancel my contract and go back to my old mobile company as I always had good service with them, but my new provider says I’ll have to pay all 18 months of the contract remaining if I want to cancel. I can’t afford to pay that all at once and a new contract, but I also can’t have a mobile phone that never works when I need it. What can I do?

Most mobile phone contracts last 24 months, but often they don’t specify minimum standards of service, so it can be tricky to get out of them without paying a hefty fee. Your best bet is to keep a log of times when your phone doesn’t work. Then contact your service provider and ask them if there is anything they can do. This might solve the problem without you needing to cancel.

It might say something in your contract about how much reception you should get: if so you should be able to cancel the contract without paying. Unfortunately, you can’t rely on what an online coverage checker will say as they’re just a guide and will only ever give an idea of the average signal someone can expect outside in that area.

If the phone doesn’t work in your house or workplace but does work outside, the problem might be with those buildings themselves. In that case you wouldn’t normally be able to cancel without paying. It might be that the signal just isn’t strong enough, so you should ask your provider to carry out a signal strength check.

If there’s no signal in your whole area, you might be able to cancel under the Supply of Goods and Services Act. Very poor service most of the time might mean the network is breaking your contract. Some contracts have terms and conditions which mean they’re allowed to not provide service sometimes, so you need to get advice to see if this applies to you.

Before anything else, contact your service provider, share any evidence of poor service and explain why you should be let out of your contract early. They might well allow you to cancel.

And if you need more advice, contact your local CAB, or call our consumer service number on 03454 04 05 06

My relationship with my partner has broken down and we have two small children. I’m really worried that if this goes to court the judge will favour the children’s mother over me as their father for residence decisions, and that I won’t be able to afford a lawyer who can make sure that I keep my children living with me. What should I do?

Relationship break-ups can be incredibly stressful for any couple, but dealing with the situation sensitively is all the more important when children are involved.

It is not always possible, but the best option is for you to come to an agreement with your partner about the care of your children. Where this doesn’t resolve the issue, the next step is to get the help of a local family mediation service. Decisions made with this service are not automatically legally binding but it can be very helpful if you can use the opportunity to avoid the costly and sometimes acrimonious court system. It is also necessary to attempt mediation before taking the dispute to court.

As an unmarried father, you won’t automatically have a right to a say in your child’s future, even though you may be financially supporting them. This will depend on whether you have parental responsibility for your child. If you were named on your child’s birth certificate since 2003, you’ll automatically have parental responsibility. But don’t worry if you haven’t got it this way – there are other ways you can get it, including asking to the court for an order.

If you are still can’t agree about arrangements for your children, you may have to consider going to court as a last resort. But remember, this will cost you a lot of money and may take a long time. If you want the children to live with you, you’ll need to apply for a residence order. If the children will be living with their mother, you’ll need to apply for a contact order. This will set out the kind of contact you’ll have with your children, for example how often you can see them or take them away on holiday. It can be a good idea to apply to the court for both a contact order and a parental responsibility order at the same time, if you haven’t already got parental responsibility.

Legal aid is not available for the court proceedings of private family law cases. However you may be able to get legal aid to pay for help solving your dispute out of court, through a family mediation service, so this can be the ideal way to make arrangements for your children. Family mediation is an alternative to solicitors negotiating for you but not a substitute for legal advice. You will be encouraged to consult a solicitor during the mediation process to advise you on the personal consequences of your decisions. At the end of mediation, the decisions you have reached can be used as the basis for a divorce settlement, or a legal separation agreement. You can find out more about the availability of legal aid for family mediation at www.familymediationhelpline.co.uk, or on the National Family Mediation website at www.nfm.org.uk.

If you are thinking of going to court to deal with arrangements for your children, you should consult an experienced adviser, which you can do for free at a Citizens Advice Bureau.

NED News Adviceline: Spring 2015

HMRC has just contacted me to say that I owe them money as they have overpaid my Tax Credits. I didn’t realise that this could happen, and I don’t have enough money set aside to pay them back. What should I do?

Tax Credits are designed to give working people a little bit of extra income to help guarantee a decent standard of living from work.

Unfortunately, the system by which entitlement to Tax Credits is decided is complicated and can often lead to people falling into debt when they are asked to repay money they’ve wrongly been given by HMRC.

Tax Credits are gradually being phased into the Government’s new Universal Credit system, which is intended to reduce Credit miscalculations and overpayments.

However whilst we wait for the system to change, problems with the current process seem to be getting worse. Last year, Citizens Advice across England and Wales saw a 14 per cent increase in problems relating to debt caused by Tax Credit overpayments.

The combination of pressures on people’s living costs means that being asked to repay Tax Credits at the end of the year can be a real blow. Sky-high energy bills, expensive childcare and wages which are still failing to keep up with costs mean that it can be a real struggle for households make ends meet. The last thing hard-pressed households need is for HMRC to put them in more debt.

Often, HMRC will be willing to work with you to see what you can afford to pay back, but in many cases, poor communication and delays by the agency have led to our clients struggling to get a fair outcome.

If you’re struggling with debt then it’s important to take steps to get on top of your bills. Debt can seem impossible but there’s always a way out of problems.

If you come to us, we will be able to work out a debt management plan with free and impartial advice.

I have been struggling with my finances for a while, and now it’s got to the point where I can’t afford bills like council tax or my mortgage. I’m worried that if I can’t find a solution soon, I might have to sell my home. What can I do?

The months after Christmas can be particularly tough with extra expenses over the festive period putting even more pressure on household budgets. If you are facing New Year debts don’t panic. With the right help there are ways to get on top of your outstanding bills.

Firstly, the earlier you get help with debt problems the easier it is to get them sorted. Trying to carry on as if everything is normal can make things worse, as debts can pile up quickly. Letting your creditors, like your mortgage company or local council, know if you will be unable to pay them is key. Creditors should consider reasonable repayment plans and may be able to offer you more time to pay.

It is important that you prioritise paying certain debts, such as the rent, mortgage or energy bills, first to keep a roof over your head and the heating on. Depending on your circumstances you may be able to get support through benefits, so it is worth checking this with the Department for Work and Pensions. If you are unable to pay your council tax debt the local authority may agree to let you pay a reduced payment over a longer period or even in exceptional circumstances write off the debt, but you will have to keep paying your ongoing bill going forward.

Drawing up a proper budget of your expenses can help identify areas you can cut down on. Before you turn to a loan to cover costs, think carefully and find out what this means for any future repayments and interest that will be due on the loan. Citizens Advice Bureaux offer free, confidential and independent advice, can help work out costs and negotiate with your creditors, and may be able to help you get debt-free by looking at appropriate options available for you.

Someone has been going from door to door on my street and I’m concerned they might not be a legitimate trader. What should I do?

As a general rule it is worth trusting your instincts — if an offer sounds too good to be true, it probably is.

Scammers often use cold calling and doorstep sales to target victims, so before agreeing to anything or signing anything first tell someone you trust about the offer. Having this conversation with a family member, friend, or a good neighbour could stop you from losing money.

If a trader is offering you a deal take a moment to check out their details. Ask the trader if they belong to a professional organisation, such as TrustMark, and if they say they do, then phone the organisation or look on their website to check this is true.

Don’t agree to a deal on the spot that you have any reason to doubt. Legitimate traders should be happy for you to take their details and say you need more time to make a decision. Avoid handing over money before a job is started. A reliable trader won’t ask you to do this as they should have the money to cover materials until they are paid.

If you are concerned about an offer, think you may have been caught out by a rogue trader, or are concerned for a neighbour, you should call the Citizens Advice Consumer Service on our helpline on 03454 04 05 06. If you’ve fallen for a scam, report it to the Police and you can also report it to Action Fraud.

For further advice call North East Derbyshire CAB or visit your nearest bureau. See our website for details. www.nedcab.org.uk