Monday, 2 March 2020

NED News Adviceline: Spring 2020

Case Study (Claire)

Claire approached us for help to deal with her debts. She had a number of priority and non-priority debts which needed to be addressed, but due to a combination of physical and mental health conditions she had been unable to face the problems herself.

Priority debts are those where action taken by the creditor could result in eviction (for rent or mortgage arrears), disconnection of energy supplies or imprisonment. Non-priority debts do not have these potential consequences, so it is always most important to address priority debts first. Priority debts are not always as high as non-priority debts (such as credit card arrears) but have much more serious consequences. We therefore needed to help Claire address these priority issues to prevent further action being taken against her.

Whilst we were gathering information, we contacted priority and non-priority creditors to request a hold on any collection or enforcement action to provide time to fully explore all of Claire’s options. We discovered that Claire had made an application for Personal Independence Payment (a disability benefit) but had been unsuccessful. As part of our efforts to increase her income we helped Claire make a new claim which was successful, she was awarded £120 per week with a backdated payment of £2,800.

After an assessment of Claire’s debts and income and expenditure our debt advisers determined that she would be eligible to apply for a Debt Relief Order (a form of insolvency). Our debt advisers made a successful application which resulted in Claire’s debts being written off. Claire’s priority debts totalled approximately £3,000 and her non-priority debts were almost £7,000.

Since receiving help Claire has said that her mental health has been much improved and that she has had to have fewer visits to hospital as a result. The write off of her debts has given her a fresh start and the increased income from PIP has made managing her household expenses much more affordable; she has got a budget in place and is able to ensure that bills are paid on time. The PIP award also means that she is able to afford to get out of the house which also benefits her mental health.