Know your rights: December’s debt news

posted by in Budgeting, Debt news

Justice scales law

Certainly not winter there

A little later than usual due to the holidays, we bring you December’s changes in debt law and financial news that may affect you.

Debt Relief Orders (DROs) hit the news late last month when the Insolvency Service highlighted that a quarter of the 44,000 people that have taken them out since 2009 are aged 25-34.

Recently the Supreme Court has also ruled that any benefit overpayments will be included in DROs, helping to alleviate those that may have been or are currently on benefits (if you think this could affect you, contact us for more advice).

DROs are a fantastic solution for people with debts less than £15,000 and assets less than £300, and the insolvency figures seem to back up the notion that the younger generation faces a future of higher debts and fewer assets.

Christmas spending

The BBC article on DROs demonstrated how easy it is to rack up debts over the Christmas period as it featured a family that built up £13,000 in debts since Christmas 2010.

They’re not alone; a YouGov survey predicted that 31% of Britons will have borrowed money to get through the festive period.

They also said that 11% of people will have lost control of their Christmas spending, which is worrying considering the bleak economic outlook for 2012.

Utilities, utilities, utilities!

It seems as though utilities are always in the news and unfortunately there are more negatives than positives.

To start on a high, there could be more help from water companies available to families on low incomes that are struggling with bills. They’re designing special tariffs targeted at people such as pensioners and lone parents to begin in April 2013.

However, the charity Save the Children is saying that the government scheme that’s set out to help those in fuel poverty is only reaching out to less than 3% of those that are eligible.

To add to this, the Committee on Climate Change expect that energy bills will go up by £110 by 2020 because of green policies and investment in wind farms and other low-carbon technologies.

Basic bank accounts

If you hold a basic account at Barclays, you could be facing charges more regularly if there aren’t enough funds in your account.

These include charges of £8 per day if there’s not enough money to cover a direct debit or standing order; this could increase to £24 per day from March.

Make sure you check the terms of your bank account and don’t get caught out. Careful budgeting is essential to avoid extra charges like these (and the costly basic bank account cashpoint fees).

Loan sharks attack

Whether you were struggling in the run up to Christmas, or you’re now feeling the January pinch, there are plenty of warnings about loan sharks preying on vulnerable people. Remember there are alternatives such as credit unions or social fund loans that might be able to help in emergencies.

Read our guest post from the England Illegal Money Lending Team if you or someone you know could be a victim. They aim to find and prosecute loan sharks through their Stop Loan Sharks project.

And finally…

You may have seen our Press Office’s Twitter campaign against spam texts from dodgy loan or debt companies. It’s an all too common occurrence and particularly worrying considering that a survey carried out by Shelter has revealed that almost one million people have taken out a payday loan to help pay their rent or mortgage in the last 12 months

Watch these top tips on how to recognise a spam text message and let us know if you receive these annoying texts by tweeting and use the hashtag #debttext on Twitter.

That’s it for this month but remember you can get in touch at any time through Facebook, Twitter or by posting a comment below. We always love hearing from you and if you come across anything you think would be interesting for others in a similar situation we’re always happy to include it.

Pavan Gata-Aura is a qualified debt advisor with 6 years of experience. She enjoys spending time with her two children, fundraising for charities, has spent time volunteering in Africa and takes part in organised races.

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