Know your rights: May’s debt news

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Justice scales law

Justice scales

We’re later than usual this month because of the Jubilee celebrations but don’t worry, we’re back to take you through May’s debt news.

And this month we’re talking about high rents, tax scams, mental health and why some people consider bankruptcy to be an easy way out.

Rents are on the rise

Last week we were talking about how to avoid rent arrears and what could happen if you fall behind with your rent costs. This is after more than 10,000 people contacted us for help with rent arrears last year, an increase of 27% from 2010.

On average, our clients in rent arrears are £760 behind on payments and £82 short of the amount needed to cover living expenses each month. The situation is worse for those in privately-rented accommodation.

It looks as though the problem could be down to squeezed budgets: as the average rent has risen by 2.4%, the average budget surplus has fallen by 40%.

New commitments from payday lenders

Payday lenders have agreed to new commitments, to roll out improved codes of practice. These are to be put in place by 25 July.

In response our director of external affairs Delroy Corinaldi said: “The Government has made progress in moving payday lenders towards some common standards of acceptable business conduct and we welcome moves to improve the industry’s codes of practice.

“What we will expect to see from these new codes is a detailed roadmap of how payday lenders are going to deal with the problems in their industry.”

Don’t be fooled

Three million people are due to receive tax refunds in the next few months and scammers are taking full advantage. They’re sending out fake emails supposedly from HMRC which look legitimate but could end up costing you dearly.

Our friends at lovemoney.com have talked about tax email refund scams to make sure you’re not caught out.

Mental health and debt

Mind, the mental health charity, has had a surge in calls. They say that the number of people seeking advice about personal finances and employment has doubled since the start of the financial downturn in mid-2008.

We’ve said before that there’s a strong link between mental health issues and problem debt, which is why we launched a wellbeing service in 2010.

If you, or someone you know, is struggling with money worries it’s important that they speak to us sooner rather than later. We know that 45% of our clients waited over a year before seeking debt help with can only make the mental health situation worse.

Is UK bankruptcy an easy solution?

We never say that bankruptcy is an easy option, but it’s a more straightforward process in the UK than it is for people based in Ireland.

A solicitor in Leicester has helped Irish clients take advantage of the ‘easy way out’ in the UK and written off more than £798m. One lady even describes the British bankruptcy route as “like winning the lottery”!

And finally

You may have already heard that Martin Lewis has sold his website, moneysavingexpert.com to moneysupermarket.com. Of course we will continue to give valuable debt advice on the forum so that people have easy access to free and impartial debt help.

Martin will carry on as Editor-in-Chief for the foreseeable future so you shouldn’t see too many changes just now. He’s also given a well needed boost to Citizens Advice with a generous donation of £1million.

That’s it for this month but please let us know if you hear of anything you think we should include in next month’s update. And don’t forget that you can follow us on Twitter or like us on Facebook for daily updates throughout the week too.

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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