Maximise your income
Are you getting everything you’re
entitled to? If you’re not sure, make
an appointment with us for a bene-
fit check.
The Scottish Parliament Information
Centre estimates that billions of
pounds worth of state benefits and
tax credits remain unclaimed every
year.
In addition to state benefits, there
are other ways to maximise your
income, for example:
Take in a lodger.
Ask our grown-up children
who live with you to con-
tribute to the bills.
Switch services. You may
not be getting the best
deals for your insurance,
phone, broadband, elec-
tricity or gas suppliers. Ask
us for advice.
Set up Direct Debits for
your bills, to avoid late-
payment charges and get
discounts on some utility
bills.
Some people find it difficult to open
a standard current account, whilst
others may be reluctant to open one
for fear of getting into debt due to
bank charges.
You may not be aware that, since 1
January 2016, new basic bank ac-
counts have been made available to
everyone and are free of all charg-
es. These accounts offer no credit
card and no overdraft to avoid the
risk of debt.
They are particularly useful for those
who don’t already have a bank
account, and those who can’t use
their existing account due to finan-
cial difficulty.
These accounts give you a debit card
so you can make payments in shops
and online, access the ATM network
and set up direct debits.
Ten banking groups offer these fee-
free accounts: Barclays, the Co-
operative Bank, HSBC, Lloyds Bank-
ing Group (Bank of Scotland, Halifax
and Lloyds), Clydesdale Bank and
Yorkshire Bank, Nationwide, RBS
Group (NatWest, Royal Bank of
Scotland and Ulster Bank), Santan-
der, TSB and Virgin Money.
You will need a form of ID to open a
basic bank account but benefit
entitlement letters often suffice if
you don’t have a passport.
If you don’t already have one, open-
ing a bank account is a good idea
given that the Government has
made bank accounts a requirement
for all claimants of the new benefit,
Universal Credit, which aims to
replace all means-tested benefits
within the coming years.
Basic Bank Accounts
Community Help & Advice
Initiative (CHAI)
ELS House, 555 Gorgie Road
Edinburgh EH11 3LE
Phone: 0131 442 1009 Email: [email protected] Web: www.chaiedinburgh.org.uk Scottish Charity No. SC. 027594
July 2017 Volume 1, Issue 1
ABOUT US
We are a registered
Scottish charity who aims
to support to people in
Edinburgh and
Midlothian.
Our objectives are:
• To relieve poverty.
• To provide welfare
assistance.
• To provide practical
help.
• To provide infor-
mation, advice and
support on issues
such as housing,
debt, benefits and
employability.
December 2017 Factsheet # 1
@chaiedinburgh
Debunking DEBT Myths
There is a lot of false information out there about debts which we have found to be harmful
to people, causing them unnecessary stress and worry. Let’s debunk those myths!
MYTH: “If I don’t pay my debts, I’ll go to prison.”
Not being able to afford debt repayments is NOT a criminal
offence. You won’t go to prison just because you can’t pay your
debts although this was the case over a century ago. Some priori-
ty debts could result in imprisonment, for example magistrates fines,
licences, child maintenance, business rates, but this would be used as
a very last resort if you’ve ignored the debt, refused to pay or failed to
cooperate with the courts. It would take a long time to get there, as
many other debt enforcement methods would be used first.
MYTH: “If my bank account gets arrested, I won’t have
access to any of my money.”
Creditors can only attach funds from your bank account if you
have above £494.01 in your account. This amount is set by law
and is periodically revised. If you have various accounts in different
banks, £494.01 is protected in each account. You can challenge this
bank arrestment through the courts if it is causing you hardship.
MYTH: “If my wages get arrested, creditors could take most of my wages.”
The amount creditors could deduct from your wages is capped
by law, depending on your income. For example, creditors can-
not get anything from your wages if you earn less than £113.68
per week. If you earn between £113.68 and £410.9 per week, they
can take £4 per week or 19% of any wages exceeding £113.68 per week, whichever is the
greater. That’s the total amount creditors can get, so if there are several creditors they
would have to share this amount between them. However, the situation is different if you
owe money to the DWP (benefit overpayments), as they could take up to 40% of your net
wages (or share this amount with other creditors) and leave you with 60% of net earnings.
MYTH: “Sheriff Officers could turn up at my door to intimidate me and can
be quite aggressive.”
Recent TV programmes may have shown images of abusive
and aggressive ‘bailiffs’ (that’s the name for Sheriff Officers in
England and Wales). However this is not the reality of Sheriff Offic-
ers’ behaviour in Scotland. If someone comes to your door, beware
that they may not be actual Sheriff Officers but debt collectors work-
ing for creditors instead. These people don’t have any powers at all.
Report any threatening behaviour to the Police.
January 2018
@CHAI Tel. 0131 442 1009
Debunking Debt Myths—January 2018 Page 2
For debt advice, call us on 0131 442
MYTH: “Creditors can send Sheriff Officers to force entry into my property and take things
from my house.”
For Sheriff Officers to force entry into your property, there must have been a court order giving credi-
tors permission to do so. Exceptional attachment orders are very, very rare in Scotland. You would be
notified of any such visit in writing beforehand. To get to that point, creditors must prove that they
have tried other means (e.g. bank arrestment) and that there is something worth getting in the
house—which is why they will send someone round your home to try and get invited in. To avoid
this, never let anyone in your property unless they have a court order.
MYTH: “If I don’t pay my debts, I will be blacklisted.”
There is no such thing as a blacklist. However your debts, and whether or not you have repaid them,
are recorded in your credit report. This is what creditors use to decide whether to lend you money.
You can request a copy of your credit report and ask for any inaccurate information to be corrected.
MYTH: “My debts are written off if I haven’t made a pay-
ment in 5 years.”
A debt can become “statute barred” (or “extinguished”) after
5 years if the debtor hasn’t made a payment or admitted the debt
AND if the creditor has not taken legal action to enforce the debt.
The debt still exists but the creditor can no longer enforce the
debt, i.e. they cannot arrest your wages or your bank account or
make you bankrupt, although they may still continue to contact
you and ask for payments. However, for some debts such as coun-
cil tax arrears, court decrees and benefit overpayments, the time limit extends to 20 years before
they can become “statute-barred” assuming all other conditions are also met (as explained above).
MYTH: “I am liable for my partner’s debts.”
You are not liable for other people’s debts, unless there is a guarantor agreement, or a joint liability
for a tenancy, a joint bank account or a joint loan agreement or council tax arrears for example.
@chaiedinburgh