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Debunking DET Myths - CHAI...Debunking DET Myths to people, causing them unnecessary stress and...

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Community Help & Advice Iniave (CHAI) ELS House, 555 Gorgie Road Edinburgh EH11 3LE Phone: 0131 442 1009 Email: [email protected] Web: www.chaiedinburgh.org.uk Scosh Charity No. SC. 027594 ABOUT US We are a registered Scosh charity who aims to support to people in Edinburgh and Midlothian. Our objecves are: To relieve poverty. To provide welfare assistance. To provide praccal help. To provide infor- maon, 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 informaon out there about debts which we have found to be harmful to people, causing them unnecessary stress and worry. Lets debunk those myths! MYTH: If I dont pay my debts, Ill go to prison.Not being able to afford debt repayments is NOT a criminal offence. You wont go to prison just because you cant 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 youve ignored the debt, refused to pay or failed to cooperate with the courts. It would take a long me to get there, as many other debt enforcement methods would be used first. MYTH: If my bank account gets arrested, I wont have access to any of my money.Creditors can only aach 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. Thats the total amount creditors can get, so if there are several creditors they would have to share this amount between them. However, the situaon 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 inmidate me and can be quite aggressive.Recent TV programmes may have shown images of abusive and aggressive bailiffs(thats the name for Sheriff Officers in England and Wales). However this is not the reality of Sheriff Offic- ersbehaviour 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 dont have any powers at all. Report any threatening behaviour to the Police. January 2018
Transcript
Page 1: Debunking DET Myths - CHAI...Debunking DET Myths 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

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

Page 2: Debunking DET Myths - CHAI...Debunking DET Myths 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

@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


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