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Debts

Should I start my divorce during this credit crisis?
Unfortunately the credit crunch can cause many break-ups as families struggle to deal with the increasing financial burden placed upon them. Before contemplating divorce, seek out good independent and professional debt help. Unfortunately, many divorces have to sort out the debts rather than assets and you must consult a good family law solicitor to seek advice as early as possible if you want to separate or divorce.
See our recommended divorce solicitors

Think calmy and seek good advice before plunging your family into more serious debt.

There are many people willing to help you sort this out and we will introduce you to the Consumer Credit Counselling Service (CCCS), UK Insolvency Helpline, National Debtline and the Citizens Advice Bureaux. These agencies provide FREE and PROFESSIONAL advice.

Unfortunately, divorce is not just about dividing up wealth. In many cases, the cause of a break up has been debt and this problem does not disappear on divorce. Many people are in debt because of many different reasons and often due to circumstances outside of their control. When you are in debt, you can feel out of control. Together with the divorce process, this can seem like a nightmare. But help is at hand to regain control. The first step towards regaining control is seeking out information and guidance.

WARNING
You may have come across companies who offer to sort out your debts for you on payment of a fee. As we have said, there is much professional advice freely available from debt professionals and any money paid out as a fee, would probably be better spent reducing the amount of your debt. You should be very careful when considering a company which charges as although they may say that they can make your creditors (the people you owe money to) write off part or all your debt, this is unlikely to happen unless your circumstances are very special indeed.

You must also be very careful when considering any offer to consolidate your debts. The hidden danger is that you could end up paying more or even lose your home as these loans are usually secured. This means that if you do not keep up payments, they will enforce the debt and you would probably have to sell your home. This of course could be worse than your original situation.

Where do I start?
Step one is to get all the details down on paper. This is the only way you can attempt to get a clear and accurate picture of your financial situation. The National Debtline provides excellent leaflets and professional advice which is a totally FREE service. They also provide a budget sheet with instructions about what to include. We don't think that there is any subject concerning debt that they have not included. Details are in our Who can help section. Consumer Credit Counselling Service (CCCS) can also advise you about debts and an appropriate course of action.

But my spouse is still creating more debt
If you fear that your spouse may make this situation worse, you should take steps to avoid this. Under normal circumstances, it is best to be able to discuss matters first but you must do your utmost to protect the family's financial position. You must realise that you are jointly liable for debts when you are both signatories. You can inform your spouse about what action you have taken and why. It may be best to do this straight away as any delay could lead to undue hardship, shock and resentment.

Joint accounts
If you have joint bank accounts, you could ask your bank to freeze these until you have reached a financial settlement. This, of course, could have repercussions as neither of you could draw on the accounts. Another way round this is to ask the bank to arrange for joint signatures to withdraw sums of money. You could also close the accounts and arrange for a certain sum of money to be paid to your spouse's personal account. This would perhaps be preferable, especially if you are the main earner and there are children.

Credit and store cards
If you are both joint holders of credit or store cards, it could be wise to take some action. If you were to cancel them completely, any money owing would then have to be repaid or you could cancel your spouse's authority to use the cards if you are the main card holder. Another option is to reduce the spending limit.

I'm afraid I can't pay my mortgage or rent
This is of course an urgent issue. The first thing to do is contact your mortgage lender or your landlord. If you do this by phone, make sure that you take down the person's name and then write to confirm what you have discussed. Always make sure that you make a copy of anything you send and try to keep correspondence in an orderly file. This will make matters easier. It is imperative that you never ignore any correspondence. When the lender or landlord is in possession of the details of your situation, he should be more willing to try and sort out some temporary arrangement with you. If he does not know the reason for non-payment and does not receive any reply from you, he could assume that you are just unwilling to pay the arrears and could then take legal action against you.

Take control
By contacting the agencies listed above through our links in the Who can help section, you will be able to get information and advice on an extensive range of subjects. This is not to say that someone will do the work for you; you must be prepared to do all the paperwork and phoning. But once you make a start, you are well on the way to regaining some control in your life. Check out your bills, make a budget, get advice and then make informed decisions. In our Who can help section, we will also link you to an online debt support group. Sharing your concerns and taking the first step to deal with debt can feel like a great weight has been lifted form you. So, don't delay, make a start today.

GOLDEN RULES
If you follow these golden rules, National Debtline says that you won't go far wrong.

• Don't ignore the problem. It won't go away and the longer you leave it, the worse it gets.
• Don't borrow money to pay off your debts without thinking carefully. Get advice first. This kind of borrowing could lead to you losing your home.
• If you have lost your job, or you are off work because of illness, check whether your payments are covered by payment protection insurance. Check you are claiming all the benefits you can.
• Use the pack from the National Debtline to work out your personal budget. Make sure you show it or send it to your creditors when you tell them about your difficulties.
• Get in touch with your creditors straight away and explain your difficulties. Go and see them, or phone or write to them.
• Make sure you tackle your priority debts first - for example, debts which could mean you losing your home or having your gas or electricity cut off.
• Use the National Debtline pack to work out a reasonable offer to repay the money owed. Don't worry if it appears small if that is really all you can afford. Creditors prefer you to pay a small amount regularly than make an offer you can't afford. You can use the example letters on page 32 of the pack.
• Contact everyone you owe money to. If you make arrangements to pay some creditors but not others, you could run into difficulties again.
• If the first person you speak is unhelpful, ask to speak to somebody more senior who may be able to agree to what you want.
• Don't give up trying to reach an agreement even if creditors are difficult.
• Fill in the reply forms to court papers and let the court have all the facts. This information will be used to decide if you owe the money and what instalments you should pay.
• Always attend court hearings. Take a copy of your personal budget with you. Don't think that going to the county court makes you a criminal; it's not that kind of court. They will not send you to prison and there is no jury.
• Always keep copies of any letters or court forms you send or receive.

Remember
The National Debtline is always there to help you with letters and forms, and can explain what to do if you are asked to go to court.
See further details below.

Here we introduce you to Debt Advice Foundation, Consumer Credit Counselling Service (CCCS), National Debtline, The UK Insolvency Helpline, and the CAB.
If you are in contact with any of these agencies, please say you found them via Divorce Aid. Thanks. You will still need a solcitor's advice asap. Please contact us for hands-on assistance.

Debt Advice Foundation
Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt and money management.

Debt Advice Foundation Helpline
Their helpline advisors are available:
Monday to Friday 8am to 8pm and
Saturday 9am to 5pm on 0800 043 40 50
Please mention Divorce Aid if you contact them.

Tools and guides
Users have free access to a range of tools and practical guides on how to manage money effectively, budget and negotiate directly with creditors. The charity's Self help tools section includes:

Budget Planner
Debt Analyser
Benefit Entitlement Checker
Money Management Guide

The charity has also developed an Education section, which is aimed at developing children's understanding of key financial principles and equipping them with the tools they'll need to responsibly interact with the world of finance as they enter adulthood.
Debt Advice Foundation Website

What is National Debtline?
National Debtline is a national telephone helpline for people with debt problems in England, Wales and Scotland. Their service is free, confidential and independent. They give expert advice over the telephone and send callers in debt a self-help information pack called 'Dealing with your debts' free of charge. This is an excellent self-help booklet and includes the very useful budget planner. You will be asked whether you own your home or rent it so that the correct pack can be sent to you. There is also a different pack for those living in Scotland. They also produce a set of 23 supplementary factsheets on specific topics which they send out as appropriate.

If you need assistance with small business debts in England and Wales, then you can contact Business Debtline. Details are at the end of this article.

Their information pack is a comprehensive do-it-yourself guide which explains how to:

• Work out a personal budget
• Deal with priority debts
• Work out offers of payments to creditors
• Deal with court procedures

If your circumstances meet certain criteria, they could help you to set up a Debt Management Plan for you free of charge.

How do I contact National Debtline?
Freephone: 0808 808 4000 24 hour answerphone. Please leave a message to request an information pack.
You can also use this number to speak to a member of the Debtline team
Monday to Friday 9am to 9pm
Saturdays 9.30am to 1pm
Fax: 0121 703 6940
By Post: National Debtline, The Arch, 48 - 52 Floodgate Street Birmingham B5 5SL

Their website is excellent. You can:

• Download their information pack to deal with your debt problems.
• Use their personal budget section to work out what repayments you can afford.
• Use their suite of sample letters to write to your creditors.
• Visit their debt advice section to get information that may help you deal with your debt problem.
• Access their library of factsheets.
• For their website for England and Wales National see www.nationaldebtline.co.uk/england_wales/
• For Scotland, see www.nationaldebtline.co.uk/scotland/
• Debtline or you can email your enquiry to: advice@nationaldebtline.co.uk

Publications
Publications are free to individuals in debt. There is a charge to agencies and professionals of £5.00 per information pack and £18.00 for a full set of factsheets (minimum order £2).
To order, phone 0121 703 6913 or 0121 703 6914 or write to: National Debtline, The Birmingham Settlement, 318 Summer Lane, Birmingham B19 3RL. Invoices can be provided. There are discounts for bulk orders.

Here are the titles of some of the factsheets available:

• Bankruptcy
• Bailiffs and the Council Tax
• Harassment by Creditors
• How to Deal With Business Debts
• Credit Reference Agencies
• Time Orders in the County Court
• Negative Equity - What can I do?
• Administration Orders in the County Court
• Homelessness
• Mortgage Shortfalls
• How to Set Aside a Judgement in the County Court
• Magistrates Court Fines
• Charging Orders in the County Court
• Hire Purchase - What will we owe if the Agreement ends?
• How Can My Landlord End My Assured Tenancy?
• Interest Charges After Judgement
• Christmas Factsheet - How to avoid debt at Christmas
• Replying to a County Court Claim Form
• What to do About Debts When Someone Dies
• Attachment of Earnings in the County Court
• Water Rates - New rules
• Suspending a Warrant
• Reducing Instalments on a County Court Judgement

Consumer Credit Counselling Service CCCS
If you have debt problems, you're just a few clicks away from expert advice that could help you get back on your feet and on with your life.
CCCS is a charity, so you won't pay a penny for any of their services - whether you need immediate debt advice tailored to your situation or more budgeting advice. Whatever money worries you're going through right now, chances are they can help you - just as they have done for all kinds of people before you. Take a look around and see what they can do for you.
Freephone helpline on 0800 138 1111 is open from 8am to 8pm Monday to Friday.
Website: www.cccs.co.uk/

Write to:
Consumer Credit Counselling Service
Wade House
Merrion Centre
Leeds
LS2 8NG

The UK Insolvency Helpline
It works closely with the voluntary money advice sector and other organisations. It provides free, confidential and impartial debt advice and other support and solutions to those who are experiencing debt problems. It can provide continued personal support to you, assigning your to a case officer who is readily available to help with problems or concerns that may arise. This service is different to many others as it guides you from the start to a definite end to your debts with continued counselling. It is impartial, professional and free. It is paid by the companies to which you owe money and no fee is added to your accounts.

Who can apply?
Those experiencing debt, money or credit problems in the UK. You can either be a private individual or own a business. You can also be in a business partnership and there is also a special section for students.

How do I apply?
A standard assessment form needs to be completed in the usual way and sent to The UK Insolvency Helpline. On receipt they will contact you directly and conduct a telephone assessment of your circumstances. Please note that they will not leave a message if you do not take the call. These are professional people and will try to maintain your privacy. A strategy for addressing the problem would then be recommended. The UK Insolvency Helpline will normally contact the member within a day or two of the referral being made and it can sometimes be the same day. Alternatively the business or individual may contact a caseworker directly via the freephone number direct.

What does The UK Insolvency Helpline offer?

• Immediate advice to all clients.
• Ensures you understand the options open to you in order that debt-repayment programmes are realistic and achievable.
• Offers advice without asking for sensitive personal information.
• Provides continued personal support and advice, assigning each client a case officer who is available throughout the repayment programme for help with concerns or problems that may arise.
• Gives you a specific date by which you will have cleared your debts.
• Offers a nationwide network of support with home visits arranged in circumstances where this is felt necessary.
• Employs trained money advice professionals.
• Never takes any upfront fees and never issues an invoice to you.

Freephone: 0800 074 6918
You can speak to someone, ask for someone to call you back or request an information pack. This line is manned by trained staff from 8.30am to 6.30pm Monday to Friday. Outside these times there is an answering machine. Just leave your message or when requesting an information pack, leave your full address clearly.

You can write to:
The UK Insolvency Helpline, Administration Centre, 788-790 Finchley Road,
London NW11 7TJ

You can also email your request to info@insolvencyhelpline.co.uk

or

Fill in an online form with your details. Click on Financial form if you are employed/PAYE.
A consultant should then contact you within 48 hours. For other forms, please see the website
They have an interactive budget calculator to work out how much debt you are inand debt to income ratio.
Insolvency helpline website

Divorce Aid has worked with the UK Insolvency Helpline to produce a campaign called Debt After Divorce. We have also set up another website to help with debts and divorce. The UK Insolvency Helpline is currently reviewing its training procedures on debt and divorce after consultation with Divorce Aid. It is hoped that in the next five years the campaign will not only raise awareness but also provide a better service for those in debt due to a relationship failure. For more details, use the following link, www.debt-after-divorce.co.uk/

We look at the following issues:

• Are you liable for the debt?
• Look at your income
• Sorting Priority and Non-Priority debts
• Repaying Priority Items
• Repossession
• Non-Priority debts
• Putting together a statement
• Enforcement Action
• County Court
• High court and Magistrates' court
• In the long term
• DIY Financial Statement
• Pro-Rata Offer
• Contacting the creditor
• Offer of repayment
• Change of circumstances.

Citizens Advice Bureaux
For on-line advice and information, access the CAB Adviceguide website. For free and confidential advice, search the CAB directory for your nearest bureau. It includes advice by e-mail, text phone facilities, details on languages offered and specialist services. CAB websites also give information about local services. www.citizensadvice.org.uk

CAB give free, confidential, impartial and independent advice on a limitless range of subjects, including debt, benefits, housing, legal matters, employment, immigration and consumer issues. CABx are open to everyone regardless of race, gender, sexuality or disability. If you are seeking advice you can find on-line information at the CAB Adviceguide website. To contact your nearest CAB write, drop-in or telephone during opening hours. Some bureaux can offer advice by email if you are in their locality. CAB websites also give information about local services. CABx are only able to advise people who live in their local vicinity. Please try to contact the bureau which is nearest to you.

iVillage.com Debt Support Group
This is a forum for women if you are in debt and need emotional support from a non-judgemental group of members. It is American, so the laws over there will not apply to your case but this is a good place to air your problems and chat. Joining this will make sure that you don't feel so alone and talking online with a group will help you get to grips with your situation. We shall keep you posted if the British site adds this to their resources or you could alert us please.
See http://messageboards.ivillage.com/iv-mlsupport

Useful local services
You will find the following local agencies in your phone book:
Benefits Agency or Jobcentre Plus - see our Further help section
Law centres - these give legal advice on housing, welfare benefits, immigration and, sometimes, debt. These centres are not available in all areas; check www.lawcentres.org.uk for more details.

Welfare rights agencies - these are usually part of gov.uk websites. Example is www.camden.gov.uk

There is a lot of free and professional help available but you must make the first step. Ask for help from any of the agencies above. Please kindly mention Divorce Aid.

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