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SHOPPING SPREE: but the moment of reckoning will come and often even
people in well-paid jobs can't cope with the bills |
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mike dailly of govan law centre |
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THE shops are full and the tills are ringing madly. However,
there's a downside to our multi-million pound spending spree at this
time of year as many of us may struggle to pay off all the subsequent
bills. Here, Govan Law Centre's principal solicitor, MIKE DAILLY, who
drafted the Bill that abolished poindings and warrant sales, offers
advice on how to avoid being mired in festive debt.
PERSONAL debt meltdown can affect anyone, whether you are in benefit
or in a well-paid job.
How do you buy presents for your family and friends at Christmas, pay
for all the festive food and drink, and still meet all of your bills?
The basic advice may seem obvious: don't go daft. Shop sensibly, look
for discounts and bargains. Work to a budget.
If you are really short of money, don't rob Peter to pay Paul. If you
do, make sure that Peter is not your mortgage lender or your landlord.
Cautionary tales abound. At Govan Law Centre in Glasgow a woman came
in to tell us she'd received a writ for repossession of her flat. Her
income had dropped because she had been ill.
Though she had been missing her mortgage payments in order to meet
car and other loans, we were able to prevent repossession under the
Mortgage Rights (Scotland) Act 2001.
The roof over your head should come first when you are prioritising
debts. Help is available free in Glasgow from local law-centre
solicitors and money advisors. It's never too early - or too late -
to get help.
Avoid, too, throwing away money on rip-off charges and interest.
Pay-day advances, for example, easily available across Glasgow come
with charges of 25% ... an average percentage rate (APR) of fully 300%!
Borrowing money on a credit or store card is generally very
expensive. Initial interest-free periods can revert to rates of
between 12% and 22% APR.
Approaching a bank for a loan is always better, with many personal
loans coming in as low as between 6% and 8% APR. But if you are
broke, or have a poor credit rating, you won't get an affordable bank loan.
One of the fastest-growing markets in the UK today is adverse credit
lending. Lots of firms offer "easy" credit at
rip-off interest rates. They will tempt you to consolidate all of
your debts into one, apparently easy, monthly payment.
One couple in our files saw one such advertisement on TV and signed up.
However, when the husband was medically retired from his job, he
couldn't afford the consolidation payments. The loan company had no
hesitation in taking the family to court.
Because these loans are generally "secured" on property,
the couple faced the catastrophic loss of their home.
Govan Law Centre was able to stop this but it's difficult to get
someone out of an expensive credit agreement.
If you can't access low-interest borrowing, consider joining a local
credit union. There are many in Glasgow, lending money at a
reasonable rate.
Many people take out insurance policies when they borrow money. These
are meant to meet your loan payments if you fall ill or lose your job
but many of these policies have more get-out holes than Swiss cheese.
Regularly, insurers wrongly refuse to pay out on policies.
One woman stopped working after suffering a heart attack. She had a
loan protection policy with a major high-street bank, but it refused
to pay out because she had failed to disclose that she suffered from
spondylitis, a rheumatic disease, when the policy was taken out.
The spondylitis was irrelevant to why she stopped working.
The firm reviewed its decision, and paid out.
If your income drops, or if you lose your job, contact Glasgow City
Council's welfare rights department. It can help you obtain the right
benefits, and represent you at the social security appeal tribunal.
Don't wait until the sheriff officers are knocking on your door
before you seek help. Don't be embarrassed. We're all in debt.
There's always a range of options , whether it's lodging a 'time to
pay' application, or opposing the proceedings.
Next year the Scottish Executive introduces its debt arrangement
scheme, making it easier for people with multiple debts to regain
control of their lives.
Thanks to Glasgow City Council, debt advice is free.
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Where to get advice if you can't keep up those payments
Places offering free help on debt in
Glasgow include:
•Govan Law Centre, 47 Burleigh Street,
Govan, Glasgow, G51 3LB. Telephone 0141 440 2503; website: www.govanlc.com
•Legal Services Agency, 3rd Floor, Fleming
House, 134 Renfrew Street, Glasgow. 0141 353 3354.
•Ethnic Minorities Law Centre, 41 St
Vincent Place, Glasgow, G1 2ER (languages spoken include Punjabi,
Urdu and Chinese) 0141 204 2888.
GLASGOW CITY COUNCIL CONSUMER AND MONEY ADVICE:
Consumer Advice Centre, Consumer and Trading
Standards, Glasgow City Council, 231 George Street, Glasgow, G1 4RX.
0141 287 6681.
Debt Counselling/Money Advice Service, Consumer
and Trading Standards, Glasgow City Council 231 George Street,
Glasgow, G1 4RX. 0141 287 6681.
MONEY ADVICE ORGANISATIONS:
Money Matters Money Advice Centre, 986/988
Govan Road, Govan, Glasgow G51 3DU. 0141 445 5221.
Glasgow City Council also helps with benefits:
Welfare Rights Team, Glasgow City Council, Social Work Services, Nye
Bevan House, 20 India Street, Glasgow. 0141 287 8700.
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