In our last post we distinguished the difference between priority and non priority debts. We will now look at one of Fair Money Advice’s clients who had both types of debt as well as a range of other issues. Sarah (not her real name) was referred to Fair Money when a concerned friend realised she needed help as she was struggling not only with debt problems but also mental health issues. Sarah was a single parent with a one year old and three year old and her income was solely from benefits, this is her story.
Initially it was hard for Sarah to even attend a consultation with one of our debt advisers due to her health issues. Sarah’s mental health issues meant she sometimes found it hard to leave the house and heightened her fear and expectations of bailiffs coming to her home so she would not answer the door. When Sarah did meet with one of the advisors, as has been the case with other clients dealing with debt, she had a number of letters she hadn’t opened because she was scared of her creditors. So the first step to help her deal with her situation was to open her letters to understand what her situation was.
Next, once our adviser was aware of all of Sarah’s debts they were split into priority and non priority to be dealt with. Priority debts included rent arrears, council tax, TV licence. It became clear that Sarah had fallen into debt because of her health which meant she faced difficulty in organising her life. For example her rent arrears were because her rent had gone up and she had failed to notify housing benefits of this so her benefits could also increase. Luckily her adviser was able to get backdated payments so that Sarah could settle this debt. Sarah’s adviser was able to set up repayments for her council tax debt also. Sarah had used a payment card to pay meaning she would have to leave the house to pay which was sometimes of difficulty to her now a direct debit had been set up. Through Fair Money Advice’s help she was also able to clear her TV licence debt and her adviser provided her with clarity where she once feared her letters were from bailiffs she was told they were just reminder letters.
Sarah’s non priority debts were from a payday lender, telephone and broadband provider and a mobile phone company. Her adviser was able to contact her creditors on her behalf and set up token payments so Sarah was left with enough money to provide for her two children. As well as this, Sarah was also given advice on budgeting to help her in the future for example to shop around for things such as utility bills to get the best deal.
Fair Money Advice also suggested to Sarah that she may be eligible for ESA benefits and that she should consider applying, however, this may be easier said than done. To set up a new claim Sarah would have to stop claiming income support and then wait for a decision on her new claim. This could potentially mean that Sarah could be without income for up to 13 weeks whilst they may their decision. The struggle doesn’t end there! To actually claim Sarah would need to ring and number of 0800 numbers further eating into her phone bill when she was in a difficult financial situation as it was. Sarah was made aware of an app should could get which would make these calls free to help her with her problem.
With visiting Fair Money Advice and starting to get her finances back on track Sarah is slowly but surely growing in confidence. This became clear with the number of people she began to refer to us who she had obviously shared her experiences of debt and with us where she once would not. She has said that she doesn’t like or want to be on benefits for the rest of her life because of the stereotype it creates and instead she would like a career in the future. Fair Money Advice will be there to help Sarah towards her dream by offering her support and guidance wherever they can.