Annual Report 2001-02
Credit Repair - Or Debt Despair?
With advertising tempting to take 'EXTRA CASH WHEN YOU NEED IT', 'LOANS FOR ANY PURPOSE', 'NEED A FAST LOAN?' or 'INSTANT CAR CREDIT', it's not surprising that we are seeing an increase in the number of people seeking advice when they cannot maintain repayments to creditors. Apart from personal loans there has been a dramatic increase in credit card spending, with Britons having 32 billion pounds of credit card debts.
Last year North East Derbyshire Citizens Advice Bureau negotiated debts of over 2 million pounds.
One much advertised way of dealing with debt is to employ a fee charging debt management company. It seems every television commercial break highlights how Mrs. X reduced her monthly outgoings to a fraction of the expected repayments (enabling the purchase of a new car - on credit!).
What many fee charging companies omit to make clear to clients is that it is not the debt that is being reduced. By reducing monthly repayments it simply lengthens the term of indebtedness. For example, we were approached for a second opinion when a client had used such a company for 18 months, paying 15% of the monthly payment in fees, to find that the debt had risen from £10,000 to £17,000. Another client had paid £600 (borrowed from family) for advice with his debts of £48,000. For his fee, the client was referred on to an insolvency practitioner for an individual voluntary agreement. Any good debt management company, free or otherwise, should have known that being unemployed with no surplus income at all, he could not take advantage of such a procedure, the client was referred by the insolvency practitioner to the CAB!
The above case goes to show that 'you only get what you pay for' is not necessarily the best option.
Quality Marked Service
The Quality Mark is a quality standard for information, advice and specialist legal services.
The standards which make up the Quality Mark are designed to ensure that a service is well run, and has its own quality control mechanism that monitor the quality of the information, advice or other help provided.
N.E. Derbyshire CAB has a Quality Mark for its general advice and casework in debt and welfare benefits and a provisional contract to provide its casework at a specialist level.
All our work is audited at the appropriate level by the Legal Services Commission.
The Bureau continues to deal with a growing welfare benefits caseload. With an additional caseworker, thanks to our CLS contract, the volume of welfare rights work we undertake has increased and no doubt will continue to do so in the next year.
You are long term sick and your doctor says that you will not work again. There is nothing that can be done by way of further medical treatment. However you have recently been for a medical examination at the local DSS and they say you are fit for some kind of work (not specified, of course). What do you do? Should you go and sign on, will this affect your argument that you can't work? Why should the medical examination apparently involve some form of points system?
This is another common enquiry and proper advice is vital to any successful challenge.
Claiming Housing Benefit
We have helped to produce a leaflet which guides people through the potential hazards of claiming housing benefit. This leaflet, jointly sponsored by Citizens Advice and Shelter is available in all Midland Bureaux.
If you have had any experience of the benefits system, you will be aware of its complexity. There are myriad benefits with complex qualifying conditions. It is not, perhaps, surprising then that claimants seek independent advice from the commencement of a claim through to challenges of adverse decisions. Rules governing entitlement change all the time, adding to claimants' uncertainties about their rights.
Enquiries principally concern means-tested benefits and those concerned with the claimant's ill health. It is clear that there is still significant under claiming in means-tested benefits, probably due to ignorance about the relevant income and capital thresholds, but also due to the complex nature of the various rules. As for the various disability benefits, claimants not only have to deal with difficult qualifying rules but the vagaries of the relevant medical examination systems as well.
Say that you get disability living allowance for your child. You need that benefit because you cannot work. The claim comes up for renewal and suddenly you lose some £20 per week of your benefit. A person in a remote decision making centre, says that your child's condition has improved. They should come and live in your house for a few days you say and then they would know the truth of the matter. In practical terms what do you do? Should you try to get some evidence from your doctor? But apparently the DSS have ignored the last doctor's letter. You only have a month to appeal and at least a week has gone by.
Again this is all too common. Specialist advisors will deal with all the aspects of such a case; obtaining further evidence, looking at the reasons for decision and representing the claimant at any subsequent appeal.
The Bolsover Project
The Bolsover project, originally funded by the Coalfield Regeneration Trust (CRT) has advanced considerably and we now provide a comprehensive debt and income maximisation casework service for Bolsover residence via weekly outreach sessions at a number of G.P. surgeries in the area, we also conduct home visits for clients with special needs. We would like to thank North East Derbyshire Primary Care Trust, doctors, practice managers and staff at the surgeries for their support and assistance.
The CRT grant ended at the end of May but thanks to a partnership between the North Eastern Derbyshire Primary Care Trust, Derbyshire County Council Social Services, Bolsover District Council and our National Association, the work will continue through the G.P. surgeries, this work is being complimented by our CLS franchise which is enabling us to provide our service through a number of community projects.
The need for a money advice service in the Bolsover communities is not in doubt. The area has suffered with the decline of the mining industry, with poverty and deprivation levels amongst the highest in the country. With poverty comes vulnerability and the pressure to borrow to escape exclusion from our consumer led society, or in times of hardship is difficult to resist. Loan companies charging high rates of interest who incorporate doorstep collection with selling must bear some responsibility. However debt can affect anyone for various reasons, illness, redundancy, business failure, separation, living on benefits, hidden charges, plus many more and the worry of debt can cause health problems and contribute towards relationship breakdown.
Social Policy
This year we have generated a lot of evidence about the difficulties experienced in the former coalfields area. Our debt teams have highlighted issues regarding debt management companies and doorstep selling techniques. We submitted our evidence to Harry Barnes M.P for him to feed in to the Standing Committee looking at the Enterprise Bill which aims to tackle these issues.
We have also looked at the practices of solicitors who, despite being able to access DTI money specifically allocated to help ex-miners claim compensation for industrial injury, are charging the individual claimants.
To date we have dealt with hundreds of enquiries from all ages, some complex and involving serious illness. We have handled in excess of £300,000 of debt covering areas such as mortgage, rent, council tax, hire purchase, bankruptcy, repossession, fines, gas, electricity, including problems changing suppliers, water, credit cards, loans, mail order, court representation, negotiation with bailiffs and many more. We have been successful in obtaining financial help for our clients through charities including many successful applications to the Severn Trent Trust Fund with one client being awarded £970 Another client was awarded £1150 by an armed forces charity.
Income maximisation is an important part of money advice and we have been successful in gaining benefits worth thousands of pounds for our clients in Bolsover including a compensation award of £1100 for one of our clients.
It's Fun To Volunteer!
Do you like meeting people? Have you a few hours per week to spare? Why not consider joining our team of dedicated and enthusiastic staff. All our volunteers enjoy the variety and scope of the work we do and gain a tremendous amount of personal satisfaction in being able to help people.
Training
We are now training our third batch of volunteers undergoing the competences based programme.
Each time the experience is different and rewarding. We have had a bumper crop of recruits and currently have five people as trainees, two trainee advisers have just been awarded the Citizens Advice certificate in advice work - well done!
Another Busy Year
The workload of the bureau continues to grow with some 7845 requests for help bringing about over 14,000 enquiries.
With our CLS contract in place and further project work in hand we have already seen a large increase in our workload for the first few months of the new year.
From The Chair
Looking back over previous reports I always seem to be reporting on a busy year for the bureau and this year is no exception. I am pleased to be able to report that the bureau has been awarded a provisional contract by the Legal Services Commission for the provision of Debt and Welfare Benefits casework at the specialist level and congratulations are therefore due to all those involved.
Reported elsewhere is that the Coalfield Regeneration Trust funding comes to an end in May but as that door closes another opens and I am pleased to report that a recent bid to the Children's Fund has been successful - more of which can be found elsewhere in the report.
As in previous years I am immensely impressed by the hard work and commitment of all those involved with the work of the bureau and I need to record my thanks to all of them.
I need also to thank the various funders - to North East Derbyshire District Council who continue to ensure a core service on which the bureau can build, to the Legal Services Commission, to the Coalfield Regeneration Trust and to the Parish and Town Councils.
I know that the next year will bold new challenges but no doubt the bureau will meet them with their usual commitment and I look forward to reporting on partnerships old and new next year.
Last updated: March 15, 2007