Your first home can bring debt problems.
Nigel had recently moved out of his parents’ home and was living independently for the first time. He had no experience of managing a budget and paying bills and was struggling to do so on his low income. He quickly fell into arrears on his water bill, council tax and rent. If this continued, Nigel would not be able to continue to live independently.
In addition to these debts – which we call ‘priority debts’ - Nigel also owed some money to other creditors for ‘non-priority debts’. Realising that things were getting out of control, he contacted us for advice and support.
Deficit Budgets and Income Maximisation
We completed a financial statement with Nigel, going through his income and expenditure with him in detail. We identified that he had a deficit budget – he was spending more than he can coming in - even though his spending wasn’t excessive, and that he simply needed further support.
We explored income maximisation options with Nigel, trying to make sure he was receiving all the money due to him, and that he was informed about ways he could save money. This led to us helping him to apply for a discretionary housing payment to cover the shortfall on his rent. We also assisted him in renegotiating a partial write-off and lower repayments on his council tax arrears debt.
We also made an application to Northumbrian Water’s Support Plus Scheme to reduce Nigel’s water tariff and manage his arrears. With our intervention, his remaining creditors were sent moratorium letters and his accounts put on a temporary hold while he focuses on priorities.
We helped Nigel reach a balanced budget and improved his financial literacy. Being able to manage his money is now allowing him to focus on finding work. Due to our negotiations, his council tax and water arrears were partially written off and his rent arrears were reduced with a discretionary housing payment. As a result, Nigel has been able to continue living independently in his own home.