Families in Portsmouth area struggling with ‘£12m debts’, says city CAB service

An actor is a posed picture highlighting debt problems, which is on the rise across the Portsmouth area
An actor is a posed picture highlighting debt problems, which is on the rise across the Portsmouth area

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PEOPLE across the Portsmouth area are struggling with crippling debts totalling a staggering £12m.

Citizens Advice in the city says that more people than ever in Portsmouth and the surrounding areas are struggling with unmanageable costs.

The group has helped 1,686 people in the past 12 months.

In total, its specialists helped resolved 6,712 individual debts with a combined value of £12m.

Around £187,000 was written off for people through Debt Relief Orders, which work by pausing debts for a year so creditors cannot chase repayments.

Jo Reddin, business manager at Citizens Advice Portsmouth in Ark Royal House, Winston Churchill Avenue, said there had been an increase in the problem over the past 12 months – and she expected it to worse in the run-up to Christmas.

She said: ‘It seems like a staggering figure but people are struggling.

‘People try to muddle through taking out loans to cover loans but things can easily snowball.’

Jo said the centre, which has five specialist debt advisers, was preparing for a busy few weeks.

‘We’ve just seen the impact of the benefits cap, so we’re expecting to see more people in the coming weeks.

‘We’re recruiting an additional adviser to cope with the demand.

‘We envisage the debt figure will grow year-on year.

‘It’s an uncertain time for people with Brexit and benefits changes.

‘Student debt is another issue and people aren’t getting pay rises, while still having to do more with their money.

‘Christmas can be a problem time and we’re expecting to be snowed under in January.’

Jo added people were not prioritising debts, such as council tax, that could land them in court if they are not paid.

‘It’s about engaging before it gets to a critical level,’ she said.

‘If your finances are getting on top of you and you’re struggling to pay your debts it’s crucial you seek support right away.

‘We can help you work out what you can afford to repay, and negotiate with your creditors on how you will pay them.

‘We can also offer advice on how you might be able to make savings, such as switching to a cheaper energy deal or mobile phone provider.

‘What we do is offer early intervention and prevent people getting to the stage where debt has spiralled.

‘We want people to realise there’s no stigma attached to coming to us.

‘It doesn’t matter if it’s £1 or £100,000 – we’re here to help.’

It comes days after The News reported on the case of Karen Elstob, 53, of Botley Drive, Havant, who was jailed for not paying her council tax.

She had run up £3,600 in arrears between 2001 and 2007.

Portsmouth City Council said 81 people have suspended sentences over non-payment of tax.

Nationally, more people have been helped with a DRO since the amount of debt covered rose from £15,000 to £20,000 last October. For advice on managing debts, contact the Debt Team at Citizens Advice Portsmouth on (023) 92855 855.

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CASE STUDY

A MAN loaded with £13,000 worth of debt has told of how he ‘buried his head in the sand hoping it would just go away’.

The resident worked full-time but struggled to pay off credit cards, loans and a bank overdraft.

He finally sought help at Citizens Advice Portsmouth at Ark Royal House, in Winston Churchill.

The man informed the bureau that he had a number of debts including a ‘priority debt’, council tax. Due to the level of debt involved, a bailiff had been tasked to get it back.

The bureau says the man had failed to contact the local council and was ‘too worried’ to contact the bailiffs, which resulted in the council tax debt being referred back to the courts for further action.

Further enforcement action for non-payment, refusal or unwillingness to pay a Council Tax debt can result in a prison sentence.

As the customer was working full-time, he was not entitled to any benefits to help improve his situation.

He admitted to having a ‘head-in-the-sand attitude’ towards his debts and hoped they would go away.

He sought help at the bureau in the hope of coming up with a manageable plan after being contacted by bailiffs who demanded ‘large unrealistic repayments’.

The customer was assisted with a budget sheet and based the information provided, he qualified for a Debt Relief Order (DRO).

It’s a low cost alternative to bankruptcy and you don’t pay anything towards your debts for 12 months - and after that they are written off.

The customer wanted to pursue this option and was referred to an advisor, before his application was given the green light and £13,000 worth of debt was cleared.

GUIDE TO GETTING HELP

HERE is the Citizens Advice Portsmouth guide to sorting out your debts:

n Work out how much you owe – make a list of the companies you owe money to, and add up how much they’re asking you to pay each month.

If you don’t have your most recent statements, contact the company to find out what you owe.

n Identify your priority debts – your rent or mortgage, gas and electricity and council tax are called priority debts as there can be serious consequences if you don’t pay them. These should always be paid first. Separate these out and work out how much you owe to each.

n Work out how much you can pay – create a budget by adding up all your essential living costs like food and housing, and taking these away from your income.

Any money you have spare can be put towards your debts.

n Paying urgent debts – you may have several priority debts and can’t pay them all.

n Contact all your creditors to find out if you can negotiate on how much you pay, or when you pay them.

You will get an impression of who needs paying now, and who is prepared to wait.

Always pay priority creditors who are taking action against you first.

n Paying non-urgent debts – if you have any money left over after paying priority debts, you could consider getting a free debt management plan.

You’ll make one monthly payment to the plan provider, who will handle paying your creditors. Alternatively, contact your creditors and offer them what you can afford to pay.

n If you can’t pay your debts – check your outgoings and see if you can make savings.