Tory Majority Day 81: Finances, Specifically To Do With Low Income, Housing Benefit and Private Rented Housing

There are so many strands of thoughts that have been running around my mind for the last week or so and almost as many potential blog posts.

This one will be about finances. It won’t be the last, partly because it’s such a BIG subject that it won’t all get down in one post.

Anyone who has ever moved home knows that it is expensive

If you’ve bought your own home there’s the costs involved and if you are renting, there are costs too. They aren’t as large as a house purchase but they are extremely important if you are in receipt of housing benefit because if you are on a low income, you have got to find the money to move from somewhere.

In my case there are added complications because when I first became ill with CFSME, I had debt.

It was the usual credit card stuff that people rack up when they are salaried and don’t even think about but after I went onto Employment and Support Allowance I couldn’t afford to keep up the payments. This was all going on while I was first off sick with CFSME and was a real added stress, thinking about how to deal with it.

CAB advice and bankruptcy

I went to the Citizens Advice Bureau and talked to them about going bankrupt with a Debt Relief Order. I thought it would be the easy way out of the financial pressure I was under.

I went quite far down the process. Basically it meant I had to detail my debts and to who, then they would act on my behalf.

They told me I had to pay about £100.00 to make it happen. They told me it was very common to do this in my situation. Money would be taken regularly out of my account and in a year my bankruptcy would be over. However they also said that it would remain on my credit file for 6 years.

Something inside me told me to stop with the process at that point

I was very nervous about going ahead with it. I am single and having rented so many times, I thought that having a Debt Relief Order would prevent me from passing the credit checks that estate agents do on behalf of landlords, or any sort of accounts like bill payments, for instance.

Plus, at that point and because no health professional has EVER discussed a prognosis with me, I assumed I’d be on a path to recovery and back in the workforce before too long. Ha ha ha.

( Why oh why oh why didn’t I pay these things off when I had the chance. This is such a regret.)

I needed a temporary solution 

I negotiated with each of my creditors to have a credit agreement instead.

I could have gone through an organisation like StepChange to get a Debt Management Plan, but when I phoned them up, they told me that even though I was on ESA, the amount I could afford wasn’t enough and the creditors wouldn’t accept it.

I felt they were totally unsympathetic to how little money you have to live on when you are on ESA and were looking to their own percentage. I never called them back.

Do It Yourself 

This meant that I had to write or phone each and every one of my creditors, provide them with an income and expenditure form showing my incomings and outgoings and a copy of the letter from the DWP that says I was in receipt of ESA as well.

The CAB had provided me with a standard letter that I used to show I’d approached them. This helped as the creditors took that as a sign that I was doing things properly.

Most of them eventually agreed, so I pay amounts like £1.00 or £2.00 to them monthly out of my ESA towards paying off the debt. At that point some of them decided to pass my debt onto debt collection agencies. At that I was frankly horrified but after reading a lot on the internet about how they operate, I relaxed. This isn’t the worst thing in the world.

Unfortunately all this didn’t happen before a default was registered against me by Barclaycard. That default will also remain on my credit file for 6 years until / unless the debt is paid off in full. Ha ha. I don’t have the money for that!

Thinking about Debt Relief Order again

If and when I move into the new flat, I will seriously think about doing the DRO again. I want rid of the debt I’m in and as I’m not back in the workforce yet ( more laughing ) I think it might mean that it’s a better idea than struggling along with it.

Credit referencing with the house move 

I still haven’t had the final say-so with the ideal flat. They are in referencing stage. Last week I went to and fro about talking to the estate agent about my credit card default. I didn’t know what to do for the best – fess up in case it came up in my credit check or not.

I had that awful sinking anxious feeling that you get when you know something you’ve done way in the past might catch up with you and screw up your hopes and plans.

Eventually I decided I had to tell the estate agent. They took it on board and came back to me the next day, saying that they didn’t think that it would show up.

OK. My reference is complete but I haven’t had feedback yet because they are referencing my guarantor so I don’t know if it will affect me. 😦

It could all still not happen so I’m not celebrating yet.

 

Where do you get the money to move from? 

Housing Benefit is paid at the END of the month you are claiming for. So if you are moving, you can rely on one final payment of Housing Benefit after you’ve moved out if you are having a break where you don’t pay rent, like I am.

In my case I had some money from my previous landlord as well and written agreements from various people I know to lend me small amounts to make up the whole.

Won’t the Council help? 

No – my local Council  has no facility to lend money to people in receipt of benefits the amount of money necessary to cover a months deposit and a month’s rent in advance. There are no charities out there who can lend it to you either.

In other Council’s ( so I read ) they WILL lend you this money so how my local Council can decide not to is beyond me??!!!

This contributes to the housing crisis 

If you have no credit, a poor credit history or no facility to borrow it will TRAP you in properties because you are simply unable to find the finances to move.

Even if you found somewhere else to live and you are on Housing Benefit, you won’t be able to move because you can’t get hold of the money to make that happen.

This can’t be right, can it? I find it incredible that for people living in poverty and low cost, low standard housing, if they find somewhere to live they can’t do that because their local Council can’t use their Discretionary Housing Payment scheme towards advance fees.

That is so, so wrong. Surely that’s against the purpose of the DHP scheme isn’t it?

© Lindy 2015

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