Daytime TV and Debt

I was working from home recently and had the television switched on in the background. I don't watch daytime television often, but when I do there is something that really annoys me. Its the adverts for loan consolidation. They often go along the lines of consolidate your loans and agree one simple repayment. The problem is that often people do not see beyond the low payment, they just see that they are paying less each month. So whats the catch if your paying less each month. Well the answer is simple, the reason you are paying less is because the loan is over a longer time period. Often the rate of interest is no better, its often worse. So the end result is that you pay more over the longer term. 

What makes this even more appalling is that the adverts are shown during the day targeting the poorest in society, the unemployed. The other thing to be aware of are the number of Debt companies that offer Debt management. Your in arrears and a debt collection company is writing letters to you. So when you see an offer for debt management, during that period when you are vulnerable and stressed, the attraction of debt management, where someone looks after your debts and deals with your creditors is incredible. 

 Well before you take up this offer, bear in mind they are out to make a profit from you. If you go for the debt management option, you will often have to pay an upfront fee, often a few hundred pounds. The company then deals with your creditors and negotiate a monthly payment plan. You then pay a fixed fee to the debt management company who then process your payment to the lender. Sounds great in principle, but the debt management companies charge monthly fees. So for example, you could arrange to pay the debt company £50 per month. A nice, easy manageable figure, but the debt company may charge a flat fee of around £25 every month. So actually your creditor gets only £25. 

 I have worked as a doorstep collector and have seen loads of cases such as above. One company I came across would open a bank account for you. On the day your money came into the account they took their fee, took money to pay the creditor and left you with the balance. The fee for the bank account was £30 per month. There are ways around this. There are some organisations such as Payplan that will manage your loan for free. They do this because they are funded by the credit industry. They will assign a caseworker who will speak to your creditors and arrange a plan, then you pay Payplan and each month they pay the company. The cost to you is zero. You just pay off the loan. Lastly, I should mention debt collection agencies. These are companies appointed by your creditor to collect the debt. The interesting thing here is that by the time a debt goes to debt collection, the interest is normally frozen. 

So at this point, the debt collection company is looking to clear the debt as quickly as possible. They may offer a quick settlement figure, but for most, quick settlement is not an option, so they will offer an installment plan. Again, every penny goes towards clearing the debt as you are not paying fees. This can work to your advantage, as you are effectively paying off debt at 0% interest. Beware though that a settlement will knock some of the debt off (10 per cent is common) but it wont clear your credit file as the file will be marked as settled and not satisfied. If you are paying through a debt collection agency, you should aim to repay the debt as quickly as possible in order to restore your credit rating. 

 Don't think you can go on paying £5 a month on a £10K loan as your account will be reviewed every year and if your circumstances have improved, they will expect higher repayments. Whilst paying off more of a debt is not a bad thing, you need to ensure the repayments are possible. If you can't the worse thing you can do is say yes to a higher installment figure as you are not going to be able to sustain the higher repayments and will then start falling behind leaving yourself open to possible legal option. Finally, whatever your debt circumstances, there is always a way out. However you must be proactive and keep to any repayment plan. Seek informal advice via the forum that can be found here or consult a qualified debt adviser. Whatever you do, don't ignore letters, take positive action and I dont mean throwing them in a bin. Take on your debts and control them, not let them control you.

#debt #paydayloans

Child Benefit - Extra Cash for Parents

Are You Getting the Money You Should for Your Children?

Who qualifies for Child Benefit in the UK?

If you are in the United Kingdom, do you qualify for Child Benefit? Any person responsible for bringing up a child can apply for Child Benefit, provided the child is:

• Under 16

• Under 20, if they stay in approved education or training.

But you cannot apply for child benefit once the child hits their 19th birthday.  To receive it up to their 20th birthday, it must be in payment before the 19th birthday.

Can both parents claim Child Benefit for the same child?

Child Benefit can only be paid to one person per child. This means that two people can receive Child Benefit for two different children, but two people cannot claim for the same child.

Who Cannot Claim Child Benefit?

You cannot get Child Benefit if your child:

• Is in hospital or residential care for more than 12 weeks, unless you are still spending money on their needs.

• Is 16 or over, has left full-time education or training, and works more than 24 hours per week.

• Has been in prison or custody for the last 8 weeks or has been looked after by a local authority for the last 8 weeks.

• Is receiving any of the following benefits:

                Income-based Jobseeker’s Allowance

                Universal Credit

Tax Credits

                    Income Support

Employment and Support Allowance

• Is married or in a civil partnership, unless they are either not living with their partner or their partner is in full-time education or training.

If your child ceases to attend college, you must notify HMRC immediately. If you fail to do so, someone else may report the change, and you could be investigated for Child Benefit fraud.  At best you will have to repay the child benefit and you may also be prosecuted.

Do I need to repay Child Benefit over £60,000?

If you or your partner earns over £60,000 per year, you may be required to pay back the Child Benefit received. However, if there is a Child Maintenance case, you still need to claim Child Benefit. In this case, you can select the option to be a qualifying case while opting not to receive any Child Maintenance.

Additional Information on Child Benefit Eligibility

Child Benefit is a financial support payment provided by the UK government to parents or guardians responsible for raising a child. Payments are made every four weeks and are not means-tested, meaning most families are eligible regardless of income. However, those earning over £60,000 may be subject to the High Income Child Benefit Charge (HICBC).

Payment Amounts (as of 2024)

• First child: £24.00 per week

• Additional children: £15.90 per week per child

Who Can Apply?

• Biological parents, adoptive parents, and legal guardians

• Grandparents or other relatives (if they are the main carer)

• Foster parents (in some cases)

How to Apply

Applications can be made online via the HMRC website or by submitting a CH2 form via post. Processing can take up to 12 weeks, but payments can be backdated for up to three months.

If you or your partner earns over £60,000 per year, you may need to repay some or all of your Child Benefit through your tax return. The amount repaid increases on a sliding scale:

• £60,000 - £80,000: Partial repayment required

• £80,000+: Full repayment required
  
  Paying into a pension can reduce what you have to pay back.

When to Report Changes

You must inform HMRC if:

• Your child turns 16 and does not continue in education or training.

• Your child moves out of your home.

• Your child starts working more than 24 hours a week.

• Your income exceeds £60,000

What happens if I don’t report changes for Child Benefit?

Failure to report changes can result in overpayments, which may lead to an investigation for Child Benefit fraud.

HMRC Child Benefit contact number

• You can use Relay UK if you cannot hear or speak on the phone, dial 18001 then 0300 200 3100. Find out more on the Relay UK website.

  0300 200 3100

  Outside UK:
  +44 161 210 3086

  Opening times:

  Phone line opening hours are:

  Monday to Friday: 8am to 6pm

  Closed weekends and bank holidays.

Keywords:

• Child Benefit UK

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• Child maintenance

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Hashtags:

• #ChildBenefitUK

• #ChildSupport

• #HMRC

• #TaxCredits

• #UniversalCredit

• #ParentingUK

• #FinancialSupport

• #ChildMaintenance

• #UKBenefits

Typical Search Terms:

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