Housing – Priority Debts

The importance of treating housing costs as priority debts. Effective debt advice prevents homelessness.

9th January 2019 Nucleus Advice 

By Alan Murdie

It is over 10 years since Nucleus took the decision to specialise in debt advice, ahead of financial crisis of 2008 (then known as the ‘credit crunch’). Traditionally, housing was one of the key areas of the work for Nucleus, and over this last decade we have seen it evolve into an area of debt law where money advice is an integral part of the support and services provided to prevent homelessness.

Housing debt….top of the list and the bottom line

Debt is a multi-headed beast that blights lives of many in the UK. Its most serious effects arise when it causes homelessness, directly or indirectly.
As any money adviser worth their salt will state, housing costs – rent and mortgage payments – are the top priority which must be paid ahead of any other liability. Housing costs are the most important ones to meet. Falling into debt with these will put your home at risk. And if the roof above your head is lost all other debts and liabilities become irrelevant.

Advice that needs repeating

Although this may seem obvious, this is a lesson that needs repeating.
It’s not always grasped because losing your home appears initially to be a long drawn out process but one that progressively speeds up. Easy to miss a rent or mortgage instalment when stressed or ill, undergoing a family trauma or a relationship break-up. Unfortunately, housing debts soon increase, just as a car speeds up like a car careering down a hill. Putting a brake on this process and getting the
vehicle into reverse is what effective debt and housing advice seeks to do, to prevent the otherwise inevitable crash in the form of a possession order or eviction.

The bottom line is housing costs need to be paid first ahead of other debts.
….And creditors need to realise this too

It is a message that needs to be realised more widely, and not just those in debt. Creditors, both private sector and governmental need to recognise this too. One reason why people miss out on meeting housing costs and debts is often that they are being pressurised into making other payments – what debt advisers identify as ‘non-priority’ debts.

The message needs to get across to government departments, council tax collectors, fuel companies, credit controllers and debt collectors large and small that chasing non-priority debts too harshly may end up causing homelessness through mortgage or rent areas, with end result that they get no money back either.
The better-informed creditors and branches of local government realise this, as do the more responsible financial institutions, and some are taking positive steps. But the lesson does need to keep filtering down the lower levels of many organisations who communicate directly with debtors and ourselves when acting on behalf of our clients.
Misunderstanding of the debt law and procedures and often unthinking assumptions and even prejudice against debtors is still surprisingly widespread. Tackling these are among the many goals of Nucleus and Ealing Advice with our work in this vital sector in 2019.

New Year Clean Up

5 Ways to Clean Up Your Finances in the New Year

If you went over budget with your holiday spending or just want a better handle on your finances, the new year offers a great opportunity to take a closer look at your money habits and clean them up.

Making a few simple adjustments to the way you manage your cash — and your credit — can help you reach your savings goals, improve your credit and get you through the year without financial troubles.

Here are five ways to clean up your finances this year:

1: Get Your Budget On Track

Budgeting doesn’t always mean cutting out things you enjoy. Look at your budget as a plan or a tool that helps you track and monitor your spending, so you’re more aware of where your money is going and where you might be overspending.

Simply categorising your purchases can help you get a clear idea of your spending, so you can cut back as needed. If you’re not yet using a budgeting app, check out Mvelopes, Mint, or Acorns to help organise your money.

2: Start Tackling Holiday Debt

If you racked up extra debt over the holiday season, make it a priority to pay off some — if not all — of that debt as quickly as possible. Transferring high-interest credit-card balances to a lower-interest credit card can be a smart money move if you don’t think you can pay off those balances within a year.

If you pay more than the minimum amount each month, you can whittle down your balance more quickly — and hopefully before the next holiday season.

3: Make Smart Purchases with a Rewards Credit Card/ 0% Credit Card

If you have a rewards credit card, like the Barclaycard Arrival® Plus World Elite Mastercard® or the Barclaycard Visa® Apple Rewards, you can use it to spend strategically across certain categories to earn miles or points toward future purchases.

You don’t have to make major purchases to earn rewards — review your credit card terms to determine how much you can earn from different types of purchases.

Also you could look at cashback cards or a good 0% Purchase Credit Card

Check Your Eligibility Here


4: Prioritise Your Savings

If you didn’t meet your savings goal last year, or you just want to build up an emergency fund this year, create a plan to make saving money a bigger priority. Once you have a budget and know where your money is going, you can allocate some of your income toward savings each month.

Treating savings as an expense can get you in the habit of saving without really thinking about it. Choose an amount that works with your budget and deposit additional funds when you receive your tax refund, a bonus or another financial windfall.

5: Check Your Credit Report

Your credit score can be a fair indicator of your financial health, and reviewing your credit report can give you a chance to check for any suspicious activity. You can request a free credit report from Annual Credit Report.com and get your credit score from sites like Credit Karma for a snapshot of what’s happening with your credit.

Fix any errors, and continue to monitor your credit score throughout the year to ensure your credit isn’t compromised in any way.

The new year is the perfect time to check in on your finances and set new goals. Use these tips to get your finances on track and make the most of your spending — and saving — in the year ahead.

The new year is the perfect time to check in on your finances and set new goals. Use these tips to get your finances on track and make the most of your spending — and saving — in the year ahead.

Economy Energy Goes Bust

Ofgem’s advice to Economy Energy’s customers in the meantime, about what their next steps should be

What Should You Do Next, If You Are a Economy Energy Customer

Economy Energy , an energy supplier goes bust with about 235,000 domestic customers, has ceased to trade.

8th January 2019NucleusadviceC

Electricity and Gas Suplier goes bust.
Ofgem’s advice to Economy Energy’s customers in the meantime is:

  • Do not switch to another energy supplier.
  • Take a meter reading ready for when your new supplier contacts you.

For more info go to the Ofgem website