Debt Advice

The advisers at Citizens Advice Jersey are able to help you with debt and this will include things like:

• checking you are getting all the benefits and allowances you are entitled to;
• getting a clear picture of your income and expenditure;
• advising on priorities and negotiating payments;
• advising on procedures and options available to you.

Some advisers specialise in debt work but, in all cases, dealing with debts successfully depends on:

• complete information about how many debts there are and who the money is owed to;
• realistic assessments of your income and expenditure;
• communication with creditors at each stage.

Trying to pretend some debts don’t count or can be dealt with differently will only add to the problem in the long term and makes things more complicated.

The links in the text below take you documents that you can download or print out and fill in.

Try to take things step by step. Dealing with debts can be divided into four main stages:

• Working out your income and expenditure
• Working out exactly how much you owe, to whom and identifying priorities
• Working out how much to offer to creditors
• Negotiating payments.

This can involve a lot of calculations and writing letters, and if you cannot manage it yourself, we are here to help you. It is important that you realise that by offering reduced payments to creditors, your credit rating my be adversely affected.

Personal Budget

The starting point for dealing with all debts is to prepare a Financial Statement. Although it can be difficult to complete fully at first, it is very important to get it right. This means checking statements or contacting all the creditors for full details of what is owing. You may want to use the Holding Letter to do this.

Use the Financial Statement to work out your total weekly or monthly income and expenditure.

• Don’t be tempted to cut back on basic things like food, clothes and heating
• Do allow something for emergencies
• Do make sure all the figures are either weekly or monthly

You can use it:

• to see how much money is coming into your household
• to see how much money is going out
• to work out offers to creditors which you can afford
• to plan your future spending.

We are here to help if you are having any problems with completing the forms. The office is open Monday to Friday 10 am to 3 pm

Tel: +441534724942

Tel: +44800 735 0249
Email: advice@cab.org.je

The next stage depends on the amount left over when you have subtracted your expenditure from your income. If there is nothing left, you may want to come back to us for advice.

Priority Creditors

Some debts are more important than others because the law gives different creditors different ways of getting their money back, so these should be dealt with first.

• Your mortgage or rent must be your main priority
• If you don’t pay your Parish Rates bill or Income Tax bill, you could end up in the Petty Debts Court or Royal Court
• It is very important to make arrangements to settle these debts first
• But don’t panic with any of these debts. You will be given warning and providing you act quickly enough it is nearly always possible to stop these things happening. Start by contacting these creditors to tell them you have money problems and if you can, pay something now.

If you feel you cannot manage alone, contact us for further help.

Other Creditors

After paying your expenses and making arrangements to pay priority creditors, there may be nothing left to pay other creditors.

If you have nothing left, say so.

Show your creditors by sending them your Financial Statement and an Offer letter to back this up.

If you have something left, the best way to divide it amongst your creditors is by pro-rata distribution. This is how the court would do it and means all your creditors get a fair share.

If some creditors don’t agree to your offer at first, don’t give up. Write back to them and if one or more creditors have agreed to your offer tell them this.
If a creditor has already taken you to the Petty Debts Court, you should include the weekly payment (wage arrest) under Priority Creditors.
If the creditor refuses to stop interest charges you can try to persuade them by saying the payments are conditional on this.

If any of this is confusing or you would like some more guidance, please contact us.

We can help you compose the letters, negotiate with creditors, do the calculations, etc.

Tel: +44800 735 0249

This has explained the main procedures used to manage debts. If you feel you can manage with this information, you may not need further help. We do know it can be difficult, so don’t hesitate to ask us if you need more help and we will do whatever we can.

The help we give also depends a lot on you doing what you can.

Once the full situation is explained to your creditors, with all debts and information relating to your circumstances being clear, you are halfway there.

Creditors do not have to accept your offers of repayment or freeze interest but may still seek full repayment by issuing default notices, sending the account to a debt collection agency or in the last resort, taking legal action.

Many creditors will accept reasonable offers of repayment and agree to lower if not always freeze interest charges when they are made aware of your full situation.

How to do a pro-rata distribution to other creditors

Don’t worry if your offers look very small. Remember your creditors would rather you pay a small amount regularly than make promises you can’t keep to.

• Make sure you have all the information on exactly how much you owe each creditor.
• Add up the total.
• Multiply each individual debt by your money available for other creditors figure.
• Divide that by the total amount owed to find to how much you should pay each creditor.

For example, if you owed:-

ABC Catalogue Co Ltd £268
Bank Trust & Savings Co £1,960
Flexible Bank Card Plc £825
Easicheck Financial Services £265

£3,318

And you could afford to pay £20 per month in total, you would multiply each individual debt by your figure (£20), then divide that amount by the total amount you owe (£3,318).

ABC Catalogue Co Ltd
(£268 x 20 = 5,360) then (5,360 ÷ 3,318 = £1.50)

Bank Trust & Savings Co
(£1,960 x 20 = 39,200) then (39,200 ÷ 3,318 = £12)

Flexible Bank Card Plc
(£825 x 20 = 16,500) then (16,500 ÷ 3,318 = £5)

Easicheck Financial Services Ltd
(£265 x 20 = 5,300) then ( 5,300 ÷ 3,318 = £1.50)

Round the figures to the nearest 50p. If you have problems with this or things are not working out, come back to us for further advice.

Sample Letters and Forms to Assist you

Sample Letters

The two letters can be used as a guide for contacting your creditors. Use the appropriate letter and make any other changes you need to explain your situation to your creditors. Any unusually high expenditure figures in your Financial Statement should be explained in your letter to creditors.

Holding letter
Offer letter

Sample Forms

These forms are to assist you, only the Financial Statement is sent to your creditors

Form to keep a record of your work
Creditor list
Financial Statement