Who's afraid of the big bad bailiff?

Similarly to the arrival on the doorstep of hit man Martin Q Blank in the film “Gross Pointe Blank”, if a bailiff turns up at your door, the chances are you did something to bring them there.

What is a bailiff?

A bailiff is authorised by the court to collect monies owed, generally following a court order, and they are authorised to remove and sell a company’s or a person's possessions in order to repay the monies owed.

There are different types of bailiff such as court bailiffs, certificated bailiffs and private bailiffs. For more detailed information concerning the differences between a bailiff and an enforcement officer, you may wish to check Her Majesty’s Courts Service.

Debt collectors are not court officials and they do not have the same powers as bailiffs. Debt collectors cannot enter your home or company premises or seize your possessions. However, they must adhere to the Office of Fair Trading debt collection guidance.

When will creditors employ a bailiff?

A creditor may make a claim against you in the County Court, know as a County Court Judgement or CCJ. The issue of a CCJ requires you to repay the debt.

A bailiff may be employed to help recover the debt if the creditor asks the court to issue a “warrant of execution”. Often HM Revenue & Customs or the Local Council Tax department may send a bailiff to recover monies owed to them.

In the case of commercial rent, the landlord does not require a court order to recover the monies owed. A certified bailiff can collect the monies owed on behalf of the landlord by “levying distress”.

Bailiffs are human, too, and simply trying to do their job. However, if you don’t know what their job is all about, you may inadvertently leave the door wide open to them …..

Can bailiffs force entry?

Bailiffs can call at any time of day or night, but they usually keep reasonable hours, for example between 8 am and 8 pm.

A bailiff is not permitted to force entry past you, prevent you from closing the door or walk in as soon as you open the door. Bailiffs do not have automatic right of entry unless you invite them in.

So, they may huff and they may puff but they can’t blow your house down.

You should note that any person can permit entry to a bailiff; they don’t have to be a person of authority or the indebted party.

Once a bailiff has been granted entry, they have made “peaceful entry” and can enter the premises on subsequent occasions through the use of “reasonable force”.

Peaceful entry can also be gained through an open door or window so ensure that premises are kept secure at all times.

You may be surprised to know that if commercial rent is owed, a bailiff can lawfully break in to the premises and change the locks, known as “forfeiture”. This is not the case for unpaid residential rents.

Additionally, bailiffs trying to recover money owed to HM Revenue & Customs are permitted to break into your property, provided that they have a magistrate’s warrant. Furthermore, bailiffs recovering unpaid magistrates’ court fines do have the power to force entry.

For every visit, the bailiff’s fee and expenses will be added to the debt that you owe. You can ask for details of these fees at any time and you are permitted to dispute them.

Dealing with bailiffs

If a bailiff pays you a visit, you may want to consider negotiating payment of some or all of the debt so that they don’t take any of your possessions. Subject to legal and contractual restraints, bailiffs may be able to negotiate settlement of the outstanding sum. However, you should only enter into negotiation and make an agreement if you are able to stick to it.

If you make a payment to the bailiff, make sure you are given a receipt.

If you are unable to pay the debt and the bailiff is required to seize your possessions, they are not permitted to take essential items such as clothing, bedding, cookers, fridges, most furniture and tools of your trade. Items considered to be non-essential including televisions, motor vehicles, or garden equipment, may be taken in consideration for the debt owed.

Sources of advice

If you have received a visit from a bailiff or are struggling to repay your debts, you may wish to contact one of the following organisations:

Community Legal Advice
Citizens Advice Bureau

Or perhaps a specialist insolvency firm or debt adviser such as:

Chamberlain & Co
The Debt Helpline

Death on Credit*

When you think of vampires, you may conjure up an image of an evil spirit from Transylvania, who stalks the night sucking the blood out of its living victims. If you don’t believe in vampires, I am sure you will be familiar with the all too real leeches, although hopefully not intimately familiar! These vampiric worms suck blood and even eat flesh.

But what do vampires and leeches have to do with debt?

I came across a couple of debt forums recently which made reference to the aforementioned blood sucking fiends (Debt Questions and Parents Centre).

You see, while we know leeches definitely exist, vampires may not just be a figment of an overactive imagination. The term can be used to describe a very real, predatory person, somebody who preys on other people for financial or emotional gain. Parents Centre goes a step further comparing debt collection agencies to vampires in that you have to invite them in first before they can get their claws into you.

As for preying on others for financial gain, you will no doubt be familiar with the complaints against banks in respect of unfair bank charges. The courts and the Financial Ombudsman Service have received tens of thousands of complaints that unauthorised overdraft charges and returned item fees on current accounts are unfair. If you are already teetering on the edge of the abyss that is debt, the addition of bank charges onto your already overdrawn bank account makes it more and more difficult for you to get yourself out of debt.

Fear not, there is light at the end of the tunnel and no, it is not the burning torches of an angry mob seeking out your bank manager’s crypt.

If you are having difficulties as a result of bank charges, a good place to start is the Office of Fair Trading.

If it is not just bank charges that are giving you nightmares and the spectre of debt is constantly looming over your shoulder, then you may wish to talk to an experienced debt advisor such as the experts at The Debt Helpline.

An experienced debt advisor will take all your circumstances into consideration before explaining the various debt solutions available to you to help you rid yourself of what can seem like the scourge of your every waking moment.

There is more than one way to skin a cat and a good advisor should provide you with information about the following:

Individual voluntary arrangement or “IVA”
Debt management plan or “DMP”
Bankruptcy
Consolidation loan
Remortgage
Informal agreement

Beware of allowing yourself to become spellbound by a particularly persuasive practitioner in the art of debt management and don’t make your decision until you have weighed the advantages and disadvantages of all the options appropriate to your circumstances.

While it may seem like banks, credit card companies and other financial institutions are unfeeling, soulless entities, bleeding you dry of your funds and your resolve, you are not alone and there is a support network out there to help you move out of the shadow of your debt and into the light.

*(Mort à Crédit, French novel by the author, Céline).

TEACHERS IN DEBT

We are all feeling the effects of the UK credit crunch, prompting us to change where we do our grocery, to buy supermarkets’ own products instead of branded products, and we are shopping around even more for the best deals on mortgages and insurance, too.

Last month the charity, Teacher Support, which provides support to teachers on a variety of issues, reported an increase in the number of enquiries relating to debt or money worries. According to an article in Wales online, the Welsh branch of the charity reported that 17% of enquiries received between April and June 2008 related to money, grants and loans.

There are a number of options which allow a person to deal with their debts, and the choice of solution should be given careful consideration in light of your circumstances. The principle options are discussed below.

Bankruptcy is a formal procedure used to deal with the affairs of individuals whose liabilities exceed their assets or who are unable to pay their debts as they fall due. The bankruptcy order is made by the courts and can be obtained by any creditor owed an amount in excess of £750 or by the individual concerned. Once adjudged bankrupt, the individual’s affairs will be dealt by the Official Receiver or a trustee in bankruptcy, who will endeavour to realise any assets for the benefit of creditors. Assets may include a person’s home, cash at bank and motor vehicles. Unless they have previously been adjudged bankrupt, the individual’s bankruptcy will usually last no more than 12 months, but the bankrupt will be subject to a number of restrictions during this time. The trustee will also advertise details of the bankruptcy in a local paper and inform a variety of interested parties, such as the person’s bank, mortgage lender, other parties with an interest in the home.

While bankruptcy may offer the opportunity of a fresh start, as the bankruptcy is publicly advertised in the local press, teachers need to be prepared for the possibility of colleagues and pupils finding out.

There is also some concern as to whether or not bankruptcy will affect your employment as a teacher. There are a number of professions which will not allow you to continue to practice while you are bankrupt, for example:

• Lawyer
• Chartered accountant
• Insolvency practitioner
• Other positions within the Financial Services Industry
• Member of parliament
• Local Authority member

Your employment as a teacher does not appear to be affected if you are adjudged bankrupt. However, you may have to surrender any position you hold as a school governor.

If you are worried about the impact of declaring yourself bankrupt, you should review the terms of your contract and have a confidential discussion with your employer or union representative.

An alternative to bankruptcy and widely used by individuals seeking to avoid the stigma associated with bankruptcy is the Individual Voluntary Arrangement or IVA. An IVA is a formal agreement between a person owing money ("debtor") and his or her creditors, under which the debtor undertakes to make certain affordable monthly payments from his/her surplus income each month or realise certain assets, or both, in full and final settlement of their debts. The terms of an IVA are tailored to the individual’s circumstances and, while there is no requirement to repay creditors in full over the period of the IVA, creditors will expect to receive at least as much as they would in the event of bankruptcy.

An IVA requires the involvement of a licensed insolvency practitioner ("IP"), who will help put the proposal together and arrange the meeting of creditors to consider it. The IVA contract currently requires the approval of more than 75% by value of those creditors voting.

After deducting fees, the IP will make periodic payments to the various creditors, the size of which depends on the contributions made by the individual and the relative size of each creditor's debt.

Provided the individual carries out what they promised to do in the proposal, in a typical IVA they could be debt free in approximately 60 months.

An important difference between bankruptcy and an IVA is that an IVA is a private agreement between the debtor and their creditors and as such it is not advertised or communicated to any person not a party to the agreement. As a teacher, this may be an important point when considering which option is best for you.

Other, informal, solutions to your debt problems are outlined below.

Debt management plan (“DMP”) - a procedure under which a third party, usually a specialist debt management company, will seek to broker an agreement between a person owing money ("a debtor") and his or her creditors, for which they may charge a fee. The debtor will make affordable monthly payments to the debt management company out of any surplus income, after deducting living expenses, in a similar manner to an IVA. After deducting any fees, the debt management company will then offer a proportion of this monthly payment to each of the creditors, the actual amount being dependent on the relative size of each creditor's debt.

It is important to note that whilst creditors may be prepared to accept a reduced monthly payment, they might not be prepared to stop any interest or charges accruing on the outstanding amount. Under a DMP, you will typically be required to pay your creditors in full over an extended period of time.

As a DMP is an informal arrangement, creditors cannot be forced to accept the agreement and may commence or continue any legal action against you at any time. The acceptance of the DMP is dependent on your personal circumstances and the attitudes of the creditors concerned.

Where an individual has a small number of creditors and there is no immediate threat of legal action, it may be possible to agree an informal agreement direct with creditors. This could be of particular interest to individuals who do not wish a third party to be involved in their financial affairs on an ongoing basis, as in a DMP. An informal agreement is not legally binding and creditors concerned cannot be forced to accept it. They may, therefore, continue with any legal action against you.

In many cases the solution to your financial problems may be simple, allowing you to avoid the ongoing involvement of a third party:

• Are there family or friends that you could approach for a gift or interest free loan?
• Do you have any savings which could be used to reduce your debts?
• Could you save money by changing utility suppliers?
• If you believe that your financial problems are of a short term nature, you might wish to consider transferring the balances on your credit card(s) to those institutions offering 0% interest on balance transfers for an introductory period - this will not, however, be a solution for those individuals with long term financial problems due to the temporary nature of these low or nil rates of interest
• Is it possible to take on some additional part-time work in the evenings or weekends to help pay off your debts?
• If more than one member of the household owns a car, is it possible to raise some money by selling one of the cars? Are there non-essential items that you can do without, such as satellite television, mobile phones, etc.

Statute Barred Debts and the Limitation Act 1980

The Limitation Act 1980 applies to various classes of actions mentioned in Part I of the Act. Some rights of action never expire but generally a claimant must act within a given time, known as the limitation period. Otherwise, the right of action is lost and the claim is said to be barred or statute barred.

As a general rule the limitation period is 6 years for simple contracts, such as a credit card debt or unsecured personal loan. However, an action to recover land for example is generally subject to a limitation period of 12 years. Furthermore, the limitation period is suspended following legal action begun by an application to court. Once the limitation period stops running, any delay to progress the matter is immaterial but the proceedings may be struck out on account of the claimant’s failure to get on with the case, which causes the defendant to suffer prejudice from the delay or causes a fair trial to become impossible. The claimant could then lose the right of action forever.

The Office of Fair Trading Debt Collection Guidance is a useful source of information concerning statute barred debts as is the Insolvency Service. With regard to insolvency proceedings, if a debt becomes statute barred at the time of the presentation of a petition, then the petitioner is not at that date a creditor and therefore has no standing to present a petition in that capacity. Debts incurred more than six years before the winding-up or bankruptcy order (or more than 12 years in the case of a debt resulting from a charge made under a deed, such as a mortgage) are also not provable.

Creditors are permitted to chase the debt indefinitely, even after the debt has become statute barred, but they only have access to legal recourse to recover the monies during the limitation period.

Creditors may therefore legally pursue an unsecured debt in the following circumstances:

- The action commences within the limitation period
- The creditor has previously obtained a judgement, such as a CCJ although the creditor may need to apply to court to enforce the judgement after 6 years
- You, or anyone else named on the credit agreement, have made a payment to the account within the last 6 years
- You have established any contact with the creditor to enquire after the balance of the account or update personal details.

It is important to note that if you acknowledge the debt in writing or make a payment within the original limitation period, the time limit starts running again and the debt will not become statute barred for another 6 years from the date of your communication with the creditor.

HM Revenue & Customs are at liberty to pursue you indefinitely for debts owed to them. However, overpayments of benefits must be recovered within 6 years otherwise the Department of Work & Pensions will need to apply to court.

Even if a claim becomes statute barred, a debtor may decide to pay the debt after the expiry of the time limits. However, you should not feel pressured into doing so. It is considered to be unfair if a creditor or debt collector misleads you into believing the debt is still legally recoverable and demands payment after you have confirmed that you will not be paying the money owed. Such action by a creditor or debt collector, once the debt becomes statute barred, could be considered harassment contrary to the provisions of Section 40(1) of the Administration of Justice Act 1970.

Below is an example letter you may wish to use as a template if you have been contacted about the recovery of a debt and you believe such recovery action may be statute barred under the Limitation Act 1980.

Your Name and Address

Date

Creditor’s name &
Address

WITHOUT PREJUDICE

Dear Sirs

Account Number:

Thank you for your letter dated [insert date] in respect of the above account, which you claim is owed by [me/us].

[I/we] should advise you that, pursuant to the provisions of Section 5 of the Limitation Act 1980, "an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued".

[I/we] should further advise you that in the Debt Collection Guidance published by the OFT in July 2003 (updated December 2006), with regard to statute barred debt "it is unfair to pursue the debt if the debtor has heard nothing from the creditor during the relevant limitation period" (page 13).

The last [correspondence/payment/acknowledgement of payment] of this debt was made over six years ago and no further acknowledgement or payment has been made since that time.

Therefore, unless you are able to provide documentary evidence of payment or receipt of written contact from [me/us] in the relevant period described under Section 5 of the Limitation Act, [I/we] suggest that you are no longer able to take any court action against [me/us] to recover the alleged amount claimed, that action being “statute barred”.

On page 13 of the aforementioned OFT guidance, you will note that "continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statue barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970".

[I/we] should therefore be grateful to receive your written confirmation that no further action will be taken concerning the above account as well as your written confirmation that the matter is now closed.

[I/we] look forward to hearing from you.

Yours faithfully

[Your signature]

A GRAND DAY OUT

As a parent, it is becoming increasingly difficult to fund childcare costs and entertain the children during the long summer holidays. The credit crunch will not have eased the financial burden faced by many parents as “household” items of expenditure have increased, such as groceries, utility bills and petrol prices.

In addition, the number of personal insolvencies recorded by The Insolvency Service in the first quarter of 2008 has increased by 1.7% in comparison to those figures recorded in the final quarter of 2007.

A bankrupt may be required to make monthly income contributions from their surplus income under an Income Payments Order. However, such contributions usually constitute only 70% of a bankrupt’s surplus income after allowing for all essential monthly payments, such as mortgage repayments, food and groceries, utilities, TV licence, for example. Individuals, who have entered into an Individual Voluntary Arrangement, or IVA, are more commonly required to make monthly income contributions for the benefit of their creditors, based on the full amount of their surplus income. There is usually little room for manoeuvre with regards to how much you can spend on each item of expenditure listed in your income and expenditure schedule and it can be frustrating to justify expenditure on unplanned items or expenditure on children, who many feel should not be made to suffer as a result of the insolvency proceedings against the parents.

According to an article on the Money section of MSN, the six-week summer holiday can cost parents an average of £600 per child, half of this sum going on childcare costs.

If you are feeling the pinch for whatever reason, below are some suggestions on how to keep your children entertained during the summer holiday without it having to cost the earth.

Emma-Lou Montgomery, reporting for MSN, suggests that forward planning is the key. In her article, she describes six ways in which parents can entertain their children on a budget or for free. (Read the full article at http://money.uk.msn.com/guides/holiday-money/article.aspx?cp-documentid=8822356).

· The local park or city farm is usually free. Emma-Lou advises taking a picnic with you as it is cheaper than eating out and you can ensure your children are eating healthily.
· Museums or art galleries may not appeal at first glance, but entry is usually free and many offer free activities for children. You will be pleasantly surprised at how interesting and entertaining museums such as the British Museum (London), Leeds Art Gallery or Glasgow Botanic Gardens are. The Botanic Gardens in Glasgow have a particularly good Cactus house.
· You should see what is on offer in your local area and your local council or library may be a good starting point. While not all advertised events will be free, the involvement of the local council may mean that they are subsidised.
· Try to schedule your holidays to fit in with your children. Working couples could take it in turns to take time off. Alternatively, if you have friends who are parents, perhaps you could all get together and look after each other’s children on different days.
· Pay a visit to Grandma and Grandad, as they might be able to look after their grandchildren for a few hours.
· Keep your eyes peeled for deals and offers such as money-off vouchers, or “kids go free”.

If you simply can’t afford to take the time off work, and you don’t have access to a network of friends and family who can look after your children, childcare costs do pose a particular challenge for some parents. Some employers have a crèche at work for employees, while others operate a flexible benefits scheme whereby employees are allocated a budget which they can spend on benefits such as subsidised gym membership, travel insurance or childcare vouchers. If your employer does not offer the above, the Government provides some assistance for working parents.

If the ideas above aren’t sufficient food for thought to help you keep your children occupied and engaged, here are a few more specific suggestions:

- Party in the park – free pop concert at Temple Newsam, Leeds (this year it takes place on 27 July 2008 so tickets may no longer be available, but they usually go on release in June each year at local libraries around Leeds, as well as at the Town Hall)
- Dig up fossils at Lyme Regis and Whitby
- National sea life centres, Birmingham, Blackpool, Bray, Brighton, Chessington, Great Yarmouth, Lock Lomond, Scarborough, Weymouth – children under 3 go free
- National Media Museum, Bradford – free entry for all
- Avebury, Wiltshire - World-famous stone circle at the heart of a prehistoric landscape
- The Manchester Museum – Science for Life, Zoology, Geology and Mineralogy, Archaeology, and Egyptology, entry is free
- ‘Kids go free’ week in London
- Cook with your children by involving them with what you are doing or by taking the time to cook something special together
- Go swimming together, or go to the park and play tennis or football together
- The Forbidden Corner children’s attraction - a unique labyrinth of tunnels, chambers, follies and surprises created in a 4-acre garden in the heart of the Yorkshire Dales.

What debts can I include in an “IVA” or Individual Voluntary Arrangement?

In order to advise you properly with regard to your debts and the options available to you to get yourself out of debt, your insolvency practitioner or other debt advisor will need information about all your creditors.

Your creditors may include the following:

Secured creditors - such as your mortgage provider or any creditor whose debt is secured on your home and/or any other assets;

Landlords - if you are tenant or rent a workshop, offices etc;

The Crown - typically tax owed to the HM Revenue & Customs;

Unsecured creditors - creditors without any security for their debts, such as credit cards, store cards, personal loans and bank overdrafts (if unsecured), amounts due to utility and phone companies, council tax. If you are in business it would also include most trade creditors;

Finance creditors - those creditors who provide assets on hire purchase or finance leases, for instance motor vehicles;

However, not all the above types of creditor are eligible for inclusion in an IVA proposal.

Which Debts Can Be Included in an IVA?

Normally any unsecured debts can be included within an IVA. The following are examples of unsecured debts normally included as part of an IVA agreement:

• Business loans for which you are personally liable
• Catalogues
• Credit cards
• Outstanding balances after repossession of your home or vehicle
• Bank overdrafts
• Personal loans
• Store cards
• Personal debts due to the HM Revenue & Customs can be included.

Which Debts Can’t Be Included in an IVA?

Some debts cannot be included within an IVA. These include:

• Secured debts, (vehicle hire purchase agreements, mortgage or other loans secured on your property and related arrears)
• Rent and rent arrears
• Fines such as parking offences, speeding tickets
• Magistrates Court fines
• Debts incurred through fraudulent activity
• Child maintenance/Child Support Agency payments

The above will normally have to be paid, but provision for the repayment of these debts will be taken into consideration when calculating your monthly disposable income.

The more information you can provide the insolvency practitioner or debt advisor about your creditors, the better. You should try to provide the following details:

• The name and address of the creditor
• What type of creditor they are (see above) and how the debt was incurred
• Any account or reference numbers
• The amount owed to the creditor and the rate of interest being charged, if any
• The current monthly repayment

Other information required to be able to advise you properly includes:

• Details of any legal action that has or is due to be taken, particularly, if the creditor has obtained a county court judgement or is taking steps to bankrupt you
• Details of any arrears, this is particularly important if the creditor has security or is a landlord or finance creditor

One final point …

It is important that you tell the insolvency practitioner or debt adviser about all relevant debts. Bank overdrafts are commonly overlooked. Although you may be “in the red”, your wages/salary are paid into your bank account and you use it regularly to meet your normal living expenditure, therefore many people don’t think of their overdraft as a debt. If your account is overdrawn, it still represents a debt.

On the approval of your voluntary arrangement, all unsecured debts “crystallise”, freezing the balances at their current levels and preventing further interest and charges being incurred. This means that your bank overdraft will also be frozen and your bank will probably stop you from using this account.

You should remember that an IVA proposal may contain a clause which states that “in the event that any creditor has inadvertently failed to be notified of the Arrangement owing to a honest omission or oversight, then provided the claims of any such creditor or creditors in aggregate, will not reduce the likely dividend to ordinary unsecured creditors by more than 10%, then these claims may be admitted. If such claims exceed 10%, the Supervisor must convene a general meeting of creditors to consider whether the said claims should be admitted”. If the likely dividend to creditors is adversely affected so that it reduces by more than 10% this can potentially lead to the failure of your IVA.

Student debt - practice makes perfect

According to an article in The Telegraph last summer, thousands of students run the risk of bankruptcy each year after accumulating debts whilst at University and as many as 1 in 10 university students could be declared insolvent as a result of borrowing money to pay for increasing tuition fees and living costs.

The Telegraph article quotes the uSwitch.com price comparison website which suggested that students starting university in 2007 are likely to face total debts of up to £3.2 billion, which is three times the figure for 1997 while Push.co.uk, the university guide, claims that freshers inducted during 2007 will owe up to £21,000 by the time they graduate.

More worrying is that previously some graduates have actively sought to declare themselves bankrupt in order to avoid paying back their student debts. This is certainly not an easy option. Once adjudged bankrupt, your credit record will be affected for the next 6 years, you will find it hard to get a mortgage, hire purchase or overdraft agreement, you cannot borrow more than £500 on credit during the course of the bankruptcy without informing the potential lender that you are bankrupt, your bank account will be frozen and your assets may be seized and sold for the benefit of your creditors.

You should note that since 1 September 2004, student loans are now exempt from bankruptcy laws and so they will not be “cleared” if you declare yourself bankrupt. If you were made bankrupt before 1 September 2004 you may still have to repay your student loan. (If already bankrupt, the Official Receiver dealing with your bankruptcy will be able to advise you accordingly).

In 2006, the Liberal Democrat Shadow Chancellor, Vincent Cable MP, expressed his concern at the apparent underestimation of personal debt incurred by university students. The number of young people (those aged between 18 – 29) who have been declared bankrupt has been on the increase since 2001. In 2001-02 there were 21,530 bankruptcies where the debtor's age was recorded and of these 1,681 bankrupts were aged 18 - 29. However, the figures had increased to 34,852 and 6,520 respectively in 2004-05.

Young people appear to be particularly vulnerable to debt, according to Youth Information. While unemployment and low pay are major factors, tempting offers such as 0% finance on goods purchased and discounts offered by storecards play an important role.

The Debt Advice Trust recently reviewed a new Alliance & Leicester account aimed at people aged between 16 – 21 years old and suggests that banks may take advantage of the compulsive nature of young people, who are less likely to read the fine print on the terms and conditions.
Debt is increasingly a problem affecting young people and those starting out in their careers following a university education, although it should be noted that until you reach the age of 18 you are not legally responsible for your debts. It is therefore unlikely that you will be offered credit from banks and other financial institutions until you turn 18.

While credit has its uses it is important to stay in control. North Lanarkshire pupils are receiving advice concerning money management at school through a new debt awareness pack unveiled by North Lanarkshire Council at Dalziel High in Motherwell on 13 December 2007. It is designed to raise young people’s awareness about debt and help them make informed decisions about their finances in both the long and short term.

During a House of Commons debate on 27 February 2008, Sandra Gidley, Liberal Democrat MP, moved “that leave be given to bring in a Bill to require schools to provide education on personal money management; to make provision about advice centres on personal finance; to impose conditions on the activities of money-lending companies; and for connected purposes”. Sandra Gidley is concerned that our increasingly materialistic society is fuelling a growing debt crisis and is even impacting on our children’s behaviour. A survey of 14 – 18 year olds revealed that more than half are in debt by the age of 17 and 26% of those surveyed perceive credit cards and overdrafts as a way of increasing their spending power.

In Sandra Gidley’s view we need to tackle the problem at an early age and introduce budgeting and money management lessons in schools. After all, a school education should be about more than just subject knowledge. It should equip you with the skills to help you make a start in life once your formal education has stopped.

If you need to talk to someone about your debt, many Citizens Advice Bureaux employ debt counsellors or you could contact a free debt help line for advice on the various options to help you manage your debt.

Alternatively, the following sites have some useful information to help you manage your debt:

The Debt Helpline
Isle of Man Government – Golden rules of debt
YouthInformation.com
National Debt Line