Helping people to deal with debt before it leads to homelessness
In 2013 Framework, in response to social trends and the announcement of major changes to the welfare system, employed a specialist Debt and Welfare Rights Advisor.
Tracy Ellis, who previously worked in floating support services in the Newark and Sherwood area, is an expert in debt management and in the benefits system. We asked her a few questions in order for her to give a fascinating insight into her work.
Who do you help?
I visit people across Nottinghamshire who have been referred to me – often by other Framework services – for help with debt and benefit issues.
What is the biggest challenge faced by the people you help?
It’s debt. It is a very serious issue for a lot of vulnerable people – often resulting in a huge impact on their mental and physical health. Many find themselves ‘robbing Peter to pay Paul’ and see their level of debt rising rapidly.
Why is your work so important in this area?
Debt is a growing problem which can get worse if it’s not dealt with, it won’t just go away. Debt is also not limited to what is historically known as vulnerable groups. Worst case scenarios include losing your home or feeling desperate enough to want to end your life. Debt and money advice services nationwide have been subject to funding cuts and accessing such support is becoming more difficult. The Citizens Advice Bureau is inundated with work and there is often a waiting list. Another avenue for support was becoming more necessary.
What impact does debt have on people?
The effect on mental and physical health is quite significant. People can become stressed, depressed and anxious and feel there is no way out of their situation. Beginning to feel a sense of hopelessness, they can become socially isolated very quickly. I am able to visit people in their homes if they are not well enough to attend a drop-in.
The risk of losing their home is a major concern for most. Although most consumer credit is unsecured debt obviously, some debt is secured on the home. This can often lead to lenders seeking to repossess your property.
Why do so many people need your help?
Unemployment is high, incomes are low and levels of debt are increasing for everyone. One big ‘modern’ problem is the Payday lenders such as Wonga. There are so many of them out there now and I am still discovering new companies daily. Sadly, people are using one payday lender to pay off another; credit checks must be vague otherwise they would realise that the individual already had several other accounts running. High street lenders were also, until recently, still lending irresponsibly to people who had no hope of ever paying the money back.
I accept that some individuals have felt the need and borrowed irresponsibly but many I’m sure have felt they had no other choice either. Largely, however, I feel the fault lies within the consumer credit industry and the vast number of irresponsible lenders who prey on the most vulnerable in society.
This said, even people who are currently employed are finding their incomes won’t stretch to afford the things they need.
How do you help people?
All the work I do is on a case-by-case basis. Many people are simply unaware of their rights and their options. I take a close look at a person’s situation and give them my assessment and advice. We discuss the options open to them (i.e. repayment offers/Admin Orders/Insolvency Options) and I support them with the option they have chosen unless I believe it to be a damaging choice for them.
We look at prioritising payments; the creditors who shout the loudest are not always the most important. For example, if you don’t pay your rent or mortgage you risk losing your home; if you don’t pay for your gas/electricity you may risk being cut off; if you don’t pay your council tax you will often be contacted by the Bailiffs and could ,in the worst case scenario, be sent to prison.
If, on the other hand you don’t pay your unsecured loan on time, you may get a lot of letters and phone calls but you won’t be at risk of losing your home...unless of course it is secured on your home.
Often people will bury their heads in the sand and pretend it is not happening. I have met with people who have handed me a huge amount of letters – often stashed in a plastic bag – and unopened. Other people have little detail about their debts because they have thrown all their letters away. Fortunately, working in partnership with each Framework team has enabled information to be gathered effectively.
What impact is welfare reform having on your work?
The net result of the welfare changes is that people have less money coming in and more things they have to pay for – like council tax contribution and ‘bedroom tax’.
This money has to come from somewhere and, sadly, it is often coming from payday lenders and the like or people are finding themselves with rent arrears.
What is the best bit about your work?
Often it is seeing the change and relief that people feel once the weight is lifted from their shoulders, giving them an opportunity to restart their lives again free from their debt. I enjoy using my knowledge to make people aware of their rights and to represent them against both the big and the small money lenders. Oh yeah, and poking the payday lenders in the eye from time to time is also nice!"