I’m struggling with around £18,000 worth of debt and I wondered whether I’d be eligible for a Debt Relief Order. I know the limit used to be £15,000 but I heard that it was increasing soon. Is that right?
A Debt Relief Order can be a way to help people out of unmanageable debt. From 1 October the debt limit for a DRO increases to £20,000 so you might now be eligible.
You could qualify for a DRO if you don’t your own home, have up to £1,000 worth of assets, a car worth no more than £1000 and have £50 or less left each month once you’ve paid your essentials.
Debts such as magistrate’s court fines, student loans and child support maintenance aren’t covered by a DRO but credit card debt, overdrafts, loans and rent arrears are so check first whether you’re eligible.
The DRO lasts a year and during that time you don’t have to make any payments towards most debts included in your DRO. Your creditors can’t force you to pay off the debts either.
At the end of the DRO period your debts will be written off but you’ll still be responsible for paying off any debts that weren’t included in the DRO.
It’s also important to consider that while a DRO can help you deal with your debt, it may affect your credit rating, and if, during the 12 month period you borrow more than £500 you have to tell the creditor about your DRO.
I’ve had a letter offering me the opportunity to invest in fine wine. The returns look really good and I’m tempted, but my friend says not to trust the letter in case it’s a scam. How can I tell if it’s genuine?
While there are lots of legitimate investments out there, your friend is right to warn you. Letters and cold-calls from unknown companies can be a scam. Investment opportunities can ask for large sums and you need to be completely confident before you put your money in.
First, do your research on the company. Investigate their website thoroughly and pay attention to where the company is registered. If it’s outside the UK, be on your guard – if it is a con, it will be difficult to get your money back. You could also look for industry bodies that oversee the sector to assist you with investment advice.
Next, check if the offer is realistic. Do some comparisons among similar companies for what the usual return is. If it looks too good to be true, it probably is.
Finally, look out for high-pressure sales tactics. The literature may ask you to contact them by phone. If a salesperson puts pressure on you to complete the deal straight away, or tells you not to tell anyone about it, it could be a scam.
For advice or to report a potential scam, get in touch with us on 01246 250890
I’ve just found out that a shop I’ve bought goods from has gone bust. How will this affect my consumer rights?
When a trader goes into administration its rights and responsibilities change. Depending on your situation you might end up losing out, so it’s important to know what you can do to protect yourself.
A common problem when shops go bust is what you can do if you have a gift card. Once they go into administration shops are under no obligation to continue to accept gift cards, although some may continue to do so. If you have a gift card then hold on to it, even if it isn’t being accepted, as the situation can change. This works both ways, so if a shop is taking vouchers then make sure you use them while you can.
If you’ve put down a deposit on an item that you have yet to receive, then whether or not you receive it will depend on whether it has been ‘earmarked’ for you. If it has then the shop should fulfil your order, but if not then you may not see the goods. If you’ve bought something, for example electrical or white goods, which become faulty then it might be easier to claim under the manufacturer’s guarantee.
You can log a complaint with the administrators which will add you on to the store’s list of creditors, but realistically most customers will be a long way down the list. If you used a credit or debit card you may be able to make a claim from your provider, and if the goods or services you bought came with a manufacturer’s guarantee or an insurance-backed guarantee, you may be able to make a claim under them. If the trader was a member of a trade association, contact them to see if they can help. You can find out more about what rights you have and what you can do if things go wrong, by going to www.adviceguide.org.uk