SOME 38% of people who go to Citizens Advice for money problems have a negative budget.

Their income isn’t enough to meet basic living costs. The problem has grown over the last few years because wages have remained static, social security benefits have been frozen, and the cost of living has increased.

In these circumstances repaying unexpected bills or an emergency item is impossible unless you borrow your way out and compound the problem to a later date. So, more and more people – many of whom are in full-time employment – have turned to foodbanks. There are 212 foodbanks in Scotland and more than 1000 food parcels are given out every single day; a rise of almost one quarter on the previous year of 2017/18.

More people having to rely on credit to meet essential expenditure isn’t sustainable in the long term. The smallest change in household finances can make affordable credit unaffordable; like the loss of overtime or a short-term absence from work with an employer who doesn’t offer contractual sick-pay.

Changes in your life such as redundancy, long term ill-health or a breakdown in the family unit will create more money troubles. Without access to credit anyone can be forced to make difficult choices on which essentials to skip – like rent, utilities or food – just to get by.

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If you do get into difficulties, never agree to an unaffordable payment arrangement. Go to a free money advisor and he or she will negotiate for you. Sometimes what is needed is a breathing space. You don’t necessarily have to go down the road of bankruptcy, a trust deed or the debt arrangement scheme if what you need is a chance to get back on track.

Recently we had a client referred to Govan Law Centre through the NHS mental health pathway. Mary had suffered from a prolonged period of depression resulting in her hospitalisation.

She had been working and met all her financial commitments until she fell ill. Her health deteriorated, resulting in her leaving her job with a significant loss of income.

Money worries played a major role in Mary’s feelings of depression. She’s now taking the first steps in her recovery but is unable to work yet or repay debts of around £15,000. She didn’t want to pursue a statutory debt solution, so the law centre contacted the woman’s creditors to advise of her position. Most agreed to place her account on hold for 12 months, after which they will review her health and financial circumstances. One creditor agreed to accept a token payment of a penny per month for the next 12 months, and another advised they would write off the small balance they were owed. Solutions and free help are available across the city. It’s often about reaching out as a first step.

Michael Allan is a money advisor at Govan Law Centre and is concerned about unreasonable pressure being put on financially vulnerable tenants.

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He said: “I’m noticing a worrying trend with some landlords over how they recover rent arrears from tenants, particularly those on universal credit.

“We have seen recent examples of social landlords having already arranged 3rd party deductions from benefits to reduce arrears, but then pressurising tenants to make additional payments from the remainder of their social security income to reduce arrears quicker. There isn’t any thought how those individuals will meet other essential living costs.

“In many cases this is causing individuals undue financial hardship which has forced a number to turn to foodbank support just to cope. I’m pleased to say in cases which the law centre has been involved, we have challenged this practice. We’ve been able to get the housing provider to agree to the deduction from benefit as being a sufficient payment towards arrears. My worry is that many tenants throughout the city will not access advice to challenge this.”

Local authorities have a duty to ensure the payment and collection of council tax but for many it is a case of can’t rather than won’t pay. We are seeing an increase in inquiries relating to council tax accounts being passed to sheriff officers for collection following summary warrant court proceedings. This process adds an additional 10% statutory penalty, increasing the debt burden on those who can least afford it.

Many consumer credit lenders are now showing a greater understanding for customers suffering from mental health issues. Many will agree to place accounts on hold for long-term moratoriums to allow the customer to focus on their recovery and

help alleviate the anxiety that can be associated with debt.

It’s often difficult for those with poor mental health to reach out for the help and support to contact their creditors in the first place. Once you do, the constant letters, phone calls, texts, emails and threats of legal action can be stopped.