Credit and utility debt
all the advice you need
CREDIT DEBTS
Credit debts can include bank loans, overdrafts, credit cards etc. If you are still a student you may have access to an interest-free overdraft. You may be able to negotiate extending the overdraft with the bank or make an arrangement to pay back the overdraft once you have graduated. If you have other credit debts which are not specifically student related you may have to come to an arrangement to pay what you can afford. For further information, call National Debtline directly on 0808 808 4000.
Advice
If you have a student account, contact the account manager at your bank, your student welfare officer or phone National Debtline directly on 0808 808 4000.
STUDENT LOANS AND BANKRUPTCY
Until recently you could include your student loans in bankruptcy along with your other debts. The law has recently changed so that from 1 September 2004 (for income-contingent loans after 1998) or 1 July 2004 (mortgage-style loans from 1990 to1998) student loans are no longer provable in bankruptcy. This means they are not written off with your other debts at the end of the bankruptcy.
Warning
If you now choose bankruptcy as an option for dealing with your credit debts you will not be able to include your student loans in the bankruptcy. You will still have to pay back your student loans in the usual way.
UTILITY DEBTS
Many students have problems with utility debts especially if you share bills with other students in a shared house. To avoid these problems it is a good idea to ask for the bill to be put in joint names so that each person named on the bill is jointly responsible. You should also be careful only to pay for the fuel used and not fuel used by previous or future tenants.
Advice
Contact your utility supplier with up-to-date meter readings whenever you move into or leave a property.
If you have a utility bill you cannot pay you should contact your utility supplier straight away to see if you can come to an arrangement.
You should treat gas and electricity debts as a priority debt as your supplier can install a pre-payment meter or disconnect your supply if you do not pay. You cannot be cut off if you fall behind with water bills although your water company can take court action against you if you do not keep up with your payments. For further information, call National Debtline directly on 0808 808 4000.
CREDIT REFERENCE FILES
The majority of creditors have structured repayment arrangements for student-related debt once you start earning. As long as the arrangement is kept to there should not be a problem with your credit rating. If you have credit agreements that are not specific to students, such as credit cards or store cards, then defaulting on these agreements will affect your credit rating and ability to obtain credit in the future.
Fact sheet
National Debtline have a fact sheet on 'Credit reference agencies', which may be of assistance to you. For further information, call them directly on 0808 808 4000.
nationaldebtline.co.uk