Money chat with Elinor Quinn
Elinor works as an advisor with the Consumer Credit Counselling Service. She dropped in to answer your questions on debt, budgeting, overdrafts and mortgages.
Skakitty: I'm okay with money at the moment, I'm on Jobseekers Allowance (JSA), it's minimal, but I'm doing alright.
ElinorQuinn: You're actually doing fantastically well! Most people who only have JSA coming in struggle badly. They're not used to budgeting at such a low level.
Skakitty: I'm lucky I live with my parents, and they are not charging me rent at the moment. I've got an overdraft, which I'm in, but I just don't go out at all. It's doing my head in a bit, I'm so bored. Luckily I got a job offer yesterday!
ElinorQuinn: Well done!
Jo7 Staying in is the new going out anyway.
Skakitty: I just have so much stuff that is on my 'when I get my first paycheck' list to buy. It's going to be gone so quick!
ElinorQuinn: On the CCCS facebook page there's loads of information on how to stay in control of your budget. It even includes ideas on cheap nights in.
You might want to think about splitting your wage into different pots. Have a boring pot, a fun pot, a pot for the rent, and so on; and make sure that the boring but essential stuff gets paid before the fun stuff.
If you shop around for the best deals you can have a pretty good night in for a few quid. When it comes to food, if you plan in advance you'll save a fortune compared to going to the supermarket with an empty stomach.
It's important to remember that there's nothing wrong with spending money, providing you've taken the time to sit down and think about whether you can really afford it.
**Helen**: I can tell you where's good to go shopping on an empty stomach - Morrisons! I went there the other day when I was foolishly famished and still barely spent anything!
ElinorQuinn: The lower end supermarkets are usually pretty good for getting some good deals. The quality is normally as good as the higher end supermarkets, but without the high prices. Another thing to watch out for is special offers on things you always buy. I can't remember the last time I didn't buy my shampoo on 'buy one get one free'.
Skakitty: When I get my paycheck, car repairs come first, then a bit into savings, paying off overdraft and then new jeans. The good thing though is that I'm less of an impulse buyer.
ElinorQuinn: That sounds pretty sensible and you've got the right balance - pay the essentials but keep enough to have a bit of fun.
Franki: I just got sent a dispute over some stuff I sent to someone overseas. She paid for three things via PayPal and I sent them. She is now claiming that they haven't arrived and that she paid for registered shipping. Anyway, she's claiming it is my responsibility. I can't afford to pay her back, especially since she never asked for registered mail. What can I do?
ElinorQuinn: I'm guessing that this is an eBay dispute filed through Paypal. If that's the case, then unfortunately eBay have their own policies about these things, which need to be followed through first. eBay have a reputation of siding more with buyers than sellers and there is some anecdotal evidence of sellers having PayPal transactions reversed when a buyer opens a dispute up.
PayPal are actually owned by eBay nowadays. If PayPal decide to side with the buyer rather than with you, and they reverse the transaction, then your only real option is to make a formal complaint to PayPal.
Once the complaints procedure has been exhausted, you may find that if you want your money back you'll have to consider suing for it through the county court system.
Jo7 It's difficult with relatively small amounts of money. I bought something online that never came but it was only a few quid so I gave up on getting it.
ElinorQuinn: It's not necessarily the way life should be but sometimes you need to weigh up how much hassle things are worth. If a lot of money is at stake then that's one thing, but if it's the principle, it may just be easier to take the hit if it does come to that.
Bridget: I left university a year ago and now the bank want the overdraft back. I can't afford it. Is there anything I can do?
ElinorQuinn: Yes, there are things you can do. For a start, if you are still banking with that bank and they are threatening to take your overdraft away, the most important thing to do is to stop using that bank account. You can't close it but you can stop paying money in.
Otherwise, the bank will simply take whatever money you put in and use it to pay off your debt, and that might be unaffordable for you at the moment.
You'll need to work out a realistic budget of exactly how much you can afford to pay to the bank to clear this overdraft at a rate you can afford. You can do this yourself by using any number of budget planners that are floating around the place. Alternatively, you can have a session with one of our counselors or use the debt remedy tool on our website.
Once you've worked out how much you need to live on, you can see what you have left over to offer towards your debts. Don't be pressured into paying more than you can afford.
If the bank isn't happy with your payment offer, there is limited action it can take to recover its' money. This might involve them sending you a default notice, which is a formal request for you to repay what is owed.
Bridget: When they called me they said that if I didn't' pay they'd come and take my stuff. A mate told me they could. Is that true?
"Once you've worked out how much you need to live on, you can see what you have left over to offer towards your debts. Don't be pressured into paying more than you can afford."
ElinorQuinn: No, banks don't have any right to do something like that. Quite often they do try and pressurise people into paying by using scary threats.
What a bank may do after sending you a default notice is pass your debt on to a debt collection agency. People often confuse these with bailiffs. They don't have any powers like bailiffs do; it's just a different company with a different name.
Thunderstruck: Banks also have the right of set-off. This means that if, say, you have a savings account with them, they can use the money in your savings account to extinguish the overdraft (unless you have a specific agreement to the contrary).
ElinorQuinn: Absolutely.
Thunderstruck: In my experience, they will use scary threats. It's often a very long and drawn out process to get money from people who won't pay, and have no security for their borrowing (though technically it is their money). They generally hand over the debt collection to an external firm.
**Helen**: Could she pay off the overdraft with a 0% credit card, or is that just a really bad idea?
ElinorQuinn: It's not necessarily a bad idea, as long as you know that you can definitely afford the repayments and that the debt will be repaid by the time the 0% deal runs out. Otherwise, you will just be swapping your debt to a different interest rate, which may well be higher.
Bridget: Is a default notice a bit like a CCJ? I want to get a mortgage in a few years and I'm worried I won't be able to.
ElinorQuinn: A default notice is not the same as a county court judgment (CCJ), although it will get recorded on your credit file. All of your credit payment history is kept for 6 years on your credit file. If you do apply for something like a mortgage within that time then it may affect your ability to get credit.
A CCJ is really the last step in the process a lender can take to try and recover its money. If it came to this then you normally don't have to attend court, but a form will be sent to you in the post for you to fill in and return.
This is very important not to ignore. If you do, the lender can ask the court to decide in its favor and can ask for your repayments to be set at whatever it wants.
The form asks about your living costs and what offer of payment you feel you can afford to make towards your debt.
If the lender isn't happy then the court will use your form to decide what a realistic payment should be. As long as you keep paying what the court has ordered then no further action can be taken. If you ignore a CCJ or fall behind then the order can be enforced. This is when you might find bailiffs knocking on your door!
Jo7 It sounds like it's all about being pro-active, working out what you could afford to pay regularly and letting the bank know?
ElinorQuinn: Absolutely. This is why it's so important to work out your budget as soon as you know there is a problem.
Bridget: How much would I have to pay?
ElinorQuinn: The court uses your form to work out how much you can afford to repay - it's all about your affordability. Many of my clients are paying CCJs back at £1 a month because that is the best they can offer at the moment.
The bank and the court won't be too keen on you having luxury non-essential items in your budget. However, they do appreciate that you need to live, and they have expectations on what you will need to be spending to live on.
rant: Can I use an overdraft to part pay for a mortgage deposit, or will I have to declare this as a debt that the mortgage lender might hold against me? What are the implications?
ElinorQuinn: You can use an overdraft to pay for a mortgage deposit but really what you should be considering is, if I need to take out a debt to be able to fund the deposit, can I really afford it?
Each individual mortgage lender will have its own lending criteria. Some may not want to lend to you if you do this, others may well have no problem with it.
If you have done your sums and you know that you can comfortably pay it back then fine. If not, then would it really take you that long to save up the same amount as a deposit? The implications depend really on whether you can pay the overdraft back.
rant: I would never borrow more than I could repay. It would really be just to accelerate getting a house, not that I couldn't afford it.
ElinorQuinn: You will have to declare it to the lender when you are applying and obviously it is up to them to decide how to take it.
Jo7 Thanks for all your questions everyone and thanks for all your great answers Elinor.
ElinorQuinn: My pleasure, it was nice talking to everyone :)
What did you think of this content? Let us know your thoughts here. It only takes a few seconds, honest.
Money chat with Elinor Quinn
Elinor works as an advisor with the Consumer Credit Counselling Service. She dropped in to answer your questions on debt, budgeting, overdrafts and mortgages.
Skakitty: I'm okay with money at the moment, I'm on Jobseekers Allowance (JSA), it's minimal, but I'm doing alright.
ElinorQuinn: You're actually doing fantastically well! Most people who only have JSA coming in struggle badly. They're not used to budgeting at such a low level.
Skakitty: I'm lucky I live with my parents, and they are not charging me rent at the moment. I've got an overdraft, which I'm in, but I just don't go out at all. It's doing my head in a bit, I'm so bored. Luckily I got a job offer yesterday!
ElinorQuinn: Well done!
Jo7 Staying in is the new going out anyway.
Skakitty: I just have so much stuff that is on my 'when I get my first paycheck' list to buy. It's going to be gone so quick!
ElinorQuinn: On the CCCS facebook page there's loads of information on how to stay in control of your budget. It even includes ideas on cheap nights in.
You might want to think about splitting your wage into different pots. Have a boring pot, a fun pot, a pot for the rent, and so on; and make sure that the boring but essential stuff gets paid before the fun stuff.
If you shop around for the best deals you can have a pretty good night in for a few quid. When it comes to food, if you plan in advance you'll save a fortune compared to going to the supermarket with an empty stomach.
It's important to remember that there's nothing wrong with spending money, providing you've taken the time to sit down and think about whether you can really afford it.
**Helen**: I can tell you where's good to go shopping on an empty stomach - Morrisons! I went there the other day when I was foolishly famished and still barely spent anything!
ElinorQuinn: The lower end supermarkets are usually pretty good for getting some good deals. The quality is normally as good as the higher end supermarkets, but without the high prices. Another thing to watch out for is special offers on things you always buy. I can't remember the last time I didn't buy my shampoo on 'buy one get one free'.
Skakitty: When I get my paycheck, car repairs come first, then a bit into savings, paying off overdraft and then new jeans. The good thing though is that I'm less of an impulse buyer.
ElinorQuinn: That sounds pretty sensible and you've got the right balance - pay the essentials but keep enough to have a bit of fun.
Franki: I just got sent a dispute over some stuff I sent to someone overseas. She paid for three things via PayPal and I sent them. She is now claiming that they haven't arrived and that she paid for registered shipping. Anyway, she's claiming it is my responsibility. I can't afford to pay her back, especially since she never asked for registered mail. What can I do?
ElinorQuinn: I'm guessing that this is an eBay dispute filed through Paypal. If that's the case, then unfortunately eBay have their own policies about these things, which need to be followed through first. eBay have a reputation of siding more with buyers than sellers and there is some anecdotal evidence of sellers having PayPal transactions reversed when a buyer opens a dispute up.
PayPal are actually owned by eBay nowadays. If PayPal decide to side with the buyer rather than with you, and they reverse the transaction, then your only real option is to make a formal complaint to PayPal.
Once the complaints procedure has been exhausted, you may find that if you want your money back you'll have to consider suing for it through the county court system.
Jo7 It's difficult with relatively small amounts of money. I bought something online that never came but it was only a few quid so I gave up on getting it.
ElinorQuinn: It's not necessarily the way life should be but sometimes you need to weigh up how much hassle things are worth. If a lot of money is at stake then that's one thing, but if it's the principle, it may just be easier to take the hit if it does come to that.
Bridget: I left university a year ago and now the bank want the overdraft back. I can't afford it. Is there anything I can do?
ElinorQuinn: Yes, there are things you can do. For a start, if you are still banking with that bank and they are threatening to take your overdraft away, the most important thing to do is to stop using that bank account. You can't close it but you can stop paying money in.
Otherwise, the bank will simply take whatever money you put in and use it to pay off your debt, and that might be unaffordable for you at the moment.
You'll need to work out a realistic budget of exactly how much you can afford to pay to the bank to clear this overdraft at a rate you can afford. You can do this yourself by using any number of budget planners that are floating around the place. Alternatively, you can have a session with one of our counselors or use the debt remedy tool on our website.
Once you've worked out how much you need to live on, you can see what you have left over to offer towards your debts. Don't be pressured into paying more than you can afford.
If the bank isn't happy with your payment offer, there is limited action it can take to recover its' money. This might involve them sending you a default notice, which is a formal request for you to repay what is owed.
Bridget: When they called me they said that if I didn't' pay they'd come and take my stuff. A mate told me they could. Is that true?
ElinorQuinn: No, banks don't have any right to do something like that. Quite often they do try and pressurise people into paying by using scary threats.
What a bank may do after sending you a default notice is pass your debt on to a debt collection agency. People often confuse these with bailiffs. They don't have any powers like bailiffs do; it's just a different company with a different name.
Thunderstruck: Banks also have the right of set-off. This means that if, say, you have a savings account with them, they can use the money in your savings account to extinguish the overdraft (unless you have a specific agreement to the contrary).
ElinorQuinn: Absolutely.
Thunderstruck: In my experience, they will use scary threats. It's often a very long and drawn out process to get money from people who won't pay, and have no security for their borrowing (though technically it is their money). They generally hand over the debt collection to an external firm.
**Helen**: Could she pay off the overdraft with a 0% credit card, or is that just a really bad idea?
ElinorQuinn: It's not necessarily a bad idea, as long as you know that you can definitely afford the repayments and that the debt will be repaid by the time the 0% deal runs out. Otherwise, you will just be swapping your debt to a different interest rate, which may well be higher.
Bridget: Is a default notice a bit like a CCJ? I want to get a mortgage in a few years and I'm worried I won't be able to.
ElinorQuinn: A default notice is not the same as a county court judgment (CCJ), although it will get recorded on your credit file. All of your credit payment history is kept for 6 years on your credit file. If you do apply for something like a mortgage within that time then it may affect your ability to get credit.
A CCJ is really the last step in the process a lender can take to try and recover its money. If it came to this then you normally don't have to attend court, but a form will be sent to you in the post for you to fill in and return.
This is very important not to ignore. If you do, the lender can ask the court to decide in its favor and can ask for your repayments to be set at whatever it wants.
The form asks about your living costs and what offer of payment you feel you can afford to make towards your debt.
If the lender isn't happy then the court will use your form to decide what a realistic payment should be. As long as you keep paying what the court has ordered then no further action can be taken. If you ignore a CCJ or fall behind then the order can be enforced. This is when you might find bailiffs knocking on your door!
Jo7 It sounds like it's all about being pro-active, working out what you could afford to pay regularly and letting the bank know?
ElinorQuinn: Absolutely. This is why it's so important to work out your budget as soon as you know there is a problem.
Bridget: How much would I have to pay?
ElinorQuinn: The court uses your form to work out how much you can afford to repay - it's all about your affordability. Many of my clients are paying CCJs back at £1 a month because that is the best they can offer at the moment.
The bank and the court won't be too keen on you having luxury non-essential items in your budget. However, they do appreciate that you need to live, and they have expectations on what you will need to be spending to live on.
rant: Can I use an overdraft to part pay for a mortgage deposit, or will I have to declare this as a debt that the mortgage lender might hold against me? What are the implications?
ElinorQuinn: You can use an overdraft to pay for a mortgage deposit but really what you should be considering is, if I need to take out a debt to be able to fund the deposit, can I really afford it?
Each individual mortgage lender will have its own lending criteria. Some may not want to lend to you if you do this, others may well have no problem with it.
If you have done your sums and you know that you can comfortably pay it back then fine. If not, then would it really take you that long to save up the same amount as a deposit? The implications depend really on whether you can pay the overdraft back.
rant: I would never borrow more than I could repay. It would really be just to accelerate getting a house, not that I couldn't afford it.
ElinorQuinn: You will have to declare it to the lender when you are applying and obviously it is up to them to decide how to take it.
Jo7 Thanks for all your questions everyone and thanks for all your great answers Elinor.
ElinorQuinn: My pleasure, it was nice talking to everyone :)
What did you think of this content? Let us know your thoughts here. It only takes a few seconds, honest.