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Bailiffs chasing working parents for debts

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More than 1 in 5 people who have a bailiff problem are working parents, reveal new figures from Citizens Advice.

The national charity also finds that parents are more likely to have bailiffs knocking at the door chasing debts than any other household.  New figures show that half of people who get help about bailiffs are families with dependent children.

There is little divide between in work and unemployed families as 46% have jobs compared to 54% who are unemployed.

The study also uncovered a North-South divide when it comes to the scale of bailiff problems.

* The North East accounted for a sixth of all bailiff problems handled by Citizens Advice Bureaux across England and Wales.

* One in 25 problems handled by CABs in the North East are to do with bailiffs compared to just 1 in 100 in the South West.

* More than half the people in the East Midlands who have a bailiff problem are a family.

Bureaux across the country see people with a range of debts that are being chased by bailiffs, from council tax arrears and unpaid parking fines to loans and credit cards.

The new findings are from an in depth analysis of 13,444 people who came to Citizens Advice between January and March 2013 with a bailiff problem.

Citizens Advice helped 38,262 people with over 60,000 bailiff problems between April 2012 and March 2013, a third of which were for council tax debts.

The findings reignite Citizens Advice’s concerns that a shift from council tax benefits to localised support schemes could see more families struggling to pay their bill, meaning bailiffs come knocking.

It’s not just the debt that is the problem.  Evidence from CABs has found private bailiffs frequently overstate their powers, act aggressively and bump up debts by levying excessive and illegal fees and charges.

Citizens Advice Chief Executive Gillian Guy said: “The prospect of a bailiff knocking at the door of a family home is terrifying for anyone, particularly parents with kids at home.  Mums and Dads don’t want their children to know about their money worries, but when a person is standing on their doorstep demanding money, it is unavoidable and frightening for all of the family.

“The fact that working parents are being hounded by bailiffs for debts is a worrying reflection on today’s living standards.  Hard-working households are racking up debts just to get by.

“We’re concerned that all too often debts, like unpaid council tax, are passed to bailiffs too quickly without recognizing that the person may be struggling and need help like repayment plans. Creditors need to be identifying debt problems earlier and offering support, and never side-stepping responsibilities by handing it over to bailiffs.”

Citizens Advice is calling on councils to sign up to its good practice protocol on council tax debts. The protocol includes commitments such as promoting help that’s available to those who are struggling and highlighting different payment date options for council tax payers so they can budget more effectively.

Earlier this year the Government announced plans to clamp down on rogue bailiffs from April 2014 which includes banning bailiffs from entering homes at night or when only children are present.  Citizens Advice is keen to see the changes implemented but is concerned they do not get to grips with the fundamental flaw of a lack of proper controls and consequences for bailiff firms.

 

daily alternative | alternative news – Bailiffs chasing working parents for debts

via Bailiffs chasing working parents for debts – Investor Today.

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Finance

The Huge Racial Injustice Hidden in Our Credit Scores

Worried about the use of big data for corporate gain? Look not further than the credit scoring system in the US, which has profound impact on our daily lives and is a source and perpetuator of systemic racial injustice.

In response to aggressive marketing by the “big three” multinational credit bureaus – Equifax, Experian and TransUnion – employers, landlords and insurance companies now use credit reports and scores to make decisions that have major bearing on our social and economic opportunities. These days, your credit history can make or break whether you get a job or apartment, or access to decent, affordable insurance and loans.

Credit reports and scores are not race neutral. Rather, they embed existing racial inequities in our credit system and economy – to the point that a person’s credit information serves as a proxy for race.

For decades, banks have systematically redlined black and Latino neighborhoods, refusing to make conventional loans or locate branches in non-white and lower-income areas, notwithstanding laws that obligate banks to meet the credit needs of all communities they serve, consistent with safe and sound banking operations. Thanks to financial services deregulation and the advent of asset-backed securitization, a multi-billion dollar “fringe” financial system has filled the void, characterized by high-cost, destabilizing products and services, from payday loans to check-cashers – which banks typically also own or finance.

People and communities of color have been disproportionately targeted for high-cost, predatory loans, intrinsically risky financial products that predictably lead to higher delinquency and default rates than non-predatory loans. As a consequence, black people and Latinos are more likely than their white counterparts to have damaged credit.

This firmly-entrenched two-tiered financial system has had devastating consequences for entire neighborhoods of color. Starting in the 1990s, financial institutions began flooding historically-redlined neighborhoods with predatory mortgages that ultimately led to the meltdown of the global economy. Waves of foreclosures hammered neighborhoods of color for more than a decade before the crash and black and Latino Americans bore the brunt of the ensuing foreclosure crisis, recession and spiking unemployment. Droves of people turned to high-rate credit cards to cover even basic expenses, contributing to the consumer debt crisis and spawning a bottom-feeding debt-buying industry that purchases old debts on the cheap and then uses the courts to extract judgments disproportionately from people and communities of color. These judgments are then listed in their credit reports, which also brings down their credit scores, in turn limiting a whole range of opportunities.

Although Wall Street is no longer pumping toxic mortgages into black and Latino neighborhoods, people and neighborhoods of color continue to reel from the foreclosure crisis, which many predict is far from over. Meanwhile, racially discriminatory and subprime auto lending are on the rise, payday lenders continue to extract billions of dollars from low-wage workers, and student loan debt has surpassed the trillion dollar mark. One in five Americans has unpaid medical debt, with more than half of all African-Americans and Latinos carrying medical debt on their credit cards. By definition, people who take payday loans and have uninsured medical debt are struggling, and are likely to miss payments. Missed payments translate into decreased credit scores.

This information – unpaid medical and credit card debt, student loans, and mortgages, as well as foreclosures, bankruptcies, debt collection judgments, wage garnishments – appears on people’s credit reports and lowers their credit scores. And the credit bureaus make humongous profits by selling this information about all of us.

In New York City, a coalition of labor, community and civil rights groupsrecently won the strongest ban on employment credit checks in the country. It’s a major economic justice victory, but we know it’s just a first step. We knocked down this discriminatory barrier because there is no demonstrated connection between a person’s credit history and his or her likely job performance or character. Credit checks can also block applicants with no or “thin” credit histories, including many students and immigrants. Rather, using credit information to make hiring decisions – or to rent apartments, set insurance terms, or extend credit – is a clear way to perpetuate inequality, poverty and segregation.

Credit reports and scores are mirrors of our manifestly two-tiered financial system, and more broadly our system of racial wealth inequality and unequal opportunity. In our culture, indebtedness – and certainly failure to pay one’s debts – is deeply entwined with concepts of morality. The insidious notion that our credit history speaks to our reliability as human beings is largely taken for granted.

The credit bureaus and the information they sell have out-sized influence over our lives. It’s time to stop these pernicious practices and the systemic injustices that underlie them.

 

daily alternative | alternative news – The Huge Racial Injustice Hidden in Our Credit Scores

via The Huge Racial Injustice Hidden in Our Credit Scores

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