• Overview of Utilities

  Due to the high importance of receiving constant utilities in our homes, the treatment of utility debt is somewhat different to that of, say, a credit card debt. Cutting up your card and suing you is not meant to deprive you of water, heat, safety or security. However, the utility companies can deprive you of their resources in some situations.

• WATER

  The water companies usually need a County Court Judgment before disconnecting your supply (we are awaiting a new law to stop the water companies having the power to disconnect bad payers). When they apply for the Judgment, you will be given ample opportunity to make reasonable payment arrangements. If you maintain the arrangements and you keep the present water bill up to date, you need not worry. If you do not maintain the present water charge, but you are paying the arrangement, the water company will have to return to the court for another County Court Judgment. In such a situation you may be ‘pushing your luck’ with the court.

• ELECTRICITY and GAS

  When you receive a bill from either the electric or gas companies, check that the bills are not estimated, and that the amount of usage seems correct. If you suspect the bill is wrong in any way contact the company for an investigation into your query.

• There are four methods to deal with utility debt situations (in order of preference):
  1. Budget Plan
     The company will average your bills over a year and allow similar quarterly payments. If your usage goes up or down, the amount will automatically change. This method is usually by direct debit and will also provide you with a discount because of the easy collection method.

  2. Instalments
     If you do not have a bank account, this is your first choice If you find yourself in a debt situation, call them immediately and offer a payment you can afford: under the electricity and gas code of practice, they should show a fair degree of ‘understanding’.

  3. Pre-payment Meters
     You must be offered a payment meter as a last resort before being disconnected (if it is safe to do so in/on your property). Meters have a higher standing charge, will stop if you have no money and are very inconvenient.

  4. Direct Payment
     Direct Payment by Income Support (IS) or Job Seekers Allowance (JSA) If you owe over a certain amount (call IS or JSA for figure, and there is one whatever they or the fuel companies may say to you) you can have direct deductions from your benefit. The good thing about this is that it gets paid. The bad thing: you have no control over your finances. Many people in debt need more money one-week, than they do the next etc. And, the amount of repayment will probably be higher than an Installment Arrangement.

• The Social Fund Loan (a loan that can be obtained if you are on IS or JSA) cannot be used for utility debts. So, do not ask for a Social Fund Loan for your utility debt.

• Finally, with utility debts, more so than any other debt, act fast and loud. Get the best arrangement you can get before committing yourself, and stick to it. If you need two years to pay-off a £400 bill: tell them so, show them your Income and Expenditure Statement that backs up your offer, and make a payment immediately.

Many thanks to Colin Duguid of Debt 24.com who is taking the time to provide this information as a service to homeworkers.