Busting common debt myths: The facts

Myth: My water or energy supply will be cut off if I do not pay

This can happen. But it is rare.

There are many other actions they can take before cutting off your supply. If you stop paying your bills, energy suppliers can:

• Try to collect the debt using a debt collection agency
• Get a court warrant to enter your home to fit a pre-payment meter

Your credit score will be affected if you miss payments.

If you cannot afford to pay your bills, contact your supplier and explain the situation. They may be able to offer:

• A payment break
• Temporary lower payments
• Hardship grants

Your water supplier cannot turn off your water supply if you have arrears. But, they can use court action to get you to pay the debt.

If you are on a low income you may be able to get help through your water supplier.

Myth: When I die, my family will have to pay off any debts I have

This is not true.

If you die and:

• You have debts that are not secured against your home or an item of value
• The debt is in your name only

The unpaid amount will be settled with any money left in your estate. These are items such as:

• A house
• Savings
• Investments

A personal representative is someone who manages your estate when you die. They might be liable for your debts if they do not manage this right.

The people you owe may chase unpaid debts after you die. But only if you leave behind a large estate. Such as a house that you own with lots of equity.

If you have no assets at the time of your death, any debts in your name are written off.

If you leave behind a joint debt, the other person will be liable for the full balance.

Myth: Lenders can send bailiffs to my house to collect payments

This is not true.

Only the courts can send bailiffs to visit your home. Bailiffs are also known as enforcement agents in England and Wales, or Sheriff officers in Scotland.

The people you owe may send collection agents. But they have no powers to force entry to your home and take goods.

Bailiffs can only enter your home if you have let them in on a previous visit, and you have signed a ‘controlled goods agreement’.

If you are dealing with any kind of court debt, you should get free debt advice.

Myth: Bailiffs can take anything they want from my house

This is not true.

There are strict rules about what bailiffs can and cannot take from your home. They prefer goods that sell for a good price at public auction, so their main targets will be:

• Vehicles
• Electronic goods, like TVs and computers
• Jewellery
• Furniture

They must leave you with basic items, including:

• A washing machine, fridge and something to cook with
• A landline or mobile phone
• Bedding
• A dining table and enough chairs for everyone in the house
• Heating and lighting appliances
• Medical or care equipment

Some goods are protected from bailiffs, such as:

• Goods that belong to someone else. They can take goods that are jointly owned. The other person might need to show a receipt to prove ownership
• Pets and assistance dogs
• Tools and equipment that you need for your job or study, up to a value of £1,350
• Fixtures in your property. Such as fitted wardrobes or fitted kitchen units

If you think you have been treated unfairly, read our guide to making complaints about a bailiff.

Myth: If I miss payments, I will be put on a credit blacklist

This is not true.

Lenders will look at your credit file. Your history will help them decide whether to lend to you. Each lender chooses who they will lend to. That is why there is no such thing as a blacklist.

When you apply for credit, lenders check your credit file. It will show:

• All missed or reduced payments
• All payments you make towards your debt
• A note whenever you pay off a debt

Myth: If I get married, I will take on my partner’s debt

This is not true.

If you get married, you will not be responsible for your partner's debts or financial obligations.

Debts you could be liable for include:

Joint financial agreements

If you:

• Open a joint bank account
• Take out a loan together
• Get a mortgage together

You will both be liable for these. This is called 'joint and several liability’.

Council tax

If you live in England or Wales, in most cases you will both be responsible for any council tax owed. It works this way even if only one of you is named on the bill.

Water rates

All adults in your home are responsible for the water bill during the period they lived there. It works this way even if they are not named on the bill.

Myth: My credit score will be affected if I get debt advice

Debt advice does not affect your credit score. But some debt solutions will.

While some debt solutions may impact your credit score, dealing with your debts should be your priority. Missed payments could have already affected your credit report.

Myth: If someone who lived at my address was in debt, it will affect me too

This is not true.

This used to be a concern for many people. But credit files and CCJs (County Court Judgments) are based on the individual, not the address.

When someone you owe asks for your address, they do this to check:

• That you are who you say you are
• How long you have lived there

The only way you can be linked to another person's debt is if you take out joint debt with them.

You can always check your credit file with the three credit reference agencies. If you do see anything that does not seem right, you can ask them about it.

Myth: If I leave the UK, my debts will go away

This is not true.

Moving to another country would make it harder for a UK-based lender to find you. But it does not mean they will stop chasing you. There are a growing number of organisations that will pursue a debt outside of the UK.

Lenders may have a branch of their company in other countries. They would be able to pursue the debt on the UK branch’s behalf.

They can still take court action against you. This means that the debt will still need to be dealt with if you ever return to the UK.

There are steps you can take to deal with your debts from abroad.

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Myth: You have to pay for debt advice

This is not always true.

There are some debt advice companies that charge for advice. We do not, and there are many other organisations who offer free debt advice.

We recommend getting free and confidential advice before choosing any debt solution.

• We do not charge a fee for our DMPs
• We follow industry standards to avoid extra costs for solutions where fees are built in

Find out more about debt management companies.

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