Dealing With Debt Problems During Covid-19

Dealing With Debt Problems During Covid-19

Debt Problems During Covid-19

There is a continuous lockdown in most of the parts of the United Kingdom. This continuous lockdown caused severe damage to the economy and household incomes. This blog looks at what support is available during these difficult times and how you can deal with debt problems during Covid-19.

There are over four million payment breaks provided by lenders for mortgages and loans. This support is coming to an end. Firstly, there was a three-month payment holiday on offer, which was later extended for another three months. If you have already had a six-month payment holiday on your loans and mortgage payment, you will not be able to get further breaks from lenders.

So, let’s look at some possible approaches you can take to deal with your debt problem during Covid-19.

Your Top Priority Debt and Bills:

1. Rent and Mortgage

Most BTL landlords must give 6 months’ notice of eviction to most residential tenants. There are also temporary provisions to prevent many evictions. It is a difficult time for BTL property owners who have already lost rental income due to the 100 per cent mortgage interest tax liability.

If you are struggling to pay your monthly rent, try to speak with your landlord. You will find their views sympathetic towards your financial problems, and they may offer help to support you by offering a delay in the rent payment collection.

As a tenant, you can also get help with the cost of renting. You may get an extra discretionary housing payment (DHP) from your local council.

If you are paying a mortgage and receiving universal credit, you can get help for up to 39 weeks through universal credit. It is recommended that if you are receiving low income or your working hours have been reduced due to the corona pandemic, you should seek help in getting universal credit.

Kindly call us for further help and support for universal credit.

dealing with debt problems during covid-19

2. Council Tax

For all the families who are struggling financially, you can apply for council tax support from your local council. There are various financial supports available through the local council. You will get an extra 150 pounds of support in addition to your normal reduction on council tax if you are on a reduced rate of CT. The local council is offering payment arrangements if you are in council tax arrears, Kindly check directly with your local council.

3. Utility Bills

It is important that you do not miss monthly bill payments on gas, electricity, water and telephone-broadband providers. If you are behind on repaying bills on your utility usage, Speak to your utility provider immediately. They would offer you a payment plan and their approach will be sympathetic for bill payment assistance.
If you are born before 05 October 1954, there is a direct support grant for you from the UK government.

Please follow the link


You could get £140 off your electricity bill for winter 2020 to 2021 under the Warm Home Discount Scheme.

The money is not paid to you, it is a one-off discount on your electricity bill, between September and March.


Grants to help pay off your energy debts

If you are in debt to your energy supplier, you might be able to get a grant from a charitable trust to help pay it off.
The following energy companies offer grants and schemes that are open to anyone; you do not have to be a customer:

  • British Gas Energy Trust

There are also companies that offer grants specifically for their customers:

  • npower Energy Fund
  • Scottish Power Hardship Fund
  • Ovo Debt and energy assistance
  • E.on Energy Fund
  • EDF Energy Customer Support Fund
  • Bulb Energy Fund

When you apply for a grant, you will have to provide detailed information about your financial situation in your application. It could take a while to complete, and it might be worth getting help from a friend or family member.

4. HP Agreement (Vehicle Loan)

A hire purchase agreement is a priority debt. Any missing repayments are likely to result in your vehicle being repossessed and sold off, and the remaining loan amount after the sale of a vehicle could become liable for further debt recovery. A hire purchase agreement is the biggest expense after your mortgage or rent payment for many families in the UK.

You must ask for available support from your HP provider. It is likely they will offer you up to a six-month payment holiday.

If they do, it can really help you to deal with some of your debt problems during COVID-19.

Unsecured Debt – Credit Cards, Personal Loans, store cards, service invoices and payday loans

If you are struggling to repay your credit cards and personal loans due to low income, There is help and support available now.

In November 2020, the regulator (FCA) confirmed that people who have not taken a 6-month break from a monthly payment could now opt for it. The maximum support availability is extended up to a 6 month payment holiday.

If you have payday loans, you are only allowed to get help for a one-month payment holiday, but it would be interest-free.

Kindly note that interest will be added to your loan/credit card/mortgage/HP agreement/store card etc. if you opt for a payment holiday of up to six months.

You are still struggling to repay your unsecured debt, although you have taken the maximum benefit of a payment holiday of 6 months. We recommend that you seek debt advice from us because we are professional debt advisors who provide unbiased debt advice.

New debt problems during COVID-19 need to be tackled with new advice.

If you are already in a debt management plan, talk to the company running it and ask them to make lower payments or have a payment break. DMPs are informal, flexible arrangements and they can be changed.

The same applies if you have already made a payment arrangement with a lender/debt collector. Ask for it to be reduced to zero if necessary and tell the creditor if you have priority debts such as mortgage/rent/council tax/car finance arrears.

Insolvency – IVAs, bankruptcy, DAS and trust deeds

The Insolvency Service has brought in new rules, for the extra help available. Your IVA firm and your creditors will not want your IVA to fail because of a temporary coronavirus problem. So talk to your IVA firm about how they can help.

The Insolvency Service has brought in new rules, for the extra help available. Your IVA firm and your creditors will not want your IVA to fail because of a temporary coronavirus problem. So talk to your IVA firm about how they can help.

In practice and due to revised new debt collection regulations under the FCA regime, you will find many creditors who are more reasonable than you might expect, especially if you explain your financial position and willingness to pay and let them know you are getting help to try to sort it out.

These were some advisable tips from our end. We hope that adopting these approaches will help you deal with your debt problem during Covid-19.

Help and Support on Debt Worries

Please call our office on 0203 318 0990 for further advice and help on court claims and our team could offer you suitable service from our experts.

If you need some help with unknown debt or have been contacted by a collection agency, get in touch with us. There is a range of solutions depending on whether you are salaried or self-employed or you are a director or shareholder of a limited company. You should enter into a debt solution with us. Fees will be applicable.

All debt solutions need to be carefully considered. IVAs are formal solutions, failure to keep to the terms can result in your IVA failing, and you could end up bankrupt. Our office offers all types of debt solutions and we have strategic partnerships with Insolvency Practitioners for formal debt solutions.


Rajnish Tyagi is an Experienced and Cert DR qualified debt advisor at Acme Credit Consultants Ltd, which specializes in offering suitable debt solutions to clients to deal with various kinds of debt problems.

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  • Rajnish Tyagi

    Rajnish Tyagi possesses certification as a qualified debt advisor and specializes in writing about debt management and related topics. His aim is to assist individuals in comprehending and effectively managing their debts and credit issues. Additionally, Rajnish Tyagi holds the position of managing principal at "Acme Credit Consultants Ltd," an FCA regulated firm that provides tailored debt solutions to both individuals and businesses facing financial challenges.

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