fbpx

Dealing With Debt Problems During Covid-19

There is continuous lock down in most of the part of United Kingdom. This blog looks at what support is available during these difficult times.

There are over four million payment breaks provided by lenders for mortgage and loans. These supports are coming to an end. Firstly they were three months payment holiday on offer which was later extended to another three months . If you have already had six months payment holiday on your loans and mortgage monthly payment ;you will not be able to get further breaks from lenders.

 Your top priority debt and bills:

In past, I have written extensively about priority debts and why should you not avoid paying repayments on these debts.

1. Rent and Mortgage

BTL landlords have to give 6 months? notice of eviction to most residential tenants . There are also temporary provisions to prevent many evictions. it is time that is more difficult for BTL property owners who are already lost their rental income under 100 % mortgage interest tax liability.

If you are struggling to pay your monthly rent, Try to speak with your Landlord. You would find their views sympathetic towards your financial problems and help to offer support to you by offering delay in rent payment collection.

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

If you are a paying mortgage and receiving universal credit, you can get help 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 corona pandemic, you should seek help in getting universal credit. Kindly call us for further help and support for universal credit.

2. Council Tax

All families who are struggling financially , you can apply for council tax support from your local council. There are various financial support available through local council. You will get an extra 150 pounds support in addition to your normal reduction on council tax if you are on 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 provider.  If you are behind on repaying bills on your utility usage, Speak to your utility provider immediately. They would offer you payment plan and their approach will be sympathetic for bill payment assistance.

If you are born before 05 October 1954, there is direct support grant for you from UK government.

Please follow the link

1.https://www.gov.uk/winter-fuel-payment

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.

2. https://www.gov.uk/the-warm-home-discount-scheme

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:

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

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)

Hire purchase agreement is a priority debt. Any missing repayments is likely to result that your vehicle can be re-possessed and sold off and remaining loan amount after sale of vehicle could become liable for further debt recovery.  Hire purchase agreement is a biggest expense after your mortgage or rent payment for many families in UK.

You must ask available support from your HP provider , it is likely they would offer you up to six months payment holiday.

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 repayment due to lower income. There is help and support available now.

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

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

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

Still struggling to repay your unsecured debt although you have taken maximum benefit of payment holiday of 6 months. You are suggested to take debt advice from us as we are professional debt advisors and our debt advice is impartial.

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

If you are bankrupt and paying an IPA, tell your OR?s office and the IPA will be reduced, to zero if necessary. This will not extend the length of time you have to pay an IPA for ? that cannot be more than 3 years.

In practice and due to revised new debt collection regulation under FCA regime, you will find many creditors 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.

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 a range of solutions depending on whether you are salaried or self-employed or you are a director or shareholder of a limited company.  Should you enter into a debt solution with us, fees will apply.

All debt solutions need to be carefully considered. IVA?s 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 partnership with Insolvency Practitioners for formal debt solutions.

Rajnish Tyagi is an experienced and Cert DR qualified debt advisor at Acme Credit Consultants Ltd, Which specialise in offering suitable debt solutions to clients.