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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. These supports are coming to an end. Firstly, they were three months payment holiday on offer which was later extended for 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.

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

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 a time that is more difficult for BTL property owners who have 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 they may offer help to support you by offering delay in the rent payment collection.

As a tenant, you can also get help with the universal credit towards 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

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 that 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 are likely to result that your vehicle can be 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 would offer you up to six months 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 6 months break on a 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 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 on your loan/credit card/mortgage/HP agreement /store card etc. if you opt for a payment holiday of up to six months.

Still struggling to repay your unsecured debt, although you have taken the maximum benefit of a 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.

New debt problems during covid-19, needs to be tackled with new advice.

Your top priority debt and bills: Rent and Mortgage Council Tax Utility Bills HP Agreement (Vehicle Loan) Unsecured Debt Insolvency

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 are 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.

Author:

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.