I'm In Debt... Now What?
First and foremost, if you are in debt, you should speak to a qualified debt adviser.
This page provides a short summary of information relating to debt, however, it would be best for you to speak to an expert. You can locate and speak to a local debt adviser by visiting the Money Advice Service’s Debt Advice Locator page here.
Mortgage and Credit Card Arrears
If you are struggling to keep up with your bills and keep food on the table, speak to your bank. All banks and credit providers will be able to offer this but it is not underwritten by law.
If you unsure about how to go about asking for this, or simply want advice on how this may effect you existing debt, contact StepChange. They are the UK’s leading debt advice charity.
Speaking To Creditors
First and foremost, if you are in debt, you should speak to a qualified debt adviser.
One you have sought that professional advice, you may be recommended to contact those who you owe money. Citizen’s Advice have some great template letters for a variety of scenarios which could help you. If you are struggling to communicate your situation in your own words, these templates are a good first step:
Holding letter - ask creditors to hold off (Letter to ask creditors to hold off for a short period while you work out your budget or get advice)
No money to pay creditors - letter (Letter for when you have no money available to offer to your non-priority creditors)
Guidelines for using the letter templates (Guide on using sample letters to creditors)
Offer to non-priority creditor - letter (Letter for when you have some money available to offer your non-priority creditors)
Request to write off a debt - letter (Letter for when you can't make an offer of repayment and your circumstances are not going to improve)
Ending a hire purchase or a conditional sale agreement - letter (Letter to end a hire purchase or conditional sale agreement. You might need to do this if you can't afford the payments any more)
Do the above letters not cover your specific situation?
Useful Links
The National Debtline has produced a new factsheet here to help people understand what support is available to them in this situation.
Citizens Advice has also published useful advice on managing the potential disruption to your day-to-day finances, including more information on benefits and for self-employed people. Click here to read more.
Other Online Services are:
Avoiding Being Exploited
At the Just Finance Foundation we’re aware that Loan Sharks and exploitative lenders have been using the Coronavirus period to target those most vulnerable, particularly those already in arrears. Not sure what a Loan Shark is? A Loan Shark is a lender who might:
offer little or no paperwork, such as a credit agreement or record of payments
refuse to give information, such as the interest rate or how much you owe
take items as security, such as passports, bank cards or driving licences
increase the debt or add additional charges at any time
refuse to allow you to settle your debt
get nasty - they might resort to intimidation, threats or violence.
For more information on how to spot and report a Loan Shark, click here.