8 ways to get debt help
DEBT is far from rare, and many people borrow money through loans, credit cards and mortgages.
But if debt is overwhelming you and you are struggling to pay off, you should always seek help – and there is a lot of it.
The average Briton has personal debt of £ 3,724 according to Money Charity, of which £ 1,962 is on a credit card.
It’s best to tackle the debt problem as early as possible so that you don’t get into more debt, pay more than you need or with creditors on your doorstep.
Here’s how you can get help with your debt, from debt relief to debt counseling and the Universal Credit support you’ll find.
1. Ask for space to breathe
Hard-core Brits across England and Wales can now apply for the two-month buffer, designed to give people time to get long-term debt relief.
The plan covers a wide range of debts, including municipal tax arrears, personal tax debts and benefit overpayments, as well as credit cards and loans.
Debts will be frozen during this period and you will not be sued by debt collectors or bailiffs, nor will you be charged interest.
During the respite period, debtors should work with professional counselors to get back on track with repayments.
You can find out more about who is eligible and how to apply.
What is the “breathing space”?
If you apply for “respite,” the interest on your debt will also be frozen.
The government program, managed by the Insolvency Department, will be rolled out from today (May 4).
The program aims to give hardened Britons time to seek advice on long-term debt.
You can only request breathing space once every 12 months.
Contact a debt counselor to request the two-month buffer.
If you qualify, your debt counselor will file an insolvency service claim on your behalf.
You must keep track of your debt repayments for as long as 60 days you can, or your respite could be canceled.
2. Get a universal credit advance
For new Universal Credit applicants awaiting the first payment, an advance is available to avoid going into debt – and there is now more time to pay it off.
A universal credit advance payment is available to help you get through the five week wait.
This is basically a loan and you will have to pay it back which will reduce future payments.
But claimants now have 24 months to repay, instead of 12, so you won’t lose that much each month and you can avoid falling behind on bills.
3. Change the universal credit payment method
You can also request a change in the way you receive universal credit, which can help if you are in debt.
Citizen’s Advice says it could mean:
- Get paid every two weeks instead of monthly
- Obtain housing payment directly from your landlord
- separate Universal Credit payments from your partner
It could help you manage your money better and pay off some debt.
If you are struggling with rent arrears and are on universal credit, it’s best to speak to someone as soon as possible as you could be evicted in a worst-case scenario.
How to apply for advance payment of universal credit
A prepayment is a loan you can apply to help you with the five-week wait before your first Universal Credit payment.
You can request an advance payment on your online account or through your Jobcentre Plus work coach.
You are allowed to apply for the loan from the time you first apply for universal credit until the date you receive your first payment.
You will need to explain why you think you need the advance, verify your identity (during your first Jobcentre Plus interview) and provide bank details in advance.
If you can’t open a bank account, talk to your work coach.
You will usually be told on the same day whether you will get your loan early.
If you need help, call the Universal Credit helpline on 0800 328 5644 (Textphone: 0800 328 1344).
The queues are open from 8 a.m. to 6 p.m., Monday to Friday.
4. Call a free debt hotline
There are many services that you can take advantage of and they offer free, user-friendly debt management advice.
Most of them can offer you free advice and help in person, over the phone or online.
They can also help you take the next steps if you need a Debt Management Plan (DMP) to deal with your debt or an Individual Voluntary Arrangement (IVA). These are agreements to manage several debts.
5. Ask your energy supplier for help
If you’re having trouble paying your energy bill, your supplier should work with you to come up with an affordable payment plan.
You can ask:
- a review of your payments and debt repayments
- payment breaks or reductions
- more time to pay
- access to hardship funds
Energy companies offer programs, grants, and benefits to help pay for the cost of heating your home.
Citizen’s Advice has a list what big energy companies offer – the amount of support varies. You can also ask your supplier directly.
Some of these programs could also help with purchasing energy efficient white goods.
In the winter, you might be eligible for government help to heat your home, so it’s worth making sure you’re not missing out on anything.
Water companies too have plans for difficulties and grants that can help you if you’re behind on your bill.
6. Ask your bank for help
Your bank should help you if you are in “persistent debt” with your credit card.
Persistent debt is when you pay more fees and interest than your actual repayments, making it difficult to pay off what you owe.
Banks are obligated to write to you if it does and issue and may offer a payment plan and may freeze or reduce interest if you cannot afford to repay.
If you get a persistent debt letter, talk to your lender, but also talk to them if you haven’t and if you’re worried about debt or having trouble repaying.
How to reduce the cost of your debt
If you have a lot of debt this can be really worrying. Here are some tips from Citizens Advice on how to take action.
Check your bank balance regularly – knowing your spending habits is the first step in managing your money
Work out your budget – writing down your income and taking essential bills such as food and transportation
If you have money left over, plan ahead what you will spend or save. If you don’t, look for ways to cut your costs.
Pay more than the minimum – If you have credit card debt, try to pay off more than the minimum amount on your credit card each month to lower your bill faster.
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritize the more expensive card (the one with the highest interest rate)
Prioritize your debts – If you have multiple debts and can’t afford to pay them all, it’s important to prioritize them
Your rent, mortgage, council tax and energy bills should be paid first as the consequences can be more serious if you don’t pay
Take advice – If you are struggling to pay off your debts month after month, it is important that you get advice as early as possible, before it accumulates even more
Groups like Citizens Advice and National Debtline can help you prioritize and negotiate with your creditors for more affordable repayment plans.
7. Check the benefits you can get
There are around £ 16bn in unclaimed benefits.
Money that you are entitled to but don’t claim could give you extra money that can be used to fight debt – or even keep you from getting into debt in the first place.
There are many benefits even for those who work and using a benefit checker can tell you what you are missing out on.
They are free and easy to use and can also show you the next steps to make a claim.
8. Ask your town hall for help
The councils have funds to support those who struggle and this can range from hardship funds offering emergency money to vouchers to buy food.
What’s on offer depends on where you live and may also include debt advice – you can check directly what your local authority has to offer.
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If you have fallen behind in paying council tax, it is essential that you tackle it immediately.
Housing tax is considered a priority bill and delay can result in legal action or even jail time.