When you’re dealing with debt it’s important to remember that you’re not alone, and many organisations offer debt help.
Here, we run through eight ways to help you get your finances back on track.
Speak to your lenders
Many lenders offer debt help to customers facing financial difficulties that affect their ability to repay what they owe. So if you’re having trouble paying off your debt, speak to your lender as soon as possible because they may be able to offer support.
For example, your lender may agree to smaller monthly repayments, using a debt management plan or payment holiday, if you can prove that you’re already paying as much as you can afford to.
Other lenders may offer a partial settlement. This is when you only repay a percentage of the total debt you owe because it’s unlikely that you’ll be able to repay the full amount.
» MORE: How to get out of debt
Get free expert debt advice
If you find your debt is unmanageable, contact a free, independent debt advice service as soon as possible for help. A debt adviser can talk through your financial circumstances and help you find the best way to deal with your debt.
A debt adviser can also help you apply for temporary protection from your creditors for up to 60 days through the ‘Breathing Space’ scheme, though you’ll still need to continue making your repayments and will need to apply through a debt adviser. You can apply if you live in England and Wales, have not used the scheme in the last 12 months, and have problem debt.
Scotland offers similar protection through a programme called the Debt Arrangement Scheme (DAS). Northern Ireland doesn’t currently offer an equivalent temporary protection scheme.
» MORE: How to get free debt advice
Apply for government support and grants
If you can’t pay your debts, you may need to apply for a Debt Relief Order (DRO). A DRO can only be used if you owe less than £30,000, don’t own a property and don’t have much money in savings. If you are unable to pay off your debts after 12 months, under a DRO your debt is usually written off.
If your debt is unmanageable and you can’t pay off your debt, you may need to declare yourself bankrupt. However, it’s always worth checking if there are other ways to deal with your debt first. Bankruptcy is a legal tool used to deal with debt that has spiralled out of control. An Insolvency Service adjudicator will decide if you should be made bankrupt.
Speak to your employer or benefits adviser
If you are employed, some companies offer schemes, loans and services that can help you access debt help. For example, having a confidential chat with HR or researching your company’s benefits package can help point you in the right direction of any support available.
If you are claiming benefits, contact your adviser to check whether they can offer any advice and to check whether you are claiming all the benefits you are entitled to.
» MORE: Getting an employee loan
Reach out to close family or friends
Finances can be a tricky topic to discuss, but if you have family and friends you can trust, they can be a great source of debt help. For example, you may be able to get recommendations for organisations or charities that someone else used. They can also offer support and encouragement as you get your finances back on track.
If you are already financially tied to another person, for example, if you have a guarantor, speak to them about your debt situation as soon as possible.
Borrowing money from family or friends could help you deal with your debts, though this will not be an option for everyone. It’s important to consider the impact it may have on your relationship if you find yourself unable to repay the money and to have a written agreement to avoid disputes in the future.
» MORE: Loans from family and friends
Speak to your partner
Debt can also be a source of tension and stress within relationships, so being transparent about your finances can help ensure that you’re on the same page and can support each other.
It’s important to be honest with your partner about any debt issues if you’re in a serious relationship, married or living together. Bear in mind that if you have plans to join your finances, their ability to get credit may be affected by your borrowing history.
If you have a joint debt, you can still apply for the Breathing Space Scheme – even if your partner doesn’t sign up for it – while spouses, civil partners or couples living together can apply to Scotland’s Debt Arrangement Scheme (DAS), so long as they both agree.
Join an online community
Online communities and forums can offer support and encouragement as you pay off your debt. For example, Debtors Anonymous UK offers support groups in person and online for people in the process of getting their finances back on track.
There may also be online groups offering debt support online and in your local area too. Connecting with people in a similar situation or who have overcome debt already can help you get tips and advice to use on your journey to becoming debt-free.
Contact a mental health charity
Our finances, particularly dealing with debt, can cause severe stress and affect our mental wellbeing. So taking care of your mental health is a vital part of your financial health. Charities such as Mind and Mental Health UK offer free advice and resources to help. You can also contact organisations such as Samaritans if you need someone to talk to and offload any worries.
Remember, that you don’t have to struggle with managing debt by yourself. And if you’re facing serious difficulty, contact a debt charity as soon as possible to help you find the best way forward.
» MORE: How can mental health affect your finances?
When should I seek debt help?
You should seek help with debt as soon as possible if you are:
- missing credit or loan repayments
- regularly worrying about money
- struggling to pay household bills
- relying on credit such as an overdraft, credit card or loan to get by
- avoiding calls or letters from your creditors
- concerned you may miss credit or loan repayments in the future
What should I do if someone I know is having problems with debt?
If you are concerned that someone you know is having trouble with debt, encouraging them to get help is an important first step. Being a source of support and listening to them can help ensure that they don’t feel alone and empower them to take action. You could also signpost them to debt charities, which will be able to offer them further support.
What should I do if I can’t afford to pay my debts?
Dealing with debt can be stressful, especially if you’re being pressured by your creditors, debt collectors or bailiffs. If you can’t afford to repay your debts, you can ask your creditor for a grace period of around 28 days, during which they will not contact you. This could give you time to seek help from a free specialist debt adviser to work out the best strategy for managing your debt.
You can get free debt help by contacting charities including:
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