DEBT is far from uncommon and many people borrow money via loans, credit cards and mortgages.
But if debt's getting on top of you, and you're struggling to pay money back, you should always seek help – and there's plenty out there.
The average Brit has personal debt of £3,724 according to the Money Charity, and £1,962 of that is on a credit card.
Tackling problem debt is best done sooner rather than later so you don't end up further in debt, paying more than you need to or with creditors at your door.
Here's how you can get help with debt, from breathing space to debt advice and the Universal Credit support you'll find.
1. Ask for breathing space
Hard-up Brits across England and Wales can now apply for the two-month buffer, designed to give people time to get long-term debt help.
The scheme covers a wide range of debts including council tax arrears, personal tax debts and benefit overpayments, as well as credit cards and loans.
Debts will be frozen for this period and you won't be chased by debt collectors or bailiffs, or be charged interest.
During the breathing space period, debtors must work with professional advisers to get back on track with repayments.
You can find out more about who's eligible and how to apply.
What is ‘breathing space’?
If you apply for “breathing space interest on your debt will also be frozen.
The government scheme, run by the Insolvency Service, will roll out from today (May 4).
The scheme aims to give hard-up Brits time to seek long-term debt advice.
You can only apply for breathing space once in a 12-month period.
Contact a debt adviser to apply for the two-month buffer.
If you're eligible, your debt adviser will put an application in to the Insolvency Service on your behalf.
You must keep up with your debt repayments during the 60-day period where you can – otherwise your breathing space may be cancelled.
2. Get a Universal Credit advance
For new Universal Credit claimants waiting for the first payment, there's an advance available to avoid getting in to debt – and there's now longer to pay it back too.
An advance payment of Universal Credit is available to help you get through the five-week wait.
This is essentially a loan and you will have to pay it back which will reduce future payments.
But claimants now have 24 months to pay it back, rather than 12, so you won't lose out on as much each month and you can avoid falling behind on bills.
3. Change how you're paid Universal Credit
You can also ask for a change in the way you are paid Universal Credit which can help if you're in debt.
Citizen's Advice says this could mean:
- Getting paid every two weeks instead of monthly
- Getting housing payment paid directly to your landlord
- separating Universal Credit payments from your partner
Doing this could help you manage your money better and deal with some debts.
If you're struggling with rent arrears and are on Universal Credit, it's best to speak to someone as soon as possible as you can be evicted in the worst case.
How to apply for Universal Credit advance payment
AN advance payment is a loan that you can ask for to help you through the five week wait for your first Universal Credit payment.
You can apply for an advance payment in your online account or through your Jobcentre Plus work coach.
You're allowed to request the loan from the moment you first apply for Universal Credit until the date you get your first payment.
You'll need to explain why you think you need the advance, verify your identity (at your first Jobcentre Plus interview) and provide bank details for the advance.
If you can't open a bank account, speak to your work coach.
You'll usually be told the same day if you will get your advance loan.
If you need help, call the Universal Credit helpline on 0800 328 5644 (Textphone: 0800 328 1344).
Lines are open from 8am-6pm, Monday to Friday.
4. Call a free debt helpline
There are plenty of services you can take advantage of and they offer free and friendly advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- Money Advice Service – 0800 138 7777
- Citizens Advice – 0808 800 9060
- StepChange – 0800 138 1111
- National Debtline – 0808 808 4000
They can also help you take the next steps if you need a debt management plan (DMP) to tackle your debt or an Individual Voluntary Arrangement (IVA). These are agreements for managing multiple debts.
5. Ask your energy company for help
If you're struggling to pay your energy bill, your supplier must work with you to agree an affordable payment plan.
You can ask for:
- a review of your payments and debt repayments
- payment breaks or reductions
- more time to pay
- access to hardship funds
Energy companies offer schemes, grants and benefits to help with the cost of heating your home.
Citizen's Advice has a list of what the major energy companies offer – how much this support is varies. You can also ask your supplier directly.
Some of these schemes might offer help buying energy efficient white goods too.
In winter you might be eligible for support from the government for heating your home so it's worth checking you're not missing out.
Water companies also have hardship schemes and grants that can help you if your behind on your bill.
6. Ask your bank for help
Your bank must help you if you are in "persistent debt" with your credit card.
Persistent debt is when you pay more in charges and interest than your actual repayments, making it difficult to pay off what you owe.
Banks are obliged to write to you if this is and issue and may offer a payment plan and may freeze or cut interest if you can't afford repayments.
If you get a persistent debt letter talk to your lender, but also speak to them if you haven't and are worried about debt or can't keep up repayments.
How to cut the cost of your debt
IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money
Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
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, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans
7. Check what benefits you can get
There's an estimated £16billion worth of benefits out there which are going unclaimed.
Money that you're entitled to but not claiming could give you extra money that can be used to tackle debt – or even prevent you falling into debt in the first place.
There are many benefits out there, even for those in work and using a benefits checker tool can tell you what you're missing out on.
They're free and easy to use and can also show you the next steps of how to claim.
8. Ask your local council for help
Councils have funds to support those struggling and this can range from hardship funds offering cash in an emergency to vouchers for buying food.
What's on offer depends on where you live and this may include debt advice too – you can check what your local authority is offering directly.
If you have fallen behind paying Council Tax it's essential to tackle this immediately.
Council tax is considered a priority bill and falling behind on it can can result in court action or even imprisonment.
The council can offer discounts and reductions, depending on your circumstances.
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