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What if I can’t pay my debts because of coronavirus?

Posted 17 March 2020

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Our debt solutions help people deal with their debts over the medium to long term, so they may not be what you need if you're finding it difficult to make repayments in the short term because of coronavirus. Here’s what you can do instead.

We’re all being affected by the coronavirus outbreak. The most important thing is to look after yourself and your family, and be considerate of others. But at the same time, we understand that the situation is likely to have a financial impact for many people.

You may find it difficult to meet your monthly commitments in the short term if coronavirus affects your income. We offer debt solutions that help people deal with their debts over the medium to long term. So they may not be what you need right now.

Instead, here’s some information that may be helpful if you’re worried about keeping up with repayments.

Coronavirus poster

Find out what you’re entitled to

    • • If you are employed, and either off sick or told to self-isolate, then your employer should pay you sick pay. At a minimum you will now get statutory sick pay of £94.25 per week from your first day off work. However, many employers offer more generous sick pay, at least for a period. Check with your employer.

 

    • • Many casual or agency workers may also be entitled to sick pay, but self-employed people are not. However, self-employed people may be able to apply for Universal Credit. People on zero-hours contracts can still get sick pay, and should ask their employer.

 

    • • If your employer closes your workplace, the situation can vary. Some employers are paying staff whilst their workplace is closed. Others are laying people off or asking them to take unpaid leave. Some employers are spreading the impact of a couple of weeks of unpaid leave over a number of months. Check with your employer.

 

 

    • • If you need to care for a relative, or if your child's school is closed and you need to look after them at short notice, your employer must give you time off. However, this may be unpaid.

 

  • • If you have a fixed rate savings account, you may be able to access your savings early. Some providers of these accounts have said they will waive the usual fees they would charge for this.

 

Prioritise your payments

The usual advice is that you should pay your rent, mortgage and any loan secured on your home before anything else.

However, if your income has suddenly gone down, paying your usual bills could make it difficult for you to afford groceries or medicine. So the government has announced that there will be a three-month mortgage holiday for homeowners struggling to make repayments due to the effects of coronavirus. If you need this, contact your mortgage provider as soon as you can.

Many providers of energy and other services are currently trying to be flexible, too. They might be willing to offer you a payment holiday or other support. Contact your utilities companies to see what they can do.

The Residential Landlords Association is encouraging their members to be ‘sympathetic’ to private tenants who struggle with their rent during this time. But this does not mean you should just stop paying your rent! Ask your landlord if you can miss some payments and make them up later. If they agree to this, make sure you get it in writing.

Speak to your lenders

Most loan providers, credit card companies and so on are willing to support anyone affected by coronavirus, to try and prevent them falling into financial difficulty. It's important that you get in touch with them as soon as you can.

Some lenders are offering to reduce loan payments and other debt repayments for two or three months for anyone impacted by the virus. And the credit reference agencies are working with them to ensure that these missed payments shouldn't have an impact on your credit score.

Follow the government guidance

Check gov.uk to find out what you need to do to keep yourself and your loved ones safe. Just to remind you, at the time of writing the government’s advice is for everyone to:

 

1. Avoid contact with someone who is displaying symptoms of coronavirus (COVID-19). These symptoms include high temperature and/or new and continuous cough.

2. Avoid non-essential use of public transport. Vary your travel times to avoid rush hour, when possible.

3. Work from home, where possible. Your employer should support you to do this.

4. Avoid large gatherings, and gatherings in smaller public spaces. This includes pubs, cinemas, restaurants, theatres, bars, clubs and so on.

5. Avoid gatherings with friends and family. Keep in touch using remote technology such as phone, internet, and social media.

6. Use telephone or online services to contact your GP or other essential services.

 

It’s a worrying time for all of us, but we can’t bury our heads in the sand. Follow the official advice on how to look after yourself and other people; be sure to apply for everything you’re entitled to; and ask your lenders for help if you’re struggling.

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.