Notice of defaults: everything you need to know
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Plans for up to six weeks ‘breathing space’ for people in debt, announced by The Treasury.
Back in June we brought you the news that both the Conservatives and the Labour party were promising more breathing space for people in debt in their manifestos. Now The Treasury has confirmed that more help for people with serious debt problems will become law by 2019. But what does this actually mean for people struggling with problem debt?
What will change?
People struggling with their repayments may be given a six week period where they are protected from any more interest and charges being added to what they owe, or any further legal enforcement action being taken against them. Those six weeks will provide people with a chance to seek professional debt advice and find the best solution to deal with their particular situation.
Some debt charities however, have called for the ‘grace’ period to be extended for longer than six weeks. There have also been calls to include public sector debts in these plans as well, like local authorities and HMRC, so the rules are the same across the board for all creditors.
Extra protection for people in debt
As part of the changes, the Treasury is also consulting on creating a legally binding type of Debt Management Plan in England and Wales. This would bring the rest of the UK more in line with how Debt Arrangement Schemes (DAS) already work in Scotland.
DAS is a Government run formal debt solution for people who can’t afford their repayments. It works by setting people up on a DPP (Debt Payment Programme) and lowering their repayments towards their unsecured debts to an affordable level. You keep paying this amount till the whole of the debt is paid off.
This is also how a Debt Management Plan (DMP) works in the rest of the UK but unlike a DMP, DAS also protects debtors from further legal action and creditors have to freeze interest and charges as well. So these new plans will provide the extra benefits that DAS currently provides in Scotland, at least for a certain time period.
What if I can’t pay my debts now?
This announcement from the Treasury is definitely good news for people in debt, but it’s only due to come into force in 2019 – so what should you do if you’re struggling with debts now?
If you can’t afford to pay your debts – don’t panic. There is a range of different debt solutions available now that might be able to help you. Get in touch with one of our expert advisors using the options at the top of the page to find out which debt solution is best for you and how to move forward and tackle your debts.
by Christine WalshBack to blog home