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Money and debt

DEBT AND MONEYDebt is an ever-increasing problem in the United Kingdom, affecting people of different ages, backgrounds and incomes. The nature of the problem means that once started, the cycle of debt and poverty can be difficult to break and, for some, the COVID-19 pandemic has added further difficulties and misery.

Debt can lead to problems at work, relationship breakdowns, loss of personal assets, county court judgments, or in extreme cases, criminal prosecution. Debt can arise in many forms, from credit cards to mail-order catalogues, purchase agreements to mortgages, and not having a basic understanding of domestic finance.

The information in this section is for guidance only. If you have debt or money worries, take the first step by contacting one of the organisations below ASAP. 

Organisations that can help

0800 240 4420 | Citizens Advice
0808 808 4000 | National Debt Line
0800 138 1111 | Step Change Debt Charity
Online benefit calculators | Entitled To
Options for dealing with your debts | GOV.UK

Finance and money worries and concerns in a time of COVID-19

Coping with money worries | NHS Inform
 Debt and coronavirus advice | Step Change Debt Charity
 Coronavirus finance and bills help | Money Saving Expert
 If you can’t pay your bills because of coronavirus | Citizens Advice

Debt crisis warning as UK reports steep rise in emergency borrowing | The Guardian | 12 Nov 2020
Charity calls for ‘full review of debt options’ in the wake of Covid-19 | Money Advice Trust | 28 Oct 2020
 Coronavirus: six money-saving ideas for lockdown and beyond | BBC | 8 May 2020

Is this you?

Look down this list. If you can relate to one or more of the points below, then call one of the organisations listed.

  • Anxiety, stress and/or depression related to money matters
  • Unopened or hidden bills
  • Repeated requests or threats from your landlord for rent
  • Fucking the landlord or sleeping with him to pay the rent
  • The threat of disconnection of utility services
  • Ignoring the telephone or monitoring calls from creditors
  • Travel card 'won't work.'
  • Bumping into guys to whom you owe money, and making lame excuses
  • Afraid to open the front door
  • Worried about losing your home

When it starts to go wrong

  • Dreading the arrival of the post
  • Court summons
  • Threats of legal action
  • The threat of bankruptcy/ liquidation
  • Bailiffs at the door
  • Income and tax demands
  • Multiple debts
  • ‘Robbing Peter to pay Paul’
  • Tax and VAT demands
  • Avoiding the bank
  • Never can get cash out of cashpoints
  • Withdrawal by your bank of services
  • Turning to prostitution solely to pay off debts

Debt or borrowed money comes in all shapes and sizes

Debt or borrowed money comes in all shapes and sizes. Properly managed credit can – and does – work for many people. But, we all have periods when it can be difficult to manage the money we have coming in. It can be particularly difficult if we have fallen on hard times, for example, through health problems, an unexpected period of unemployment, redundancy or a change in personal circumstances, Even a delayed benefit payment can seem to tip the balance against us.

But, ever hopeful that the money will somehow ‘miraculously appear’ or ‘just turn up’, the need to comfort ourselves and spend what we don’t have can be overwhelming. For some, it’s a comfort meal here or a small treat there. For others, it's 'plastic' holidays and party, party, party. Then it’s a matter of patching up the problem with increased spending limits, new credit cards and ignoring the problem by spending more. This behaviour triggers the debt problem from which point we make it worse by not dealing with it.

The sorts of things that can happen

  • You miss regular payments, ‘rob Peter to pay Paul’ and take out additional loans, which lead to multiple debts and increased pressure to pay it all back.
  • You promise to repay creditors – usually unrealistic amounts due to fear/guilt/pressure – then break promises resulting in increased pressure (e.g. debt collectors).
  • This is followed by legal pressure: letters from solicitors, court summons (often ignored), court orders often leading to bailiffs’ action and then agreeing to unrealistic repayments.
  • Finally, furniture/ equipment are seized by bailiffs, utility supplies can be disconnected, you can lose your home and face potential imprisonment.
  • Underlying this, there is often denial, depression, frustration and anger accompanied by relationship breakdowns, domestic violence, deterioration of physical health, problems at work, mental breakdown… if they haven’t already happened. It’s a miserable and frightening existence, and so sorting debts out sooner rather than later can reduce the likelihood of it happening in the first place.

Tips and guidance

  • Don’t bury your head in the sand. The problem will not go away. The longer you leave it, the worse it gets.
  • Do not be tempted by consolidating your loans. Take advice, especially on secured second loans. You could end up losing your home.
  • Make sure you pay your priority debts. eg mortgage, council tax, fines etc.
  • Contact your creditors immediately either by phone or write to them. You may be amazed as to how helpful they can be.
  • Check your entitlements ie benefits, insurance claims etc, to work out your income/ expenditure and an offer of repayment.
  • Keep a paper trail. Note every phone conversation, letter, date, time and name of the person to whom you spoke.
  • Do not accept rejection. Creditors are like any business, and they are only as good as the staff. If you find a staff member unhelpful, ring back and speak to someone else, you may be amazed at the difference.
  • Do not ignore court papers. Courts actually work to your advantage as much as the creditors. The majority of court judgements are issued by default because the debtor doesn’t respond!
  • Always attend court hearings. There is no jury, and you will not be sent to jail (unless you are a criminal, of course).
  • Disclose all information. Always declare all debts and income/expenditure. Do not underestimate or exaggerate your expenses.
  • Keep in regular contact with your creditor. If you promise to return a call, make sure you contact them before they have to contact you again.

Bargain tips (most of us have been there)

  • Don’t borrow money unless you can afford to pay it back.
  • Don’t lend money unless you can afford not to get it back.

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