If you have mounting debts don't panic but do act as soon as possible as debts won't just go away. Don't be tempted to ignore calls or letters from creditors but take action to deal with the problem. There are many ways you can you reduce your debt and improve your cash flow:
- If you are on a low wage or in receipt of state benefits you are likely to qualify for free help to deal with your debts under the Legal Aid Scheme.
- Try to keep up to date with priority debts i.e. your mortgage or rent, utility bills and council tax bills.
- Check with your utility providers, many now offer schemes to help householders who are struggling to pay their bills.
- If you are in receipt of pension credit, income support or income based job seekers allowance you may be able to have amounts deducted from your benefit and paid directly to your fuel provider (gas and electricity) in respect of arrears. This may prevent you being disconnected and demonstrates your willingness to pay off your debts.
- If you are in receipt of state benefits you can apply, in certain circumstances, for a crisis loan. To find out if you qualify for a crisis loan contact your local benefits office.
For non-priority unsecured debts there are various options available to you to reduce your debts:
- Try to negotiate a lower payment with your creditor - most creditors will accept a lower payment if you are able to demonstrate that you are unable to pay the full amount.
- Apply to your local County Court for an administration order (this is subject to certain conditions).
- If you are facing serious financial difficulty then you should seek advice on whether or not you should apply for bankruptcy.
Mortgage Debt Advice
If you are behind in your mortgage payments it's important to deal with the problem straight away. Contact your mortgage lender immediately, possibly with a detailed proposal of your current circumstances. Lenders should only turn to repossession as a last resort after considering repayment holidays or extending the term or type of your mortgage.
If you are at a real risk of losing your home, perhaps because possession proceedings have already been issued in your local County Court, then you should contact your Local Housing Needs Department at the Local Authority who may be able to help find you somewhere else to live.
Lanyon Bowdler is a law firm based in Shropshire with offices in Ludlow, Telford, Shrewsbury and Wellington - our lawyers and debt advisers assist clients throughout the UK.
For expert legal advice on your debt and applying for insolvency, call us on freephone 0800 838 019 to find out more about how Lanyon Bowdler can help you.