Actions if you are struggling to pay upcoming bills and debts.

Last Updated on 23 March 2020 by Dan

Hello everyone. The present economic environment and shutdown is proving a really worrying time for plenty of people who naturally are worrying about paying the bills and keeping a roof over their head. Many do not have significant or any savings on rely on.

The advice from Government became clearer in Boris Johnson’s 20th March briefing, where he stated that Government grants would pay 80% of the wage of a employee who had been forced to furlough during the present crisis. This will be expensive for the country but is good news and the right thing to do, as it should hopefully enable companies to resume normal employment as and when things go back to being more normal.

I’d also like to recommend some resources. The UK Money Advice service has set up a Facebook group for those with money questions, and is being supported by the UK Money Blogging community.

I also think Debt Camel, run by Sara Williams is one of the best resources I’ve seen for helping people with money issues and would very much recommend it. Her post on what to do if you are facing debts or think you may be unable to pay things thanks to the Coronavirus situation is here and absolutely excellent.

My own post is for those who are just before that point – not facing an immediate emergency/inability to pay but are in a position where that is a real possibility and they are concerned about the future.

There are a few actions I would suggest may be sensible to take immediately:

  • Take stock of any and all savings you have. Work out exactly what you have on hand and can access.
  • Get your bank and credit card statement and write down all your outgoings for the last two months. Classify them into essential spending (rent and food) and non-essential spending (other). Start by working out what you can eliminate if anything from non-essential spending.

I wrote a post some time ago on building a process to get out of credit card debt which goes into these in more detail. The fundamental principles of the early part of the article cover the above items and general budget management – just ignore the references to credit cards.

Some advice:

  • If you’re heading towards a position where you can’t pay out bills, don’t use lending (particularly payday style lending as a first resort). These are exceptional services and banks have been given instructions to adopt and forgiving approach. It is worth calling your bank and having an honest conversation about your finances.
  • Despite the reputation of banking they do not want to see you in trouble, and they may be able to offer you some forbearance that may assist you.
  • Ditto the above on credit card bills. You will find them most helpful if you approach them constructively, and say you know your duty to pay bills but the present situation has made your planning challenging.
  • If you rent from a housing association, they have been given instructions to make allowance for rent. It’s worth having a conversation with your provider.
  • I’m a bit more wary of speaking to private landlords until you have to unless you have a good relationship with them. Advice and legal positioning is less clear in this case, and you make want to make this a “priority bill payment”. The Government has put in place a ban on evictions for a 3 month period – beyond this is a little more uncertain.
  • Speak to your local council about if they can make allowance for council tax bills.

Ideally, you should take action on these before you run into emergency debt management, not when you’re at that point.

There’s a theme here of speak to people. Everyone is going through this right now. Small businesses and sole traders probably cannot accept requests for delays, whereas larger institutions have more flexibility.

It is also worth trying to keep track of the latest from the Government. They are aware of the lack of detail and trying their hardest to re-mediate it. If you can survive in the very short term, I do believe help will be on the way, but what shape it may be in may be a complete unknown. Update: The Government’s latest measures to help is being constantly updated on this page here.

Government advice on renting and eviction and the protections put in place around it can be found at this page here.

If it doesn’t appear that will help, we may need to explore looking at some forms of lending but it’s important to minimise the costs of it. I stress, my advice is to hold off from this unless it’s absolutely essential and unavoidable.

I know a sense of community has eroded a lot from what it’s been, but in these types of circumstances it means a lot. Where you have people around you and friends and family, reach out to them for support.

Simply put – look out for those around you. You may just find they look out for you to.

If you are struggling with anxiety around the virus, please find an earlier post here on some tips and advice for your mental wellbeing from myself and other UK money bloggers.

You are not alone. And humanity will get through this. Together.

Friends supporting each other

Keep safe and well. I can do my best to answer any questions in the comments.

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