Emergency Debt Guide

During a personal crisis, it can be difficult to stay on top of your finances. The break-up of a relationship, the repossession of a property, bereavement - these things happen to people every day and they can have a devastating effect.

Debt is an added pressure during a crisis and often people simply do not have the spare time or the spare energy to deal with debt problems. However, debt cannot and should not be ignored. As difficult as it may seem, dealing with debt (even during a crisis) is something you need to do - but you may need some extra help or information.

Here are some suggestions for dealing with debt during three 'crisis' events. Should you need any additional guidance on dealing with your debts, please contact one of our advisers.

Divorce and dealing with debt

Divorce is a personal crisis, but can also be a financial crisis. You are likely to have less disposable income following a divorce, as you will not be sharing living expenses anymore. You may even have to pay for things like bills for the first time. Two very important things to consider at this point are:

  • Where you both want to live and where you can afford to live.
    • The living arrangements of any children and maintenance for them.
    • Keeping your mortgage or rent payments affordable, while still repaying your debts.
  • Any joint debts - know your rights.
    • Divorce law sees debt in a marriage as a joint liability. However, lenders can only chase the person whose name is on the original agreement for repayment. If you have a joint debt and your partner's name isn't on the agreement, you will have to pursue them yourself for payment.

Repossession: an emergency debt guide

Preventing repossession

A redundancy, or other factors out of your control, such as the rising cost of living, can put you on a slippery slope to mortgage arrears - and possibly even repossession.

However, repossession is a last resort. Lenders will always work with you to avoid repossession, so it's vital that you talk to them about your situation. Hopefully you'll be able to manage your mortgage repayments, even if you are in arrears, without ever getting to the stage where repossession is the only way forward.

If the cash you need to make mortgage payments is being spent on other debts, a debt management plan or IVA (Individual Voluntary Arrangement) may be the answer, helping you keep enough back for your mortgage payments and other priority expenses every month.

On either of these debt solutions, we treat your mortgage payments as a priority. We would negotiate with your unsecured lenders to reduce what you have to pay towards those debts every month, to free up the money you need for your mortgage payments. 

Coping with repossession

If your home is repossessed, you'll need to consider the following:

  • Living arrangements
    • What you can afford.
    • Staying with family or friends if possible.
    • Continuing to repay any other debts, to avoid further legal action.

The repossession of a home is certainly a crisis. However, it is possible to rebuild your life following an event like this and maybe even own your own home again.

If your home has been repossessed, it's likely that your finances are in a bad way and you may have unsecured debt problems to deal with as well. A debt management plan or IVA could help you to keep your unsecured debt payments affordable, while keeping enough back for living expenses.

Bereavement and debt

During a time of mourning, it can be very difficult to make financial plans. Losing someone important in your life can make it difficult to carry on with day-to-day responsibilities.

It's natural not to think about money at a time like this, but without savings or someone to support you financially, it's possible you could get into debt - or deeper into debt.

Dealing with lenders, or people you owe money, when you are mourning is likely to be even more difficult than before, especially if you have multiple lenders. If you're in trouble with your debts, professional help could make a big difference.

How a debt management plan or IVA could help

We provide advice on a whole range of financial solutions, such as debt management plans and IVAs (Individual Voluntary Arrangements), which could help you deal with your debts if your situation takes a turn for the worse.

If you think you might benefit from some professional help with your debts, please don't hesitate to contact us. We may be able to help you repay your unsecured debts at a rate you can afford.

Debt solutions are subject to conditions and acceptance. Your credit rating may be affected. Fees payable if continuing services are provided. Repaying debt over a longer period of time may increase the total amount to be repaid. Calls may be recorded for training and quality purposes. Calls to 0800 numbers from BT landlines are usually free, calls from other networks may vary and you should check with your network provider for full details of your service.

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