Question

Jon,

I have £20,000 of debt from a few credit cards, and some consolidation loans. I tried to consolidate the credit card debt on 2 occasions but I just kept using the cards. I was on furlough due to the virus, but have now been made redundant. There are jobs to be had, but none pay what I was earning before. So now I am stuck. I have applied for Universal Credit, and will begin receiving that soon. I do not own any property, and the accounts are just in my name as I am single. I am unsure what do?

Any advice?

L

Answer

L,

I understand being in debt, and wondering how to find the money to pay the bills and debts is stressful. I tell people, there is always a way out of debt and the situation, however, sometimes you may not like the way out.

In your situation my advice would be to contact the banks, lenders, and credit card companies you owe and advice them of your situation.

You should be able to enter in a token payment arrangement for a period of time, or they may just allow you a time period of not making any payments.

It will come down to you deciding a time line, a line in the sand so to speak a to when you can, or will take the next step.

If you find suitable work soon and can begin making payments again, great. However if you cannot find suitable work and wages, you could consider a Debt Relief Order. A DRO is a form of insolvency and will affect your credit and credit score, and so will a token payment plan.

Anything you do outside of the agreed contractual payments will impact your credit, however, at this time it is more important to deal with the debts than worry about your credit.

Dealing with the debts helps to remove the stress.

I hope this helps.

Regards,

Jon

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