Battens Solicitors Debt Recovery Manager Angela Loveless has some timely advice:
Rising food and energy prices, the end of Furlough and the cut to the £20 Universal Credit payment will put many households under severe financial pressure this winter.
Incomes have been hard hit since the beginning of the pandemic. For those in full time employment there was a fall in salary of 19% and for part time workers the fall was 35%. This meant that over a fifth of UK adults were unable to afford or pay for essential household items such as food, heating and lighting, as well as struggling to pay their mortgage or rent.
October also saw the withdrawal of the £20 a week increase to Universal Credit. 5.8 million people who had received UC will now see their incomes fall by £1,000 per year. This combined with increasing gas, fuel and food prices could push an estimated third of households into debt.
The debt trap
Many families turn to payday loan companies to survive, paying an extortionate amount of interest on their borrowings. Interest-free offers on credit cards seem appealing, but if the borrowing is not paid in full by the end of the agreed period then interest will be applied, resulting in mounting debt. ‘Buy Now, Pay Later’ deals also exacerbate the problem.
Before taking out credit, do your research. And ask yourself: do I really need this item?
If it is an essential need, then before borrowing, speak to all of your creditors to see what they can do to help you – they have a duty to listen and are required to work with individuals to reach an amicable solution.
If the household debt is completely out of control, with creditors not willing to work with you, you may consider applying for a Debt Relief Order, setting up an Individual Voluntary Arrangement or petitioning for your own bankruptcy. These steps may sound extreme and are not for everyone. There are pros and cons attached to these 3 options and those need to be looked at carefully before you take any action.
For further information contact firstname.lastname@example.org or call 01305 216221