Dealing with debt can be confusing and scary. There are hundreds of reasons why people put off getting debt advice – some fear they’ll be judged, others bury their head in the sand and hope things will improve, and many simply aren’t aware that free, impartial debt advice is available.
StepChange Debt Charity, who runs the annual Debt Awareness Week (DAW) campaign, estimates that the average person waits 12 months between realising they’re in financial trouble and getting debt advice for the first time, during which their situation can get even worse.
This Debt Awareness Week (22-28 March) marks a year since lockdown measures were first introduced and we are encouraging our tenants and customers to take their first steps out of debt by starting a conversation with us.
Here Steven Higham, our Money Advice Officer, shares his thoughts on how he can help tenants and customers by giving them impartial advice on how to face debt head on.
He said: “It’s impossible to ignore the fact that the past year has been difficult for many of us. No one could have anticipated how long the coronavirus situation would last for, or how hard the financial impact would hit.
“The pandemic has affected us all but undoubtedly there will be those who have been hit harder than others due to job losses or reduced hours, amongst other things. This often results in mounting financial pressure and increased debt.
“While stats suggest that personal debt is on the increase this is still more often than not a subject that is off limits, with many people feeling embarrassed or even ashamed to bring this up and tending to ‘bury their heads in the sand’ instead, which of course is the very opposite of what anyone should do when they find themselves in debt.
“Debt Awareness Week can hopefully help to remove the stigma surrounding this subject, and here at WHA we can offer guidance and advice to overcome the barriers to debt free living.
“There are many tools and options available to start resolving a debt problem. Two government initiatives which can help are Debt Relief Orders and the Debt Respite Scheme.”
Debt Relief Orders
If you owe less than £20,000, do not have much spare income and do not own your home a Debt Relief Order (DRO) may be a way of dealing with your debts if you can’t afford to pay them. It means you don’t have to pay certain kinds of debt for a specified period (usually 12 months). At the end of the DRO period, the debts included in it will be written off (‘discharged’) and you won’t have to pay them.
The Debt Respite Scheme (Breathing Space) – this does not come into force until May 4, 2021
The Debt Respite Scheme will give someone in problem debt the right to legal protections from their creditors.
There are two types of breathing space: a standard breathing space and a mental health crisis breathing space.
A standard breathing space is available to anyone with problem debt. It gives them legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts.
A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts).
If you want support with tackling a debt problem, or you are worried about the impact of coronavirus on your finances, help and support is available. Email us at email@example.com to arrange a call with Steven who can advise on suitable options and signpost you to an organisation that can help.