0Paying your rent

Firstly, check whether you are entitled to housing benefit (even if you are in work you may still qualify). If you are already receiving housing benefit but it is not enough to cover your rent, you can apply to your local council for an extra discretionary housing payment. You don’t have an automatic entitlement to this but your local authority will decide if you qualify for it. Alternatively, try speaking to your landlord to see if you can come to an agreement for you to pay any arrears in instalments. Use your financial statement to show what regular payments you can afford. If your landlord won’t negotiate, if you’re at risk of being evicted from your home, or if you’re unable to pay any arrears on top of your rent, seek guidance from an adviser.

Paying your mortgage

If you receive income-based employment and support allowance, jobseekers’ allowance, income support or pension credit, you may also be entitled to help with paying your mortgage interest. Contact Jobcentre Plus to find out if you’re entitled to it and for advice on how to make a claim.

Check your mortgage agreement to see if there’s any scope for you taking a payment break. This might give you some time and space to catch up with other payments, but make sure you find out all the potential consequences of how taking a break may affect your future payments.

Alternatively, you might be able to arrange paying arrears in instalments. Speak to your mortgage lender about your reasons for falling behind with repayments, particularly if your situation has now improved. Provide them with a copy of your financial statement which will show how much you can afford to pay on top of your normal monthly payments.

If you would like more information and guidance on mortgage rescue schemes, contact Citizens Advice.

Eviction

Before you can be evicted from a property, your landlord or mortgage lender must first get a court order, except in some circumstances where your landlord lives in the same property as you. If you’re struggling to pay your rent or mortgage payments, seek advice from a debt or housing specialist as soon as possible, especially if you’ve received any letters threatening you with eviction. There are a number of organisations who can give you advice, including Shelter, Citizen’s Advice and the HM courts service. If you have been issued with an eviction notice, it will state the date that you have to leave the property by. You may be able to request that the court suspends the eviction, depending on factors like paying arrears in instalments. If you’re unable to get advice before the court hearing, contact the court and ask if an adviser will be available on the day and, if so, take any relevant paperwork with you, like your Financial Statement, and arrive with plenty of time to talk to the adviser beforehand.

If you are thinking of voluntarily leaving your home because you’re in arrears with rent or mortgage payments, make sure you seek advice before you make any decisions. Voluntarily leaving your home might mean you’re refused alternative housing from your local authority.

Gas / Electricity

If you fail to pay the bills for your gas and electricity, they may be cut off. Try contacting your supplier to negotiate paying the arrears in instalments or, if negotiation isn’t possible, contact an energy advice service for guidance on how to handle the situation.

There are a number of ways in which you can potentially deal with arrears, such as:

• Install a prepayment meter. This requires you to pay for your gas/electricity before you use it, by topping up your meter credit. Bear in mind that if you cannot afford to top up your meter, you won’t have any gas/electricity. Additionally, be wary of some companies charging more per unit of fuel, making this option potentially more expensive.
• Set up a voluntary payment plan. This will allow you to clear your arrears by paying an extra amount on top of your weekly or monthly bill.
• Arrange direct deductions from you benefits to pay off arrears. Often known as ‘Fuel Direct’, these deductions can be made from income support, pension credit, income-based jobseekers allowance or income-related employment and support allowance. The deduction will also cover your current gas/electricity use.
• Apply for a charitable grant. Often gas/electricity providers have charitable funds to help people who have fallen into arrears with their bill payments.

Council Tax

If you are the only adult in your home required to pay council tax, make sure you’re receiving the 25% single adult discount. Additionally, if you’re on a low income you may qualify for council tax reduction, even if you are currently in work or you own your home.

Bear in mind that local councils are granted considerable powers to recover council tax arrears, so it’s advisable that you contact them as soon as you start struggling to pay your bill. Penalties can include money being taken directly from your wages or benefits, bailiffs confiscating property or in some cases even imprisonment. Instead seek advice from an adviser and see if you can arrange with the council to pay the arrears in instalments.

Other bills

Whether debts are high or low priority, they will need to be dealt with eventually. Make sure you read all letters sent to you from creditors, avoid making promises you can’t keep with regards to paying debts and seek advice from a professional adviser as soon as possible.

Below is some information on lower priority debts and the potential penalty for non-payment, but remember that the sooner you address the problem, the more likely you’ll be to avoid serious action.

Low priority debts and penalties for non-payment:

Credit cardsStore cards Unsecured loans	Issue of a default noticeAction in the county court   Registration of the above on your credit history, which might affect any chance of getting credit in the future.
Water	Action in the county court NB Your water cannot be cut off but you will be obliged to pay off any arrears.
Hire purchase	Repossession and resale of the itemAction in the county court   NB If you want to keep the item you owe debt on, you may consider these payments high-priority.

 

Action in the County Court

Creditors may opt to take action against you in the County Court to recover any debts owed to them. Ideally, seek advice as soon as you feel in danger of falling behind with payments as this will improve your chances of being able to negotiate an agreement with the creditor to repay arrears in instalments. If an issue goes to the County Court, the creditor may be entitled to enforcement actions such as bailiffs, or may even try to secure large debts against your property if you own it or have a mortgage, although for this they will have to acquire an additional ‘charging order’ from the court.

If you have been issued a county court judgement for a debt, you may be able to request for the court order to be changed, which will allow you to pay the arrears in instalments you can afford.