We have received numerous enquiries from individuals who are worried about managing their finances during the Coronavirus pandemic. We have set out some tips and advice to hopefully assist you during this unsettling time.
Everyone, both individuals and businesses, will be affected in some way by the crisis, but it is useful to know that there are things you can do if you find yourself struggling to pay your usual outgoings such as your rent, mortgage or energy bills because of Coronavirus.
Do not ignore your bills.
They are not going to go away. Speak to the organisation you owe money to; they may be able to help by reducing your regular payment amount or by allowing you to take a break from payments for a short while.
It is also worth speaking to your bank or building society; most have dedicated helplines for those struggling with debt and they may be able to help create a debt solution or allow you to delay loan or credit card repayments.
What benefits are available?
If you have been affected by coronavirus, you may be able to claim benefits or apply for an increase in your current benefits if;
- you have been diagnosed with coronavirus, or you are following guidance to stay at home in isolation
- you have lost your job
- you are self-employed and are unable to work due to the Government restrictions in place
- you are unable to work because your workplace has closed
For information about the benefits that may be available to you, visit https://www.gov.uk/coronavirus
Some local authorities may be able to provide things like help with your council tax bill, using money from a hardship fund set up by the Government as a direct response to the Covid-19 outbreak. Contact details for your local authority can be found online by searching the name of your local authority in a search engine. For ease, we have included links to support pages from both South Lakeland District Council and Barrow Borough Council below:-
Barrow Borough Council – https://www.barrowbc.gov.uk/promotion-pages/coronavirus/
If you cannot pay your rent
You must explain the situation to your landlord straight away. If you have been a good tenant paying your rent on time up to now it is very unlikely that your landlord will start eviction proceedings against you in the current circumstances. The Government have announced that they plan to make temporary changes to the law with regard to eviction cases so that no one will lose their homes while the emergency continues. In any case, your landlord can always agree to give you more time to pay, or agree to reduce your rent or to let you catch up your arrears when things return to normal. If you are receiving some wages, even if not as much as usual, you must prioritise paying your rent or paying what you can afford. If you have fallen behind with your rent you should contact your landlord to explain and try to deal with any rent arrears as quickly as possible.
If you reach an agreement, put it in writing, preferably signed by you and the landlord.
If your landlord does not agree to be flexible with your rent payments, you must still pay as much as you can afford and keep a record of what you have discussed.
You should also contact Citizens Advice https://www.citizensadvice.org.uk/ – they could help you explain things to your landlord or may be able to speak to your landlord for you.
If your income has reduced because you are unable to work due to the pandemic, you may be entitled to benefits to help with housing cost, such as universal credit. Again, speaking to Citizens Advice or reading the information available on the https://www.gov.uk/ website will point you in the right direction.
If you are worried about being evicted from your home
The Government is making temporary changes to the law surrounding eviction because of the coronavirus outbreak. This may mean that your landlord may have to give you extra notice before they can evict you, but it depends on the type of tenancy you have. Read our article on the changes for further guidance https://www.progressionsolicitors.com/how-do-i-pay-my-rent-during-lockdown/
Note that if you are renting a room in your landlord’s home, your landlord can ask you to leave even if you are up to date with your rent; they will not have to issue court proceedings to evict you.
If your landlord has started possession proceedings to evict you
The Courts have been instructed by the Government to postpone all eviction proceedings for 3 months from 27 March 2020. If your landlord has already made steps to apply to the court to evict you, there will be a delay in normal proceedings and you will not have to leave your home yet. However, this does not mean that your landlord cannot evict you at a later date and you should maintain rent payments or try to clear your rental arrears during this hiatus if you possibly can. Once the Courts are permitted to start progressing cases again, it may grant possession of the property to your Landlord.
The courts are unlikely to be lenient with tenants who were already in arrears before the emergency or those who have not taken steps to pay what they can.
If you normally have to leave the house to pay your rent
Either because you pay in cash or you visit the bank to arrange the payment, we suggest you contact your landlord to discuss your circumstances. You can ask your landlord if they will accept payment of the rent using a different method, such as a debit card payment over the phone or an online bank transfer. You can also contact your bank for advice about different ways to pay.
If you cannot make your mortgage repayments
The Government has recently announced that if you cannot afford to pay your mortgage as a result of the imposed restrictions or the effects of the coronavirus crisis, you may be entitled to a 3 month payment holiday. You will still have to make these payments at a later date and it is important to note that if you are already in arrears with your mortgage payments, it is unlikely you will be entitled to a payment holiday.
Your first step is to contact your mortgage provider as soon as possible. This is not a guaranteed payment holiday and it will depend on your individual personal circumstances and what your mortgage provider’s rules are.
If you cannot pay your gas, electricity or water bills
Speak to your energy supplier as soon as possible. You may be able to set up a payment plan with them to help spread the cost of your bills. They may be able to defer payments or take a reduced monthly amount until you are able to work again. You will find their contact details on the provider’s website or on your most recent utility bill.
If you have a pre-payment meter
Again, speak to your supplier as soon as possible. There are multiple reasons that you may be unable to top up your meter during lockdown, such as being in isolation which prevents you from getting to the shop, or your ability to pay due to reduced income. It is likely that your energy supplier will try to help you find ways to keep your energy supply connected.
You will find their contact details on the provider’s website or on your most recent utility bill.
Our best advice is:-
- Do not to ignore the situation as it is only likely to get worse. In most circumstances, early intervention/action works best and you will find that the person you owe money to is more flexible and will be pleased that you have contacted them to make arrangements to pay or to explain your current circumstances.
- Speak to someone about it. Whether that be a friend or relative who can assist you in getting support, or your landlord, utility provider, bank or otherwise. Keeping in touch means that they can understand your situation.
- Keep a detailed note of all conversations and correspondence that you have with the person because you may need this information at a later date. If Court proceedings are issued against you for recovery of the debt at a later date, it will be helpful to have your records available and the court may take into account attempts that you have made to rectify or improve your situation.
- Draw up a budget plan listing all of your debts and setting out your income and outgoings. If you are asking for help from the person you owe money to, it is likely they will want to see this information to assist them in calculating what you can afford to pay.
When entering into a payment arrangement with anyone, it is important that you are realistic about how much you can afford to pay. If you struggle to pay under your arrangement, your creditor might have no option but to commence proceedings against you for recovery.
The situation is constantly changing and the Government may bring in further guidance in due course. However, this post represents our best interpretation of HM Government’s guidance, where applicable, at the time of our writing. Both the content of the post and any guidance it is based upon will be subject to change.
Progression remains open for business with our staff working from home and able to provide advice via telephone or video calls.