Where to get help with debt | Tenant news

There are lots of reasons why someone may get into debt or fall behind on bills, including job loss, increases in household bills, and unexpected expenses.

In the UK, one in nine (5.5 million or 11%) had fallen behind or missed paying one or more domestic bills or credit commitments in the previous six months from January 2024, according to Financial Conduct Authority’s latest Financial Lives cost of living survey. The survey said that utility bills were the most commonly missed bills over that period.

With that in mind, we’ve gathered together information on where you can get help and support if you have lots of debts and are struggling to pay them.

Always seek professional help

There are different ways to resolve debt issues, but most debt solutions come with some risks. This is why it’s important to speak to a trained and experienced debt adviser about your situation so they can help you see what the best decision might be for you.

The Government-backed website MoneyHelper provides information and guidance on debt, including information on debt consolidation loans where you put all the money you owe into one loan. MoneyHelper also offers debt advice locator where you can find a free debt advisor in your area, online or over the telephone. Check it out .

Citizens Advice , which is also Government funded, provides a free debt advice via a trained adviser online.They’ll try help you solve your problem, but they might also need to send you to your local Citizens Advice or a specialist organisation.

You can also contact them through their free national phone service (0800 144 8848), which connects you to your local Citizens Advice centre.

StepChange debt charity offers free, completely confidential impartial advice. You’ll need to tell them about your finances, and they’ll work out your budget and advise you. You will get a ‘personal action’ plan with recommendations on how to deal with your debts and information on the ways you may be able to increase your income.

What’s a Debt Relief Order?

If you can’t afford to pay your debts, you might be able to apply for a Debt Relief Order (DRO), which is a way to get your debts written off if you owe less than £50,000, but you must meet an eligibility criterion. Gov.uk has more information.

In April 2024, the Government removed the £90 application fee for DROs, which means peopleare not being charged just to be able to take part in the scheme.

Buy now, pay later providers

Klarna, Laybuy and Clearpay are examples of buy now, pay later (BNPL) providers, which are found at the checkouts of thousands of online retail stores. They allow you to buy items without having to pay upfront. They usually offer two options: pay later or pay instalments later.

BNPL providers, such as Klarna and Clearpay don’t charge interest for their service, so it’s seen as a cheap and quick credit option.  However, BNPLs will charge additional fees if you make a late repayment and missed payments and unpaid debts are sent to a separate debt collection. MoneySavingExpert has more details on how they work.

The main criticism of BNPLs is that they encourage overspending. Using them can also lead to a bad credit rating, which can affect your ability to get better deals on things like insurance premiums and make it harder to get credit approval. Some say that they are not dissimilar to payday lending.