What to do if you’re struggling to pay your bills

COVID-19: What to do if
you’re struggling to pay your bills

There are things you can do if you’re struggling to pay your bills because of COVID-19. This includes things like your:

  • council tax
  • mortgage
  • energy bills
  • court orders
  • tax bill

It is important you do not ignore your bills. Speak to the organisation you owe money to, as they might be able to help by letting you pay smaller amounts or take a break.

It is also worth telling your Bank or Building Society you are struggling because of COVID-19.

Some bills can cause you more problems if you do not pay them. It is worth checking which bills you should pay first.  These are called Priority Debts as they and include:

  • Rent arrears
  • Mortgage arrears
  • Secured loan arrears
  • Council Tax arrears
  • Gas or Electricity bills
  • Phone or Internet bills
  • TV Licence payments
  • Court Fines
  • Overpaid Tax Credits
  • Payments for goods bought on Hire Purchase or Conditional Sale
  • Unpaid Income Tax, National Insurance or VAT
  • Unpaid Child Maintenance or Child Support

If you normally have to leave the house to pay your bills, you might have difficulty paying if for example you usually pay in cash or you post cheques. You should ask if you can pay your bills in a different way, such as a card payment over the phone or an online transfer. You can also contact your bank for advice about different ways to pay.

If you have less money because of COVID-19 you might be able to claim benefits or receive more money on your current benefits if:

  • you have COVID-19, or you are following guidance to stay at home
  • you have lost your job
  • you are Self-Employed and cannot receive work
  • you cannot work because your workplace has closed

A Specialist Benefits Caseworker at Paperweight can help you check which benefits you might receive if you’re affected by COVID-19.

You can contact your local Council to see if they can give you any extra help from a Hardship Fund. You can find your local Council at: https://www.gov.uk/find-local-council

If you receive a Council Tax Reduction and are working age, your local Council should give you an extra £150 off your bill for 2020-2021. You do not need to do anything and your local Council will send you a new bill.

If your Council Tax bill is already less than £150, you will not have to pay anything for the coming tax year, 2020-2021.

If you do not already receive a Council Tax Reduction, you might qualify if your income has dropped, or if you recently started claiming benefits. You should check your local Council’s rules to see if you qualify for a Council Tax Reduction.  Even if you do not think you qualify, it is still worth asking your local Council.

If you cannot pay your Mortgage your Lender might agree to pause your Mortgage payments. This is called a ‘Mortgage Payment Holiday’.

You can ask for a payment holiday for somewhere you live, or somewhere you bought to let.

If you have not had a payment holiday, you have until 31 October 2020 to apply. If you are making repayments now but get into financial difficulty later, you will be able to request a payment holiday until 31 October 2020.

If your payment holiday is ending and you are still struggling, you can ask for another three months. Lenders should continue to support you if you already had a payment holiday and need further help.

Lenders are expected to contact you if you have a current payment holiday to find out what you can repay and, for if you remain in temporary financial difficulty, offer further support. As part of this, Lenders should consider a further three-month payment holiday.

If you can make full or partial payments, you should do so. At the end of a payment holiday, Lenders should find out if you can resume payments, or part payments.

If so, your Lender should contact you to agree a plan on how the missed payments will be repaid, which could include spreading the cost of payments over the remaining mortgage term, or extending the mortgage term.

The current ban on repossessions of homes will continue until 31 October 2020.

You can find out more about payment holidays on the Financial Conduct Authority’s website https://www.fca.org.uk/consumers/mortgages-coronavirus-consumers

If you’re behind with your Mortgage payments, your Lender should not try to repossess your home. They should pause any action they are already taking until at least 31 October 2020. Courts have also paused all possession cases.

If you are concerned about Mortgage payments and would like to speak to a Caseworker at Paperweight, please call 020 8455 4996 or e-mail info@paperweight.org.uk

If you are struggling to pay your energy bills, you should speak to your energy supplier as soon as you can. You might be able to set up a payment plan to help spread the cost of your bills.

If you have a prepayment energy meter, your supplier will try to help you find ways to keep your energy supply connected if you cannot top up your meter because of COVID-19.  Tell your supplier as soon as possible if you cannot top up. You will find their contact details on their website or on your bill.

If you cannot pay your mobile, phone, internet or TV bill, the Government have announced you should receive extra help if you are a customer of:

Virgin Media

You should contact your supplier and ask what they can do to help. For example, they might agree to help you by:

  • reducing your bill
  • giving you more time to pay
  • increasing your data or download limit
  • moving you to a contract that better suits your needs

If you are a customer of a different provider, you should still ask if they can help. If they refuse, you might be able to switch to a different provider.

If you can’t pay your water bill, it is best to speak to your water company as soon as you can.

You might be able to receive a payment holiday on your bill, or move to a cheaper tariff.

You can also read the information for customers on Water UK’s website: https://www.water.org.uk/covid-19-information-for-customers/

If you cannot pay a County Court Judgement or Court Order, you might be able to change the amount you have to pay.

For support to complete the necessary online forms, please call Paperweight on 020 8455 4996 or e-mail info@paperweight.org.uk

If you cannot pay your Tax Bill you should speak to HMRC straight away. You can call HMRC on their COVID-19 Helpline which is 0800 0159 55. Calls to this number are free and lines are open Monday to Friday from 8am to 4pm.

You can read more about what to do if you cannot pay your Tax Bill on time by looking at https://www.gov.uk/difficulties-paying-hmrc

If your Individual Voluntary Arrangement (IVA) includes Tax debt, you might be able to delay your payments.

HMRC have announced that because of COVID-19, they will not start any new Bankruptcy Petitions or make face-to-face visits.

If you are struggling with Credit Card bills because of COVID-19, your Credit Card Company will not stop your credit card.  You can ask them to reduce or pause your payments for 3 months.  This is known as a ‘payment deferral’. If you have a guarantor, the deferral also applies to them.

You will need to make up the payments you miss and you might be charged interest during the 3 months.  This means you will have to either:

  • pay more each month after the deferral
  • keep making payments for longer

After the payment deferral, your Credit Card provider should help you work out a plan to pay what you owe.

If you cannot repay a Loan, your Lender might agree to temporarily reduce or pause your payments.  This might be money you have borrowed from a Bank or a Loan company. It could also be a Payday Loan or money from a Pawnbroker.

If you can’t pay for something you bought on Finance, the Finance company might agree to reduce or pause your payments for 3 months. Buying something on Finance is sometimes known as ‘Rent to Own’ or ‘Hire Purchase’. You might have used Finance to buy things like:

  • a car
  • something for your home, like a washing machine or furniture

If you are struggling to pay your bills and need help, support and guidance on what to do, please call Paperweight on 020 8455 4996 or e-mail info@paperweight.org.uk