Government-Help-With-Debt-Consumer-Debt-Help

Government Help With Debt

Maybe you’re struggling with debt at the moment, or you want help to make a completely fresh start with your finances. There are options available to you, such as government support schemes, if you’d like help. Depending on your situation, you may be eligible to reduce your monthly payments, to freeze interest or to get your debts written off. So do you qualify for government help with debt? Here’s how to find out.

Table of contents:

    Quick Eligibility Questions

    Of course, there are many different situations and circumstances regarding debt. You may find yourself unable to pay debt for the first time in your life due to an emergency or life changing situation. Or your debt has been building up without you realising and now it’s becoming unmanageable.

    Here are a few quick questions to see if you could be eligible for help:

    1. Are you paying out more on your debts than you can afford to pay back?
    2. Do you struggle at the end of the month once all the bills are paid?
    3. Are you paying more outgoings than you have coming in?
    4. Do you have debts on your loans with high amounts of interest, but you’re not seeing your debt balance go down?
    5. Are you in a cycle of borrowing?
    6. Have you had threats of bailiffs or penalties from creditors?
    7. Do you currently have a county court judgement?
    8. Is there a temptation to take out more credit to clear other debts?

    If you answer yes to these questions, then you do qualify for consumer debt help. Read on to learn more about what help is available to you.

    Where To Get Free Help With Debt

    The first thing to do is to get free debt advice which can help you. There are three main free options to choose from.

    MoneyHelper

    This is an impartial service set up by the Government, formally known as The Money Advice Service. They offer free advice on paying bills, dealing with courts and fines, getting debt help and paying off debt. If you would like to speak to a debt adviser on the phone or face to face, they also provide an option to find your nearest adviser.

    The Insolvency Service

    The Insolvency Service is a Government agency that provides services to those affected by financial distress or failure. There is free advice and guidance on dealing with debt, paying off your debts, getting a debt relief order and a guide to bankruptcy.

    Step Change

    StepChange is a debt charity offering free confidential advice and money management. You can talk to them about debt management plans, individual voluntary arrangements, debt relief orders and bankruptcy along with many other aspects of debt support.

    What Is Government Help With Debt

    If you’re in debt and want to reduce it, there’s the temptation to apply for adverts claiming to offer support. Some of these adverts may even use the words ‘government debt help scheme’ or ‘government debt solution’. However, don’t be misled. This doesn’t necessarily mean that the government authorises these companies.

    In order to make sure you are getting good advice about government support, contact a trustworthy organisation, such as those mentioned earlier in this article. Remember, you don’t have to pay for debt advice in the first place, you can get this for free.

    Official Government Help With Debt Schemes

    With regards to an official government debt scheme, there is not one overall scheme to apply for. However, there are a range of solutions from the government to choose from. These include;

    Debt Relief Order

    A debt relief order is an arrangement which typically lasts for 12 months. Certain debts are included in a debt relief order, but not all categories of debt. If you qualify for a DRO and your financial situation doesn’t change during the following year, then all the debts in the DRO are written off.

    IVA

    An Individual Voluntary Arrangement, or IVA is a type of insolvency. You can use one to agree to make payments on your debts, usually over a period of 5 to 6 years. At the end of this arrangement, any unsecured debts left over are written off.

    Debt Arrangement Scheme

    A debt arrangement scheme allows you to make affordable monthly payments. It’s similar to a debt management plan but this option is legally binding.

    Bankruptcy

    Bankruptcy is another type of insolvency that writes off your debt. However, some of your income or assets may be taken away to pay off the debt, so your home, business, car or other assets can be at risk.

    Help With Debt: The Breathing Space Scheme

    The breathing space scheme is available in England and Wales. If you qualify for the scheme, you can get up to 60 days respite from interest, fees and court action to give you breathing space to deal with your debts.

    Officially called the ‘Debt Respite Scheme’ the aim behind the government initiative is to help relieve the pressure and stress caused by debt. The scheme began in 2021 to give respite during the Coronavirus pandemic.

    If you’d like to apply for breathing space, you need to know the following;

    1. If you have joint debts, you must tell your partner and have their consent
    2. Some creditors may restrict access to further credit while you’re on the scheme
    3. You must explain about all your debts.

    Moreover, it’s worth knowing that breathing space is not a payment holiday. You’ll have to carry on paying your debts during this time. However, it does prevent action being taken against you if you’re unable to pay your debts. You can use the ‘breathing space’ of 60 days to get further advice and seek help in reducing your debts.

    Conclusion : Government Help With Debt

    Perhaps you are struggling with debt and you don’t know where to turn. Don’t ever feel that you have to cope with it alone. The first place to start is to get some free advice. You can find out more about the government initiatives available to get you out of debt and see which of these options could work well for you.

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