Banks expecting sharp rise in number of missed repayments – what to do if you can’t pay
UK banks have reported a rise in missed mortgage, credit card and loan repayments in the final three months of 2023, and they’re bracing themselves for worse to come.
According to a Bank of England survey, lenders are expecting the numbers to increase further in the first quarter of 2024, as households continue to feel the squeeze.
What to do if you can’t pay your debt?
If you’re struggling to keep up with your debt repayments, there are a number of things you need to bear in mind as you prepare to tackle the issue.
Prioritise your debts
Some debts are more important than others and should be paid first. These are known as priority debts because they could potentially have the most serious consequences if you fail to pay. Priority debts include:
- loans secured against your home
- energy arrears
- council tax
- child maintenance
- court fines
Non-priority debts include:
- credit card debts
- unsecured loans
- money borrowed from friends and family
- buy now pay later
- catalogue debts
Non-priority debts should only be paid once your priority debts have been taken care of. Let non-priority lenders know if you’re struggling to pay and offer to make a token payment of £1 if you can afford to.
If you’re struggling to pay priority debts, you should speak to your creditor (bank, energy company, landlord etc.) You may be able to agree a payment plan for any arrears and they may have other forms of support available to get you through a rough patch. But they can’t help you if you don’t speak to them.
Make a budget
If money is tight, it can really help to go through your finances with a fine-tooth comb. Writing down all the money you have coming in and what you’re spending it on can make it easier to spot where you could make cutbacks. We have a free budgeting tool you can use or we’ll be happy to go through it together over the phone. Call us on 0161 518 8282. We’re here 8am – 8pm during the week and from 10am – 4pm at the weekend.
Get debt advice
If getting back on track isn’t simply going to require a tightening of your belt for a couple of months, it’s probably time to get debt advice. Our help is available online and over the phone. We’ll go through your finances, come up with a budget you can stick to and look into whether a debt solution might help your situation. All of our advice and budgeting help is free and impartial. Some debt solutions are also free and some have a fee. We’ll give you all the facts you need to make an informed decision about what’s best for you. Don’t struggle on alone, it’s our job to help.
A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.
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