“The best way to tackle a problem, is before it becomes a problem”
That advice sounds good in theory, but when it comes to financial matters it can be very difficult to face up to potential money problems. If you are worried you may be facing financial difficulties, or are already doing so, we’ve put together some useful information.
Speak to your lender(s) and the organisations you owe money to.
Firstly you’ll need to have a clear picture of your credit commitments, so it’s worth writing down what is owed and to whom.
This may include companies such as your mortgage lender, credit card providers, Hire Purchase (HP) agreements, Personal Contract Purchase (PCP) agreements, utility providers, loans, mail order / store accounts and so on.
Next, identify all companies you think you might struggle to repay, or where you are already in arrears (behind on payments). These are the ones you should speak to urgently. Make sure you explain your financial situation and ask what options might be available to you.
Consider the options available to you.
Your credit providers may be able to offer a number of options to help you through a period of financial difficulty.
For example, at Suffolk Building Society for our own mortgage borrowers who may struggle to meet their repayments we may be able to offer one or more of the following options:
- Change the way payments are made, or the date they are made during the month.
- Allow borrowers to pay back their mortgage over a longer period of time (which would reduce the monthly payments, but increase the overall cost).
- Allow borrowers to pay reduced payments or just the interest payments for a period of time (which would reduce the monthly payments, but increase the overall cost).
You should always carefully consider any arrangement you enter into with your credit provider.
Some companies (whether you are an existing customer or not) may offer you new loans or even invite you to sell your property to them and then lease it back as a way of resolving your short-term financial difficulty. Please be careful, as such actions may not be in your long-term interests. We would suggest you seek independent legal advice before entering into any arrangement of this type.
Be aware of the consequences of late or missed payments.
If you are in a credit agreement and fail to make a payment on time, or at all, it is likely this will be registered on your credit file. This may then affect your chances of getting credit in the future.
Also referred to as a credit score or a credit report, this is a tool to show how reliable you are at managing and repaying your credit commitments. The better your credit history, the more likely you are to be accepted for new credit – such as remortgaging to a new provider, or taking out a new credit card.
If you are in arrears with a credit provider (behind on payments) this may lead to a default or a County Court Judgment (CCJ), both of which have a more serious impact on your credit file.
For more information about late payments and your credit file click here to read a guide from Experian.
Access free, impartial advice.
There are a number of resources available, including:
- Citizen’s Advice: for free independent advice in your area, find your local Citizens Advice.
- National Debtline: offers a free, confidential and independent phone service. Website also contains fact sheets and a self-help pack. Freephone: 0808 808 4000.
- Step Change Debt Charity: provides a free and independent service on the phone and online. Offers a structured programme on how to manage your money through a personalised ‘Debt Remedy’ booklet. Freephone: 0800 138 1111.Change the way payments are made, or the date they are made during the month.
For concerns about not being able to pay your mortgage the Building Societies Association and National Debtline have created a guide with practical advice – click here to download.
Depending on your individual circumstances, you may also want to talk to a professional adviser, such as a debt counsellor or solicitor.
Information for Suffolk Building Society mortgage borrowers.
If you are a Suffolk Building Society mortgage borrower and are worried about meeting your mortgage repayments we have put together some useful information – click here to read our guide. It’s important you contact us as soon as possible, to give us the best opportunity to help, so call us on 0330 123 0773 or email [email protected].