You may be very worried about how you will cope if your income drops a lot because of coronavirus.
This article looks at what you can do if you think your bills and debt repayments will be unmanageable.
Things are changing fast: every day more different sorts of help are being announced. This article has been updated on 2 April.
More help may later be available but if you think your income is going to fall, I am looking at the practical steps you can take now. The common theme is that if you are affected by coronavirus problems, then ask your lender or utility company for help.
Contents
Why your income might fall
You may be affected directly by the virus if you get sick and or have to self-isolate because someone in your household has some Coronavirus symptoms.
But many more people will be affected because of what the government, their employer or other people are doing:
- schools and daycare facilities are shutting so you may have to stay at home to look after the children;
- your hours could be cut or you may not be offered any work if you are on zero-hours contracts;
- the self-employed may find their work dries up.
Benefits that may help
The government has announced changes so it’s easier and quicker to claim sick pay and to get benefits.
The standard allowance in Universal Credit is being increased for a year. At the moment this is £317 a month, it will go up in April to £409 a month.
If you haven’t claimed any before, websites such as Turn2Us can show you what you might be able to claim and your local Citizens Advice can help. A few pointers:
- you may be able to get help with your housing costs through Universal Credit. The government is changing the way the Local Housing Allowance is set – this is a limit on the amount of help you can get with rent. It was frozen since 2012, leaving many people in London and other areas where rents have escalated getting much less help than they in need, but this is now being increased.
- you may be able to get extra money if you have children through Universal Credit;
- you may be able to get with your council tax bills from your local council;
- if you already get some benefits, tell them immediately your income drops;
- if you are pregnant or on maternity leave, see these FAQs: Covid-19 – rights and benefits during pregnancy and maternity leave.
Can’t make normal debt repayments – what not to do…
A lot of people in the UK are only just coping at the moment, with no emergency fund and often only making the minimum payments to their debts.
It won’t take much of a reduction in their household income to make their normal debt and bill payments become unmanageable.
So what should you do if your income drops and you can’t afford the repayments?
First three things that are generally a bad idea. I can’t say they are always wrong for everyone, but don’t rush into doing any of these before looking at what your other options are.
(1) don’t borrow more
For most people, the worst thing you can do is to use your credit card, a new loan or more of your overdraft to keep paying other debts.
The coronavirus situation could last months. If you borrow more, you may soon end up with debts you won’t be able to afford even when things get back to normal.
At the moment the problem may just be temporary and creditors will probably be sympathetic – see below. So don’t turn this into a long term crisis by letting your debts get out of control.
(2) don’t rush into insolvency
Things may look very bleak financially for the next few months. But what many people will need is a breathing space until things get back to normal. We don’t know how long that will be yet but there are steps that you can take now to improve your situation.
Missing a few payments to debts such as credit cards, catalogues and loans isn’t going to result in having to go to court or having bailiffs round. Especially if you explain your problem to your creditors.
It’s not a good idea to rush into one of the sorts of insolvency – a debt relief order, an IVA or bankruptcy – until you have tried to get a payment break.
If you think you might need one of these options because your finances were already in a mess before Coronavirus, then talk to a good debt adviser. In particular, unless you are 100% sure your job can never be affected, this would be a very bad time to start an IVA.
(3) don’t take money out of your pension
If you are over 55, you may think that taking money out of your pension pot is a good idea to tide you over. Think again!
This is what the regulators say:
regulators are urging savers to keep calm and not rush to make any decisions about their pension in response to the coronavirus (Covid-19) pandemic. The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA), supported by The Money and Pensions Service (MaPS), say fears over the impact of the pandemic on markets and personal finances may make savers more vulnerable to scams or making a decision that could damage their long-term interests.
My article Should you use your pension to pay off your debts? looks at this topic. It isn’t normally a good idea to raid your pension, and to do this for what may be a short-term Cornonavirus problem is not sensible. Look at what your other options are.
Priority debts
Debts and bills can be divided into “priority” and “non priority”, see What are priority debts?
A debt adviser can help you decide what to do if you have problems with any sorts of debts and bills, but it’s especially helpful for priority debts.
The normal aim is for you to pay as much as possible to the priority debts such as your rent and council tax even if that means paying little or nothing to non priority debts such as credit cards and loans.
Mortgages & Rent
Mortgage lenders have agreed to offer a three month mortgage holiday to homeowners. See Coronavirus – how will mortgage payment holidays work? for details.
Claiming Universal Credit may be able to get you some help with the cost of renting. The government has said that no-one will be evicted from private or social housing for the next three months. Landlords cannot start possession proceedings against you in court.
Other important bills
Council Tax – apply for Council Tax Support on your local council website. This is not automatically done if you apply for Universal Credit, you need to make both applications.
The government has provided extra help to local councils and has said that people getting Council Tax Support should get an extra £150 reduction in addition to the normal reduction your council gives someone on a low income or benefits.
Electric & gas bills – talk to your supplier and explain your income has dropped because of coronavirus and ask if you can pay it over a longer period. If you are having deductions through a prepayment meter for existing debts, ask if the deductions can be reduced or halted for the next few months.
Water bills – Water UK has announced that all the water suppliers in England and Wales are actively offering payment breaks for anyone in financial difficulties as a result of Covid-19.
Non-priority debts – ask for a payment break
Lenders are starting to get their help properly described on their website. Some examples:
- a lot of banks are saying customers with loans can ask for payment breaks;
- here is a non-bank lender who is providing a lot of help and explaining clearly what your choices are;
- Nationwide are saying people can have interest/charges on credit cards and overdrafts stopped;
- Tesco say you can delay your loan and credit card payments for the next two months by completing a simple form, and it won’t harm your credit record;
- Barclays isn’t charging overdraft fees between 27 March and 20 April. This is being done automatically being done for everyone, you don’t have to ask.
So look at your lender’s website first and see what that says.
If your lender’s website isn’t clear – ask for what you need
But if your lender’s webpage doesn’t seem to be offering you reduced payments or a payment break, don’t assume you can’t get help, you need to ask for it.
The Financial Conduct Authority’s rules say customers who can’t make payments should be treated “with forbearance and due consideration” by lenders and debt collectors.
“Forbearance” means they should consider taking lower payments, offering you a payment break and freezing interest.
So if you tell a creditor that you can’t make a payment this month because your income has fallen they should always listen to you. Even without coronavirus, lenders and debt collectors do listen to someone who explains they need a payment arrangement.
And now the creditors are all expecting to hear from a lot of customers with coronavirus problems. They know it’s not your fault. And they also know that there isn’t any point in pushing you to make a payment that you simply can’t afford.
The FCA is planning to bring in new rules saying lenders have to offer payment breaks. But don’t wait for those to be live because many lenders are already being helpful when you get in touch.
If you aren’t sure, talk to a debt adviser so you can find out all your options and the pros and cons.
Too anxious to phone?
If you don’t think you could make that sort of phone call, you could send the lender a short email or a message through their website instead. Something like:
My income is dropping because of coronavirus.
Then a very short explanation such as:
I am self-isolating because I/someone in my household has coronavirus symptoms.
I have to stay at home to care for my children.
My hours have been cut/I have been laid off.
I am self-employed and am getting a lot less/no work.
I am applying for benefits but I can’t make the normal payment to you this month and probably next month too. Can you please freeze interest and not add any charges. “
Will this affect your credit rating? Not if your lender agrees to the payment holiday!
Normally missing one or two monthly payments will harm your credit score but you should not get a default added.
Major mortgage lenders such as Lloyds (including Halifax and Bank of Scotland), RBS including NatWest) and Nationwide have said that if a customer takes a mortgage payment holiday it will not affect their credit file.
And on 31 March, Experian, Equifax and TransUnion decided that if your lender lets you have a payment holiday or make lower payments to a credit card, catalogue, car finance or other loan, this will not affect your credit score .
That is good news – one less thing to worry about.
When you already have a debt solution in place but now can’t afford it
Payment arrangements and Debt Management Plans (DMPs)
DMPs are informal, flexible arrangements, they can be changed.
If you are already in a debt management plan, talk to the company running it and ask to make lower payments or have a payment break. Again, they will be sympathetic.
Same applies if you have already made a payment arrangement with a lender/debt collector. Ask for it to be reduced, to zero if necessary.
IVAs
Your IVA firm and your creditors will not want your IVA to fail because of a temporary coronavirus problem. Talk to your IVA firm, see Coronavirus – worried you can’t pay your IVA?
IPA in bankruptcy
If you are bankrupt and paying an IPA, tell your OR’s office and the IPA will be reduced, to zero if necessary. This will not extend the length of time you have to pay an IPA for – that can’t be more than 3 years.
DAS & Protected Trust Deeds (Scotland)
See Can’t Pay Trust Deed or DAS? by a Scottish adviser. The Accountant in Bankruptcy has said that DAS arrangement will not be revoked (the legal term for failed) if you can’t pay because of Coronavirus.
Marl says
Dear Sara with the corv19 virus would amigo give a 2 month break from payments, as they don’t normally do this for guarantor loans ty for your time
Sara (Debt Camel) says
Has your income been affected by Coronavirus?
Aimee says
Hi my workplace is closed due to virus and my income has dropped I have a loan which is 150 a month what should I do
Sara (Debt Camel) says
I assume you can’t afford to pay this loan because of your income reduction.
What sort of loan is this? a normal unsecured loan, car finance, a guarantor loan etc? Do you also have credit card bills and an overdraft?
Karl Beattie says
Any update on what amigo said as I’m in a similar situation
Sara (Debt Camel) says
hi Karl, here is what I said to another reader about an Amigo loan: https://debtcamel.co.uk/coronavirus-can-you-pay-debts/comment-page-1/#comment-356720.
Deborah says
Dear Sarah
I am a self employed hairdresser with a small salon. I cannot work from home and my business has slowed I expect it will stop soon. I am firstly concerned about my mortgage(I am phoning this morning) but mainly my rent on my salon, I can just about make this quarter, but will struggle with June’s. If I am forced to close am I still liable to pay the existing 12 year rent contract. I am absolutely out of my mind.
Sara (Debt Camel) says
Hi Deborah,
if paying this quarter’s rent is going to be a stretch and leave you short for the essentials, I think you should talk to Business Debtline on 0800 197 6026 before you pay it.
It may be your landlord would accept lower payments for a while.
BD can also talk about your liability if your business closes permanently.
Village Idiot says
One thing to watch out for is today’s announcement that small businesses who are eligible for Small Business Rates Relief (and I bet you are, my partner is a salon owner too) are going to receive a £10,000 grant. Not a loan, a non repayable cash sum.
I’m waiting to see the small print so not getting hopeful yet, but look out for it. If I have understood it right the local authority where the salon is will make contact with everyone eligible, about it.
Good luck.
Marie says
My childminder called last night to say her husband had a temperature and as a family they have to be quarantined. I can’t work from home with my 2 year old! I will call up my credit card but what about my car finance? That’s my biggest expense after the rent.
Sara (Debt Camel) says
It is possible this may only last for 2 weeks, then the childminder would be back in action. Have you talked to your employer about options? They may let you take 2 weeks paid leave out of this year’s holiday.
Car finance is a “priority debt” because it is secured on your car. You can ask if you can miss a payment and increase future payments to make it up. My guess is the car finance company will not want to repossess a lot of cars this spring, so they may be more prepared to listen to a sensible suggestion than they would normally. It may help if you have an email from your childminder and one from your employer so you can show that this may only be temporary.
Don’t offer the credit card company too much – they are not your priority, your rent, food and the car are. If you aren’t sure what to say to them, talk to National Debtline on 0808 808 4000.
Didi says
My pay is just cut for 40%
What will i do with rent and bills and my living?😢
Sara (Debt Camel) says
What is your job?
Were you on a zero hours contract or did you have a regular salary before? What has your employer said to you?
Pixie says
Mine to I am on a min wage job contracted 25 hours I’m now on 14 a week due to being cut for a possible 5 months , you have to apply for universal credit and prey you can get £20 left for food a week out of it , seems so unfair doesn’t it ? Iv worked for over 22 years support a my 20 year old still and to be told in just a day your hours are now this , uni credit is about £74 per week very hard to live on , try and get a second job of 10/12 hours maybe ? And ask your employer if they will be flexible around you finding extra work and still keep ,to be fair as they had to cut you . Work two jobs , supermarkets and care for elderly are desperate at the moment with this. Corona . I’m praying the gov bring something into place for workers that have had this instant cut like us and may possibly be able to give a higher rate uni credit for this group until work goes back to normal or hopefully if it dose not collapse goes back to normal say a six month special pay rate .
Evie222 says
I live in London and I was notified today that my workplace will be closed until further notice. I have a very understanding landlord who has agreed to reduce my rent payments for the next 3 months. I was wondering if it was possible that my council could defer my payments for couple of months. Just very worried about the piling bills and how it’ll all did in the next coming weeks. Government not offering any help to people who privately rent is very worrying.
Sara (Debt Camel) says
It has just been announced in Parliament that the Housing Minister will make a statement about extra protection for people renting in the next few days. I hope that will help you and other enters with less understanding landlords.
Assuming your income has dropped, you should apply to your local council for Council Tax Support – unfortunately this is “localised” so different council help different amounts so I can’t say what you will get… but if you don’t get yours reduced to a very low amount, I suggest you ask your council what extra help is available for those affected by coronavirus as the government has given them extra money for this.
Evie222 says
Thank you for this information Sara. I will wait for the upcoming announcements and I will contact my council tomorrow.
Village Idiot says
Hi all,
The government has announced that there will be a 3 months mortgage payment holiday for those struggling. I’m wondering how that would go if you already have mortgage arrears? We are 2 months plus in arrears. I know no-one will know the answer, just asking people to take educated guesses, will they refuse to add to our arrears? In other words say we are ineligible through already being in debt? How will they report this to the credit reference agencies?
Being in 5 1/2 months arrears sounds scary to me. But my partner is self employed in an area likely to be laid to waste by coronavirus, so we may well be about to lose nearly half our income and in need of drastic remedies.
Thank you.
Sara (Debt Camel) says
At a guess lenders will be very slow to take action against you over the next 3 months.
But I think both of you should be talking to your credit cards and any loans asking for payment holidays.
Village Idiot says
Thanks as ever Sara.
Sara (Debt Camel) says
See new article https://debtcamel.co.uk/coronavirus-mortgage-payment-holiday/ for more about mortgage payment holidays.
Stacey says
Dear Sarah me and my husband and kids are in isolation for 14days and are struggling with paying my amigo loan this week as my husband doesn’t get paid for being off, what should I do?
Sara (Debt Camel) says
Who is your guarantor?
You mentioned Safetynet Credit – did you put in a complaint about them? Did you use any other payday lenders – this would be a good chance to make affordability complaints to them?
Stacey says
My guarantor is my best friend. Iv don’t a complaint against safety net credit still haven’t received an answer back as of yet
Sara (Debt Camel) says
You should think about whether the Amigo loan was actually “affordable” when you took it out. Amigo has given loans to a lot of people without checking they can really afford the repayments. if you can win a complaint about this, the interest is removed from the loan, your guarantor is released and you can make an affordable payment arrangement. See https://debtcamel.co.uk/how-to-complain-guarantor-loan/ whioch looks at the the definition of “affoprdable” and how to make this sort of complaint. It won’t solve your immediate problem but it could be a massive help in a few months if you win.
Once you have a complaint in, Amigo cannot take you to court while the complaint is going through.
Could your guarantor really afford the repayments?
Stuart Ferguson says
I have ask blue motor finnace for a 3 month break for my car payment i have lost my job as i worked in the tourest trade the lady on phone said no if i miss any payment my credit score will change pluss charged more interst on my payments
DO NOT DEAL WITH THIS TERRIBLE COMPANY THEY DO NOT CARE
Sara (Debt Camel) says
That is disappointing (I could think of a less polite word).
Did she say the car might be repossessed?
How far through the car finance are you?
Were the repayments affordable up until now?
Is your car essential?
Sam says
I have an amigo guarantor loan which i can usually afford but due to the coronavirus my hours have been more than halved. I am now only going to be doing 8 hours a week while my store is still open meaning i am going to struggle to be able to make the repayments.
Amigo don’t usually do a payment break. How likely are they to be understanding at this time?
Sara (Debt Camel) says
This is an unusual situation and I can’t really guess what Amigo will say. They should consider a request from you.
Would you be able to afford to increase the payments to Amigo when things return to normal to repay the arrears? Or would you want the loan extended by the missed months?
Is the loan actually affordable for you normally or have you been getting deeper into debt to try to repay it? What is your guarantor’s financial position?
Bradley bird says
My income has been affected as me and my family are self isolating. I also have amigo would they accept a payment break do you think ??
Sara (Debt Camel) says
I think Amigo should consider your situation if you ask for a payment break.
Would you be able to afford to increase the payments to Amigo when things return to normal to repay the arrears? Or would you want the loan extended by the missed months?
Is the loan actually affordable for you normally or have you been getting deeper into debt to try to repay it?
Sara (Debt Camel) says
I have given a longer answer here to someone with an Amigo loan: https://debtcamel.co.uk/coronavirus-can-you-pay-debts/comment-page-1/#comment-356720
claire says
my husbands in iva we pay evrey month due to corona virus kids of school and a friend will be looking after them for a charge as dosnt no our situation we will not have receipts so will our payment be reduced?
Sara (Debt Camel) says
so will our payment be reduced?
your IVA payment?
You need to talk to your IVA firm about this. I hope they will be sympathetic to all reasons why people may have problems – they can see you are both working and your children are off school – would they prefer you to stop work or pay someone for childcare?
Sam Smith says
We were originally told by our lender, Barclay’s, that they weren’t offering a mortgage holiday even after the government announcement. Then they updated their website to say they were, but when I called the number there is a recorded message saying they aren’t able to offer them right now and it could be several days before they have worked out the details. I got a message online saying I should keep checking their advice online ‘over the next few weeks’ for updates.
I feel really let down. We are both freelancers and our contracts have been cancelled or postponed. We’ve not earned much over the last two weeks and aren’t expecting to earn much over the next 4 weeks. We can’t speak to anyone and don’t know what to do.
Sara (Debt Camel) says
Sorry to hear that :(
But I wouldn’t be surprised if the same is happening with most mortgage lenders at the moment.
I am confident that this is just teething problems – the banks need to work out how the 3 month payment holiday will work in practice so they can describe it to you. They may also need some proof that you are affected by coronavirus – I hope they will set a low bar for this and take almost anything eg email from whoever your contracts were with cancelling them.
By this time next week I hope they will be geared up to talk to a very large number of their mortgage customers.
I hope you have applied for Universal Credit and Council Tax Support. And if you have other debts, thought about asking for payment arrangements for them too, see article above.
If you have a payment coming up in the next few days, you should consider stopping the Direct Debit if paying it will leave you too short to get through the rest of the month. That must feel very scary, but the government and the banks have been clear that people with mortgages WILL get help.
Briano says
Hi Sara, In light of the job losses, cut hours etc has there been any mention of the recent overdraft charge increases by the banks? They seem to be assisting with mortgage breaks and credit cards etc but I have not seen anything mentioned about this.
Thanks
Sara (Debt Camel) says
The FCA recently wrote a letter to all banks reminding them that:
We wish to underscore that our rules require you to take measures to help and support those customers who are worse off because of these changes. This is important for all customers and particularly those who are or may be vulnerable.
That was pre coronavirus.
You are right that the banks haven’t made much mention of this. BUT I think you should phone, say you have been badly hit by coronavirus and their new overdraft fees are too high for you to afford and ask them to halt any overdraft charges for the next few months.
Teacake says
I too are with amigo I’m struggling financially am worried they will ask my guarantor as she’s been laid off due to the coronavirus where do we stand I can’t afford the payments by myself
Sara (Debt Camel) says
were you struggling anyway, even before coronavirus?
Sara (Debt Camel) says
If the Amigo loan was causing you problems even before the coronavirus, it may have been “unaffordable”. In that case you can make an affordability complaint, see https://debtcamel.co.uk/how-to-complain-guarantor-loan/ for how to do this. This is worth doing as if you win the complaint (a) your guarnotor is released so you can make a payment arrangement without any worry about them and (b) interest is removed from your loan. These complaints are not quick, but if you think the loan is unaffordble, kick it off asap.
You can also say that you need a payment holiday because of coronavirus. Whether you are making an affordabilty complaint or not.
But Amigo may go after your guarantor…
If your guarantor cannot afford this now because of coronavirus, the guarantor should cancel the DD to Amigo and tell Amigo they can’t pay at the moment. They will get cross letters and texts from Amigo but their money is safe. In practice Amigo are unlikely to do anything like take her to court as she has no money! And her credit rating can’t be affected unless they did go to court as the loan doesn’t appear there. so this feels risky but in practice she should be fine.
If your guarantor could never have afforded the repayments then she too can send Amigo an affordability complaint. Send her a link to https://debtcamel.co.uk/amigo-complaints-by-guarantor/ – that has a slightly different complaint letter for a guarantor.
When someone has a complaint in with Amigo – or with the Financial Ombudsman if Amigo reject it – Amigo cannot take them to court. that applies to you, the borrower. And to your guarantor. So if both of you think you can make affordability complaints, then you can both cancel your DDs to Amigo. As I said you will get cross emails and texts but it will be months before your complaints are resolved and if you win them you will be in a much better position.
Amigo has not been checking properly that borrowers and guarantors can afford the loans. At the moment 90% of these complaints are being won at the financial ombudsman.
Michelle says
Hi just after some advice, I put my complaint in to Provident on the 6/2/20. Today I’ve finally received an email containing my loan history, agreements etc. Does this mean I’m any nearer to getting a reply off them.
Sara (Debt Camel) says
Hi Michelle – if you ask on the Provident Refund page (https://debtcamel.co.uk/refund-doorstep-loans/) you are more likely to get a helpful answer.
Kitty says
Hi
I have an amigo loan- for a very high amount-
My hours are being cut temporarily as the school have shut- my in laws would normally watch them through holidays etc but they are in their mid 70’s and and in self isolation. With this being said I will not being able to afford my payment this month! And it’s only going to get worse as we all know complete lock down is coming at some point!
They should never have let me have this loan to start with- it’s my third from them- they never checked my bank statements- wage slips nothing!
I suffer with severe anxiety so as you can imagine with everything going on etc it’s even worse – my guarantor has already been told do stay home as her workplace has closed for the time being so she won’t be able to afford the payments! Because of my anxiety I find it really hard do make phone calls to the point where I have really bad palpitations/panic attacks- I have emailed them 4 times now with no reply- even sent a complaint which. They said three days to get back to me – on day 4 now and nothing! No doubt as soon as that payment is marked as late they will be on it with the communications then! What can I do?? Please help?
Sara (Debt Camel) says
Was the loan “affordable” before these coronavirus problems? Or were you having to get borrow more or get behind with bills to make the payments already? Having to have 2 top-ups is often a sign that the original loan was unaffordable.
What about your guarantor – could she really have afforded the loan repayment before the coronavirus problems?
Kitty says
If I’m honest probably not!
Especially after the third loan-
– they offered me more- and as I needed the money I applied and has the money within 48hrs- again no confirmation of my earnings needed- I could have said I earned £7 grand a month and they wouldn’t have checked!
Now my guarantor is not working/earning she can’t- to be honest I doubt very much she would have before all of this-
They really don’t care about people- the interest that’s being added each month is enough to make you have a heart attack! I was stupid for taking it out but at the same time my credit rating is so bad I couldn’t get any other type of loan- with endless amount of missed payments in the past to other creditors surely this should have flagged up for them?
Sara (Debt Camel) says
So you already had a bad situation and coronavirus has just made it worse :(
Read https://debtcamel.co.uk/how-to-complain-guarantor-loan/ and think if you should put in an affordability complaint about all your loans. If you win that, interest is removed from the loan, your guarantor is released and you can make an affordable payment arrangement.
Can you also ask your guarantor to read the page for guarantors https://debtcamel.co.uk/amigo-complaints-by-guarantor/ and think if she can ask to be removed as the guarantor for the last loan because she could not afford the payments when you applied for the last loan. (That would take all the pressure off you if she could be removed – the loan just turns into a normal loan.)
If you simply can’t afford the loan repayment now, then you have to cancel the DD to Amigo so they can’t take the money and leave you too short to live on. This is bad for your credit record, but it’s probably pretty bad anyway, so in a crisis, your credit record doesn’t matter.
Amigo will then go after your guarantor … well probably, I am still hoping they will decide not to do that for a few months because of coronavirus, but at the moment you have assume they will.
But if your guarantor can cancel her DD to Amigo, she is safe, she will get cross texts and emails but they can’t take her money. Her credit record cannot be affected at the moment – if she looks at it she will see the Amigo loan is not even on there. And although Amigo may make threats, they can’t take you to court while you have a complaint in or her to court if she has a complaint in.
The best place for further comments about these affordability complaints is on the guarantor loan pages:
for the borrower: https://debtcamel.co.uk/how-to-complain-guarantor-loan/
for the lender: https://debtcamel.co.uk/amigo-complaints-by-guarantor/
Syed n says
Hi
I want to ask I have lost my job and I got an garrunton loan with trust 2 loans. Also this virus is making it hard Will the company put account on hold or not ?
Sara (Debt Camel) says
You already have an affordabilty complaint in with Trust 2 I think? have they responded? And what has happened to your Amigo complaint?
Syed n says
Hi,
Amgio has upheld by fourth loan and closed the account. I have raised first 3 loans with FOS which is taking really long and also this virus we got now will take longer.
Trust 2 loans declined my complaint is
and I have raised it FOS still such a long wait.
Will they accept and hold my payment for 3 months. ?
Sara (Debt Camel) says
who is your guarantor & could they have afforded the repayments when the loan was taken out? Can they now?
Kitty says
How long did the complaint take to process? As I now am going to put an affordability complaint in?
Martin says
I’m self-employed, and my income has dropped 90% over the past week. My clients have stopped all their projects, and I can’t see it picking up any time soon.
My Debt Relief Order literally ended yesterday, and I was looking forward to starting to build a new debt-free life. I planned on starting a new company next month. Now I’m in a position where I’m probably going to need to get in debt again to survive, but I doubt any lenders will give me credit after my DRO and the current economic uncertainty.
Apparently, all I’m able to claim is Universal Credit, which is now set at the same level as statutory sick pay for self-employed people. This doesn’t even begin to touch my most basic expenses. I applied several days ago, but I can’t get hold of them by phone or journal entries on their website. I’m guessing they’re a bit overrun at the minute.
I have no idea what I’m going to do. The government has effectively banned huge amount of economic activity (fair enough, for good reasons), but this means billions in economic activity is going to be permanently lost. Without something drastic like direct, unconditional payments into every adult’s bank account, the whole system is going to collapse.
The next few weeks and months are going to be an absolute nightmare. My thoughts go out to all of you, and I’m wishing you all the very best!
Nic says
You say write to your creditors by email, but I am constantly hitting a brick wall in this respect. I am self isolating because my wife has serious health issues, but MBNA and NewDay are refusing to deal with me by email. Their online messaging systems are useless because they cut you off after a few hundred characters. They all seem to be hiding behind GDPR “rules” and know full well they are making life unnecessarily difficult for people who are unable to use the telephone (my wife has had a stroke).
Sara (Debt Camel) says
It’s doubly tough when you have health problems and financial problems. Can your wife talk at all, eg get through security questions if you phone on her behalf?
What would she like to happen – a payment break with no interest being added?
Nic says
I (we) have several creditors and, in general, they have been very understanding. It’s just frustrating when I have to post financial statements and medical evidence (she also has cancer) because they are not accepting documents by email. Barclaycard have been great – they’ve provided a secure inbound email address for this – but others seem to want to make life as difficult as possible! No, my wife cannot speak enough to pass security questions (she has expressive aphasia), but we have third party authorities in place. It was just a mini-rant really. Because so much of my time is spent caring for my wife, I do not have time to make lengthy repetitive telephone calls to creditors – my “spare” time is usually late at night outside of call centre hours – so emails are the best method of contact for me.
Sara (Debt Camel) says
A well-deservied rant! I agree some firms are using GDPR concerns to make it harder for customers to use email, even though email is often the preferred method of communication for many people with mental health or physical health issues.
Martin says
NewDay are an absolute nightmare to deal with. Like you say, their online contact form only allows you to type a sentence or two. They’re hard to get through to on the phone as well. I had to resort to writing them letters. I never received a single reply, although the action I requested in the letter always seemed to be done after a week or two. Awful company. Wishing you the best, Nic!
Nic says
Cheers Martin. I think we all deserve a few months off from collection processes given the current circumstances. Don’t suppose that will happen though.
Ned says
Hi Sue,
I’m self employed and work from home but work has dried up due to coronavirus and the lockdown as nearly all my clients were local businesses.
I got in touch with Oodle car finance last week to inform them about my work and financial state but haven’t heard back from them, they usually reply with 72 hours.
It’s my 2nd car with Oodle and I pay £480 per month due to bad credit. First car was £233 per month. On both occasions, Oodle never asked me for proof of my earnings, same as the people above that mentioned about amigo loans.
The payment date is at the end of this month and I’m getting very anxious, so much so that my gums are flearing up. I haven’t defaulted on any payments with Oodle for both cars, been a customer with them for 16 months.
What’s your best advice?
Sara (Debt Camel) says
Can you phone them up? It’s no use me saying that I think they ought to give you a payment break, you need to know if they will.
Do you have other debts as well?
Ned says
Just realised they had a special notice on their website regarding covid-19. I’ve sent them a message again. Their phone lines were jam-packed every day that I called them.
I’m in the web design industry so I could afford the monthly repayment before the coronavirus hit the local businesses hard.
Thankfully, no other debts.
Lisa Tatton says
This loan is a guarantor loan and im in the same position
Sara (Debt Camel) says
Hi Lisa, see a reply i made to kitty about an amigo loan; https://debtcamel.co.uk/coronavirus-can-you-pay-debts/comment-page-1/#comment-356511
Anon says
I have a guarantor loan with bamboo, quite a recent loan.
I have asked for my account to be placed on hold. They have sent a payment holiday request to management who will decide whether to reject the request or not. I am in the travel industry as is my guarantor and we are basically both out of work for the foreseeable. My pay has been more than halved so clearly can’t afford to make the payments.
God knows what will happen if they reject my request.
Sara (Debt Camel) says
If you cannot afford the payment (and if your pay is halved it is hard to imagine that you could) then you should consider cancelling the DD to Bamboo so they cannot take the payment and leave you short of money for the essentials such as rent, food, heating, transport etc.
This will harm your credit score (unless they agree that it won’t – I think all lenders should agree this but that doesn’t really help you!) but that is better than being left short of money. And better than getting another high cost loan to let you make this months payments, or you will be in twice as much difficulty next month – you can’t borrow your way out of this situation.
Bamboo will then go after your guarantor, but as they can’t afford it either, the same applies to them – cancel the DD to Bamboo and protect their finances. In their case this probably won’t harm their credit score as the bamboo loan may not appear on there… I know Amigo loans don’t appear on the borrower’s credit record.
That is how to get yourself in a safe position. Not a great position, but the least bad you can do. I hope Bamboo agree to this.
BUT this is also the time for you to think how affordable this guarantor loan actually was before coronavirus came along… A loan is only affordable if you can repay it without having to borrow more money or get behind with other bills. Many guarantor lenders have done a very poor job of checking borrowers can afford the loans and the Ombudsman is upholding 90% of customer complaints about them. If you can win an affordabilty complaint then a) your guarantor is released, b) interest is removed and c) you can make a lower payment arrangement as it turns into a normal debt.
See https://debtcamel.co.uk/how-to-complain-guarantor-loan/ which goes into a lot more detail and has a template letter for a complaint.
Anon says
Thanks for the reply Sara,
The loan is affordable under normal circumstances.
Re cancelling direct debits: the payment is a continuos card payment 😳
They said they will get back to me by the end of the week, however the payment is due on Friday.
Sara (Debt Camel) says
You need to tell Bamboo you want the payment cancelled or it will leave you with not enough for the essentials AND tell your bank today that you want the CPA cancelled. Hopefully Bamboo will agree to suspend payments, but get yourself safe in case they don’t.
Paul cook says
Hi
Ballifs from CSA have been badging me about money. I’m self isolating due to virus. So got no money coming in. Plz give me some advice.
Sara (Debt Camel) says
Can you talk to National Debtline urgently – 0808 808 4000. You may not get through at first but persevere.
David says
I arranged monthly payments with my local court to prevent bailiffs and warrant of control. I rang them this morning to make my monthly payment and the lady told me bailiffs there are not working due to the current coronavirus and that I had the option to defer payments for 3 months until 24th June.
I just wanted to post to let others know that their courts may offer the same service due to the current situation. It’s left me with extra money for necessities and may be worth others who are in the same situation ringing to check if their courts are the same?
My debt was with Doncaster Court.
Sara (Debt Camel) says
good to know! Thanks.
Marl says
amigo has text my son to say that from his next payment, 26th March He has 3 months payment holiday, and added on to the end of his loan term. His next payment is due in June and they have stated that it may be the fact that one more month of a payment holiday may be required, but will review this at a later date. Amigo is not answering the phones, we think they are working from home.
My son put. Due to the governments legislation regarding 3 months payment holiday for mortgages loans, payday lenders and guarantor loans, because of the corona virus, and working 2 days a week, as is my guarantor, I now claim my 3 months payment holiday, and my 3 payments to be added on to the term of my loan.
Thought this may be useful, as peeps having real trouble with amigo.
Laura loomes says
Amigos won’t even let me have a 3 months holiday I phoned them today and they have basically said if I can’t pay the amount they want they will go after my guarantor but he can’t help cause he is self employed and now out of work due to this virus. I haven’t got a dd set up but got my card saved on my amigos account so they can take it that way but if they do I’m left with no money
Sara (Debt Camel) says
So get yourself in a safe position by cancelling the Amigo DD with your bank. And your guarantor needs to do the same. In this emergency, the most important thing is that you have money for food and your rent and essentials. As Amigo are being unhelpful, you can sort them out later.
And then also read https://debtcamel.co.uk/how-to-complain-guarantor-loan/ and think if you can complain the loans was always unaffordable. If you win this complaint (and the ombudsman is upholding 90% of these complaints at the moment because of Amigo’s poor checking!) then interest is removed from the loan, your guarantor is released and they have to accept a low payment, even £1 a month, if that’s what you can afford.
And your guarantor may be able to make a similar complaint – a lot of self-employed people would find it hard to be able to afford to pay someone else’s Amigo loan every month… A template letter for a guarantor to complain is here: https://debtcamel.co.uk/amigo-complaints-by-guarantor/. If he wins his complaint, he is released as guarantor.
Laura says
I can’t get my card details of there system they done it to me last month I was a couple of days late in paying so they used my card details that they have stored. I could afford the repayments when I first took out loan and my guarantor was working but he has had to stop because he is a carpenter and due to this Coronavirus he has had to stop
Sara (Debt Camel) says
You & your guarantor should delete the Direct Debits with your banks, then Amigo can’t take the money,
Kitty says
How did he manage to get this? I have asked them to do this for me but they will not budge- they have only let me defer the payment for one month?
Sharon says
Hi, I sent email like your son’s to Amigo last week and they haven’t replied. My loan was due today and they have sent text to me and my Guarantor, she is laid off and can’t afford to pay it either. I emailed again today but they still haven’t responded. Impossible to try phone them and when I last phoned them they were very abrupt and not helpful at all. I currently have affordability complaint against them with FOS but I know this might take some time. They are causing unnecessary stress to both myself and my guarantor. Who did your son address the email to at Amigo? Was it just complaints?
Marl says
Kitty just put in an email what my son put
kelly says
Hi Sara I currently pay Bristow and Sutor (bailiffs) £200 a month I have now been furloughed, Conan I get these payments reduced?
Sara (Debt Camel) says
I hope so – their website https://www.bristowsutor.co.uk/ says get in touch.
Susan MacDonald says
Hello
I am in a trust deed and it is done through a wages arrestment.
I have becomed furloughed as has my husband and now on 80% wages. I have requested a rent reduction but nothing confirmed yet. I went to my practitioner and they are refusing to lower my arrestment or even pause it for a month or 2.
Where do I stand on this as I can’t find any info at all.
Thanks
Sara (Debt Camel) says
I will ask a Scottish adviser to reply.
Alan McIntosh says
Hi Susan
No Trustee should do this in normal times, never mind now.
It is a clear breach of the guidance that is provided to the them by their professional body and the Accountant in Bankruptcy.
If your circumstances changes, they should do a review and reassess what you can afford. Needless to say you cannot take a 20% drop in income and keep paying what you were paying before.
You two choices. First you can complain if they refuse to do a review and ultimately take it to through their Insolvency Complaint Gateway (you can google this) and complain that they did not properly reassess the affordability of your payments due to a change in circumstances.
Alternatively, you can email or call the Accountant in Bankrutpcy (a Scottish Government Agency) and complain your Trustee is refusing to reassess what your contribution should be despite you reporting a change of circumstances.
You can also request the Accountant in Bankruptcy make a direction for them to carry out such a review under section 179 of the Bankruptcy (Scotland) Act 2016
Who is you
Susan MacDonald says
Thank you for replying. I am with Harper McDermott. I have emailed them again to request a review of my circumstances.
Marl says
My heart goes out to you all who can’t get a payment holiday from amigo it’s so dreadful of them, I hope that one day they get hung drawn n quartered for this, I really do feel for you all God bless you
Marl says
Think it was complaints he rang sharon also tell them they are causing you more stress in light of the corona virus and you will be getting in touch with your mp omg gl love
Marl says
Oh Sharon you could also write to fos about this, and explain they won’t give u a holiday break, in the now situation and causing you real anxiety and stress
Sharon says
Amigo haven’t responded to my trail if emails and tried to take payment for full amount out my bank with debit card however I had card freeze on so they couldn’t. I’ve sent yet another email detailing my stress and anxiety! No doubt be text messages to my guarantor about arrears. Was only due on 31st March, already bombarding us with texts but can’t have decency to reply to my emails.
Nicole says
Hi Sharon
Did you submit your affordability compliant to amigo before you went to the FOS?? I’m currently in same situation although I submitted my compliant directly to them! So far tho have heard nothing!!
Sara (Debt Camel) says
Hi Nicole are you saying you started bh sending a complaint to FOS and haven’t sent one to Amigo? That is is mistake! When did you send complaint to FOS?
Sharon Boyack says
I did original affordability complaint through a claims 3rd party company. Amigo refused but claims co advised me to to pursue it further so they submitted it on my behalf to FOS. That was on 3rd March. Not heard anything as yet.
Marl says
Says something about lenders on experience top of page, they are not putting defaults n stuff on peeps records for a3 months or more and that the lenders are following suit something on those lines have a look
Bobby says
Hi Sara do you know if you have to pay tax on the coronavirus 80% scheme thanks
Sara (Debt Camel) says
I am not a tax expert but if you are employed, then I expect this will paid like normal pay through your employer’s payroll and be taxed in the normal way.
If you are self employed, there is a lot of help on here: https://www.litrg.org.uk/latest-news/news/200402-press-release-litrg-publishes-coronavirus-guidance-tax-and-related-benefits.
Sarah says
Fca have said today lenders should give 3 month payment breaks if needed, does this include amigo?
Sara (Debt Camel) says
yes… but they haven’t said that a guarantor lender should not go after the guarantor during this period. The FCA needs to clarify this!
Jason says
Personally think RBS is very poor. When you go onto website for loan deferral you have to download the app and send a message in the help contact us section. When I did it said estimated reply time 8 days. All it let me write was I’ve been impacted by coronavirus so it’s not as if in 8 days time it will be sorted. Should really be a form you submit. These are big business full of expertise and talent but weeks later still not sorted
Banditqueen says
What I want to know is are debt collection people likely to come out in this climate and can I refuse them entry if I am not meant to have contact?
Sara (Debt Camel) says
what sort of debt collectors and what sort of debts?
Is this just something you are worried might happen, or have you already been told a debt collector (or bailiff?) will come round?
Khalid says
Hello, i need some help for my guarantor loans. My father was self employed but now cant get any work because of the lockdown and my sister work place has shut down and only going to get 80% of wages. Most of the household bills will have to be paid by myself now and I’m not sure how to approach my 2 guarantor loans about this. Also can they go after my guarantor if I’m in this position.
Sara (Debt Camel) says
Who are the two lenders?
Who is your guarantor?
Do you have other debts as well?
Has your father applied for benefits, probably Universal Credit?
Is there rent or a mortgage to be paid? In whose name is the tenancy / house?
khalid says
The 2 lenders are Amigo and UK credit and with the same guarantor who is not working atm. I have another loan as well and a credit card I pay every month.
My father has applied for universal credit but could be waiting a while before any payment comes and im not sure if that will be enough. Mortgage we wont be paying for 3 months but still have the other priority bills to keep up with.
Sara (Debt Camel) says
What was the guarantor’s finacial position when the loans were approved – could they really have afforded to make all the loan repayments and still been able to pay thier normal expenses and other debts?
Who owns your house – you, your father?
khalid says
He’s not working because of the lockdown but still getting 80% and my father owns the house
Sara (Debt Camel) says
So a lot of points.
1) you need to ask both lenders for a payment holiday. Some people have reported that Amigo has agreed to 1 month. It may be at the end of a month you can ask for another month.
2) the FCA is proposing that lenders have to give a 3 month payment break to people who have coronavirus but this isn’t yet definite. There may be more news this week on it.
3) But a guarantor lender may still be able to ask the guarantor to pay. In the end if you can’t pay, you may have to warn you guarantor they will be chased and suggest they cancel the DD to the lenders so their money isn’t taken. If your guarantor also has Coronavirsus problems them the lenders may have to give him a 3 month payment break.
4) I am assuming you and your sister live with your father. If she is getting 80% of her wages she should be able to help with the bills? She may be able to get payment breaks if she has debts?
5) also read https://debtcamel.co.uk/how-to-complain-guarantor-loan/ and think whether you can put in an affordability complaint about your loan – this has to be that you could not afford the loan when you were given it, not just that you can’t afford it now. And your guarantor may be able to make an affordability complaint if he could not afford the repayments. a lot of people are winning affordability complaints about guarantor loans so this is worth looking into if you feel the loan repayments have been too much for you and have meant that you have had to borrow more money..
khalid says
He’s not working because of the lockdown but still getting 80% and my father owns the house