In November 2020, the FCA has changed the rules about Coronavirus payment breaks. You can now have 6 months of payments breaks from a mortgage, car finance, most loans, all credit cards and catalogues. If you have had 6 months already for a debt you won't be able to get more from that lender. More than four million of these payments breaks have been taken up until the end of October. And … [Read more...]
When mortgage payment breaks end, can you pay your mortgage?
On 17 November 2020 the FCA confirmed its new mortgage payment break rules. You can have 6 months payment deferrals - sometimes called payment breaks or payment holidays - if you or someone in your household had had financial problems because of Coronavirus. If you originally had a three month payment break then went back to making the normal mortgage repayments, you can now get a second … [Read more...]
Can you afford your car finance now payment breaks are ending?
Coronavirus payment breaks have been a lifeline for millions since the first lockdown started in March 2020. But now they are being restricted... You may have lost your job or be worried that may happen. You may be back on furlough or your partner may have had their hours cut or a self-employed business may have been badly hit by Coronavirus. If you know you can't pay all your debts, bills … [Read more...]
3 month car finance payment breaks because of Coronavirus
In April 2020, the Financial Conduct Authority (FCA ) set out new rules for car finance lenders on how they should respond to customers who are affected by coronavirus. It followed the general "three-month payment breaks" approach used for other credit from mortgages to credit cards. In July, the FCA these rules were extended to allow for a first or second payment break to be taken up until … [Read more...]
“When can I offer £1 to a debt?” – FAQs about token payments
A reader asked if he should offer a £1 a month token payment to his debts, wondering if his creditors would ever accept it. The simple answer is that you should make token payments offers: TO non priority debts IF you CAN'T get a coronavirus payment break WHEN it is all you can afford AND you expect your situation will improve. In 2020 millions of people have reduced household incomes … [Read more...]
Why all coronavirus payment breaks should be extended
UPDATE: On 2 November the FCA said it WILL be proposing further extensions for other types of consumer credit - that if you haven't had a break so far, you can get a 6 month break and if you have had a 3 months break since July, you can have another 3 months. On 31 October, after the Prime Minister had announced a month national lockdown, the FCA issued a statement: we will propose that … [Read more...]
Coronavirus – can’t pay your IVA? Would a break help?
If you are worried about your IVA because Coronavirus has affected your household finances, this article looks at the extra flexibility to help people in IVAs. This help has been extended to April 2021; and how things may change in the next few months, with furlough and payments breaks likely to end. Your IVA firm and your creditors will not want your IVA to fail because of a temporary … [Read more...]
“On furlough, now redundant – what about my mortgage & IVA?”
A reader, Mr D, asked: I am being made redundant, no redundancy pay as I didn't work there long enough. We have managed my IVA payments when I was on furlough by taking a mortgage holiday but that is ending and now our household income will be halving. We will struggle to pay the mortgage let alone the IVA. My partner earns too much for me to get any benefits. I know I have to tell my IVA, but … [Read more...]
Now is the time to reform SMI – before mortgage breaks end
Support for mortgage interest (SMI) provides help to people on benefits with part of the cost of paying a mortgage. Most homeowners whose household finances have been affected by Coronavirus have taken mortgage payment breaks. This has avoided problems with mortgage arrears and people haven't had to think about how they could get help with their mortgage costs. But mortgage payment breaks … [Read more...]
“What should I do when my 3 month credit card payment break ends?”
Ms D asked about her options now the three credit card payment break has ended: I’ve come to the end of my 3 month payment freeze and as the card lender has kept adding on interest I have gone over my credit limit, so the first payment due was nearly £400. I contacted them as I couldn’t afford that amount -my partner is self-employed and not receiving any income due to coronavirus. They agreed … [Read more...]