What are creditors doing to support customers through coronavirus crisis?

The coronavirus crisis is causing serious financial problems across society, and many people are struggling to keep up with repayments on mortgages, rent, credit cards, and other day-to-day liabilities.

Although the government has introduced a number of measures to help individuals and employers during the pandemic, such as support for wages, the worry remains that creditors could pursue arrears and ultimately take legal action to recover their money.

So what are creditors doing to support customers during the COVID-19 crisis? Here’s a rundown of some of the help that may be available to you if you’re in debt.

Banks

Mortgages

The government has directed mortgage providers to offer customers a three-month mortgage repayment holiday if a mortgage account wasn’t in arrears before coronavirus, and the customer is now struggling to pay.

If you were already in arrears when the coronavirus crisis started, the situation may be slightly different, however. Your lender may be able to offer you an alternative, such as temporarily lower repayments if they’re not willing to provide a repayment holiday, so it’s important to let them know your situation as soon as possible.

Overdrafts

Banks are offering customers with arranged overdrafts an interest-free period of up to three months on overdrafts of £500 or less. If you have an existing facility that’s currently under £500 you can ask your bank to increase it to this amount if you need access to more cash, and use it interest free for the three-month period.

Landlords

In Scotland, tenants in the private and social sectors cannot be evicted for six months unless the reason for eviction proceedings is criminal or anti social behaviour, in which case the timescale is three months.

The six-month time period is designed to help tenants in financial difficulty improve their situation without losing their home – offering time to apply for and receive state benefits where necessary, for example.

Credit card and store card providers

Credit card and store card providers are supporting customers by offering a three-month payment holiday under similar conditions as mortgage providers. If you apply for this and you’re accepted, you’ll make no payments for three months.

If you had credit card or store card arrears before the start of the coronavirus crisis, you may not be eligible for the payment holiday and will need to speak to your provider to find out if they are offering any other form of assistance.

Utilities and household bills

Energy customers can access support by contacting their provider, and there’s specific help available if you have a prepayment meter - your supplier may be able to provide credit temporarily, which you pay back at a later date.

Utility companies are helping customers in other ways too – by reducing repayment amounts for arrears, for instance, and generally being more empathetic to the situation their customers are in due to coronavirus.

Scotland Debt Solutions has been helping Scottish residents deal with debt since 1989. Our team of experts are here to support you during this crisis and beyond – please get in touch to arrange a same-day consultation free-of-charge.