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Having trouble paying your bills? Here’s how to ask your provider for help

How do you know you are in financial difficulty? Many people are asking this question as the cost of living crisis continues to unfold around them.

Even before energy prices started to rise to extraordinary levels, about a quarter of the population admitted that it was difficult or very difficult for them to pay their bills, according to government figures.

This covered everything from broadband and water bills to council tax and car financing.

Naturally, much of the support programs available in these scenarios are for people who are receiving benefits or who are more vulnerable.

But I have been contacted by a wide range of people from different backgrounds, ages and incomes – all of whom are deeply concerned about their ability to meet rising costs. Many of them don’t believe they are eligible for help.

The fact is this. It’s possible to have a nice house and a good job and not be able to afford essential expenses.

If your expenses are less than your income, or if the money you have left after paying bills is limited or insufficient to cover you in an emergency, you are in financial difficulty.

So if you are part of this group, what kind of help can you expect? And how do you get the company to listen to you?

You don’t have to be in debt to finally be in trouble, in fact, it’s best to seek help before you get to that bad point.

The definition of “in financial difficulty”

Regulators, ombudsmen and consumer organizations generally agree that this includes people who cannot afford to pay their bills, either temporarily or in the long term.

The help you may be offered will depend on your personal situation.

So if you’re between jobs but expect your cash flow to be affected for a few months, a company might offer you payment breaks, waive fees and interest, or agree to lower payments to allow you to go through this period.

If your problems are longer term, the proposals you will be offered should aim to ensure that your debts do not increase significantly and that your payments are set at manageable levels.

When to seek help and if it affects your credit report

Getting your hands on a business can be a challenge these days. The good news is that as soon as you say you are having financial difficulties, the company should take action.

Before you pick up the phone, take some time to do some quick budgeting. It should only take about 15 minutes. In order to help you, companies are allowed to ask for details of your finances.

Make a basic list of your regular expenses versus the money you receive each month. This will allow the company to understand the level of support you need.

Once you’ve discussed the proposals with the company, ask them to confirm what they’re offering in writing, so you have time to think about the offer, see what difference it will make, and educate you on any subsequent repercussions (such as damaged credit reference files or additional interest after payment holidays).

All major regulated industries – financial services, energy, water and telecommunications – said companies should tailor solutions tailored to the specific circumstances of their customers.

We have more advice on how to manage your debts.

What kind of help could I be offered?

Most industries have remarkably similar rules and guidance from their regulators when it comes to supporting vulnerable people or those in financial difficulty.

These options may include:

  • Offer realistic payment plans that match the client’s personal situation
  • Giving people a payment holiday or suspending payments to give them some breathing room
  • Suspension of interest and debt charges and reimbursement of excessive charges already applied
  • Provide information on cheapest fares and fares
  • Regularly assess how their financially challenged clients are managing their plans and stay in touch proactively
  • Avoid debt collection services or cut off supplies where possible

Energy bills

Energy Regulator Ofgem has listed any help you could potentially receive from energy companiesas well as information on available programs and grants.

Businesses need to be proactive and contact overdue customers. They must ensure that all debt management processes are conducted in a fair and reasonable manner.

water bills

The Water Consumers Council gives detail of the different media available for people struggling with water bills. Ofwat, the regulator, has a support list for people in difficulty, here.

Mortgages

The Financial Conduct Authority told me that lenders must consider individual circumstances. This may include tailor-made support and payment plans if required.

Broadband bills

For those behind on broadband bills, regulator Ofcom said providers should take all necessary steps not to disconnect customers.

They should offer payment holidays and refund plans, offer social rates or cheaper plans where possible, and refer customers to organizations or charities if they are in serious difficulty. Learn more, here.

There’s also plenty more on cost-of-living grants in our guide.

Can they cancel my debt?

A moment of realism here. Although companies can agree (and sometimes agree) not to charge you for some of the money you owe, this is not a requirement.

Nor do any of the guidelines address the broader implications of the deeply concerning costs that we as a nation face in the months ahead.

Read more: I haven’t received the £326 cost of living payment – does that mean I’m not eligible?

Is there someone who can manage my debt for me?

If you or someone you know is facing long-term financial problems or feeling overwhelmed with debt, I highly recommend speaking to the Debt Free Charity. Stage change.

StepChange can help you by developing a practical and realistic debt management plan. They will contact your creditors on your behalf and negotiate what payments you can afford. You pay an agreed lump sum to the charity each month and they do the rest.

Like any debt plan, it’s not easy, but it’s a solution. Never pay for a debt management service – there are free options.

Learn more about debt help and how to contact a debt counsellor.

Can they refuse to help me?

The bottom line is that customers should be treated “fairly”.

If you think the company isn’t offering you any practical help with your debts, file a formal complaint and ask them to suspend interest and charges while the matter is investigated.

Many companies have free mediation and dispute resolution mechanisms that you can go to if you’re still unhappy. The most notable of these is the Financial mediation service.