Often re-financing your debt or getting a better deal isn't enough. You may need to take further action to reduce your payments.
One option is to simply contact your creditor directly and request a payment break or a reduction in your monthly payments.
You can do this by downloading one of the template letters at the end of this article.
You should adapt the template letter to your own personal financial circumstances. See below for the following template letters: (1) reduced offer letter to creditors; (2) 30-day holding letter to creditors; and (3) token payment letter to creditors.
There are a number of options available to you to that can help prevent any legal action being taken and help you deal with all of your debts in a manageable way. See our link below to find out more information about these options and what is the best option for you.
Click here to see our debt solutions to money worries (opens in a new tab)
If you need a period of breathing space to consider whether to apply for bankruptcy, a trust deed or Debt Arrangement Scheme (DAS) debt payment programme, you can request a moratorium. This is an important step which could affect your credit score, so you should seek money advice before proceeding.
A moratorium will stop any creditors taking further legal action against you. Due to covid related legislation passed last year, a moratorium currently lasts for a period of 6 months up from six weeks prior to the change. The legislation also removed restrictions on how often someone can apply for a moratorium, previously only one moratorium could be applied for every 12 months.
You can download the moratorium form here (https://www.aib.gov.uk/bankruptcy-scotland-regulations-2016-form-33-moratorium-notice-intention-apply).
The form can be submitted to the AiB via this link (opens in a new tab)
Failing to deal with your debt can have serious consequences. It will affect your credit rating. Your creditor may take Sheriff Courts action.
For more information you can read the Scottish Courts guides and information on court action (opens in a new tab) - for simple procedure (claim up to £5,000) and ordinary procedure (claims over £5,000).
Watch this short video, our money adviser Mark Wilson, gives a summary of a Moratorium: