Universal Credit: debt management and other solutions

Let’s be honest, Universal Credit and the way it was rolled out was a farce. Many families went months without receiving payments, and when they did start to get their money, it was much less than they used to receive. 

The government scheme that’s supposed to give people a decent standard of living has had the opposite effect. Instead, to cope with the reduced household income, people have been forced to take out credit. If they haven’t done that then in some cases they’ve simply had to miss payments to priority debts such as council tax, utility bills and, in some cases, their rent and mortgage.

If you’ve been struggling with debt and your finances in general since the Universal Credit roll out, don’t worry. There are options available to you that you might not have heard of. These options allow you to consolidate your debts into affordable repayments, or in some cases, write off debt altogether.

Universal Credit and debt management

Debt management, or debt management plans as they are more commonly known, are a very popular debt solution. It allows you to consolidate your unsecured debts payments into one affordable monthly payment. The reason it’s affordable is because it’s based on your income and outgoings. So, for example, if you have a store card, a credit card, and a loan; instead of paying them individually, you’ll just make just one payment to your debt management provider.

Universal Credit and IVAs

You may be able to solve your Universal Credit woes using an Individual Voluntary Arrangement, or an IVA as it’s better known. This is the fastest growing debt solution in the UK. It works a little like a Debt Management Plan, however, most people write off some of their debt at the end - in some by as much as 70, 80, or even 90%.

Universal Credit and Debt Relief Orders

Debt Relief Orders, or DRO, are a radical way to ease your financial struggles. A DRO allows you to write all of your debt. There are no more payments to your creditors, just a one off payment of £90. Before you get too excited, there is a small catch. The qualifying criteria for this debt solution is strict. However, if you do qualify, you’ll be able to spend more of your Universal Credit on the things you want.

Universal Credit and bankruptcy

To some people, bankruptcy can be a scary word. For most, bankruptcy won't be the best way to deal with their household debt. However, for a few, this allows them to get the fresh start that they need. So if you’re looking for debt help, keep an open mind. What might be bad for some can be a lifeline for others.

Some things to keep in mind

Remember that the debt solutions listed above will impact your credit rating. It could be that if you’ve been struggling with your finances that your credit rating has already been damaged. There are pros and cons to each debt solution. Click through on each of the links given above for more information about each solution.

How do I get help with Universal Credit 

If you’re in debt because of Universal Credit, or for any reason, and you need to manage your debts, the best way to find the debt solution that suits your circumstances for you is to speak with an authorised debt management provider. 

You can speak with a debt advisor by clicking on get started (below) and completing a few simple questions. We have information about what a call with a debt advisor involves if you’re a bit worried about it. The call doesn’t impact your credit rating in anyway, and it’s completely up to you if you take their advice. But if you are struggling with to manage your debts since you started on Universal Credit, it’s definitely worth checking out if they can help.

Speak to experts you can trust

Start to get debt free today

Related Posts

Leave a Reply