What happens to my debts if I’m on long term sick leave?
Being off work due to illness is a stressful experience – especially if your sick pay allowance is being reduced and you’re worried about paying the bills. Unfortunately, lenders will still expect to be paid so the best thing to do is manage your situation as best as you can.
Do you have insurance?
If you have a mortgage, check to see if you have mortgage protection cover. This could help ease stress over meeting mortgage repayments. Similarly, if you have a loan or credit card you could have Payment Protection Insurance (PPI) to cover you during times of illness. You may not know that you have this cover due to the way PPI was sold in the past, so just double check with your provider.
Benefit entitlement
Do you qualify for housing benefit or incapacity benefit because you cannot work?
You could be eligible for financial help – so make sure you check with your local authority or visit the Directgov website for more information on ill or injured benefits.
Dealing with lenders
Your main concern should be your priority debts – these include rent / mortgage, council tax and utility bills. Falling behind on these types of bills can have serious repercussions as providers could take you to court or cut off your energy supply if bills go unpaid. The best thing to do is to contact your providers and explain your situation to them.
They may be able to help you during this period. For example if you are now on a very low income, you could qualify for a council tax discount.
Dealing with debts
If you have unsecured debts such as credit card, catalogue account or store card debts, you could contact your lenders and explain your situation. If you can’t afford to make full repayments, you could offer to make a token payment until you’re back in work.
If you are in a Baines & Ernst, Debt Management Plan and can’t afford to meet repayments, we could put your account on hold for 4 months and contact your lenders on your behalf and explain your current situation.
For further debt help and advice, our friendly team of advisors are only ever a phone call away.
