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Act Early To Reduce Covid-19 Impacts On Personal Finances – R3 North East Chair

ByChristopher

May 4, 2022 #Coronavirus

Staying calm, assessing all your options, talking to the people to whom you owe money and taking the right advice are the keys to retaining control of your finances in the face of the coronavirus pandemic.

That’s the advice of Alexandra Withers, North East chair of insolvency and restructuring trade body R3, after the organisation released a checklist for consumers who are worried about the financial impact of COVID-19.

Even before the pandemic, North East England has already had the highest rate of personal insolvency for any part of the UK in each of the last eleven years, with the most recent annual figures from the Insolvency Service showing a rate of 33.2 individual insolvencies per 10,000 people in 2018.

And with greater problems now expected to follow, Alexandra Withers, who is an associate solicitor in the insolvency department of Short Richardson & Forth Solicitors, is advising people across the region with money worries not to put their heads in the sand in the hope they will go away, especially if they already have debt arrangements in place.

She says: “The pandemic is obviously having a serious effect on pretty much everyone’s finances – people are seeing their income and hours cut, are having to take mandatory unpaid leave, and in some cases are losing their jobs, while we know it is almost certain that there will be longer-term economic consequences.

“Right now, it’s no surprise people are worried about their financial situation, but it’s widely accepted this is something that no one can tackle alone. There is help and support available, and steps you can take to help you feel more in control.”

Formal personal insolvency options include Individual Voluntary Arrangements, bankruptcy, or Debt Relief Orders, but by acting early, individuals will have many more options open to them.

Indebted individuals may also be eligible for benefits, payment ‘holidays’ for mortgages and loans, and support with telecoms and energy bills.

Alexandra Withers continues: “Taking proper stock of your finances, your incomings and your outgoings, and what savings you might be able to make will help you develop a clear picture of where you stand, and will make it much easier for you to consider your options and make you feel like you’re taking control of your situation.

“A conversation with a qualified and regulated professional about your finances and debts will give you the full picture of your situation and a good idea of the range of solutions that are open to you to manage and resolve it.

“If you know that you won’t be able to pay a pending bill or make a scheduled repayment, contact the relevant business or person in question and explain your situation.

“Having these conversations is never easy, but they’re better done sooner rather than later. In many cases, lenders are likely to be sympathetic and offer extra time to pay, especially with larger financial services companies and banks, as they will have formal systems in place for dealing with people in crisis.

“The sooner you seek advice, the more options you have open to you, and seeking advice early from a reputable source will also mean that any decision you take will be far more considered than one you would have if you left it until later.

“Government and industry are working together in a massive effort to lighten the pressure on consumers. Do your research and see what’s out there that could help you – you may be eligible for more support than you think.”

For local sources of personal insolvency advice, try the ‘Find a member’ tool on R3’s website: www.r3.org.uk/about-r3-insolvency-restructuring/find-insolvency-advice/