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Coronavirus and your debts (Scotland)

Credit cards, store cards, personal loans and catalogues

Personal loans, credit cards, store cards, catalogues

The FCA guidance, which may have meant you could apply for a payment holiday, ended on 31st July 2021.

Contact your lender as soon as possible if you are struggling to make your repayments. Discuss your situation and ask what options are available. Ask you lender how this will affect your credit file.

FCA guidance says that your lender:

  • ​should take your circumstances into account when discussing a repayment arrangement;
  • should not pressurise you into repaying your debt in an unreasonably short time; and
  • should recognise vulnerability and respond to the needs of vulnerable customers.

​For more information, see the FCA’s Consumer Credit and coronavirus: Tailored support for clients.

Step Change Covid Payment Plan (CVPP)

If you are unable to afford your full payments, a CVPP may be an option. Contact us for advice.

Overdrafts

The FCA has confirmed that it expects banks to contact overdraft customers who have received temporary support to determine if they still require assistance. If you need further support or if you ask your bank for help for the first time, the bank should:

  • ​provide tailored support such as reducing or waiving interest;
  • agree a programme of staged reductions in the overdraft limit; or
  • support you to reduce your overdraft usage by transferring the debt.

Your bank should not reduce your credit limit or suspend or remove an overdraft facility if that reduction, suspension or removal will cause you financial hardship.

Other bank debts

If you are struggling to pay unsecured bank debts that are not covered by the new FCA measures, you can still contact your bank to explain your situation. Each bank will consider what help it may give on a case by case basis. Go to their website to see what help is available. You can also call your bank, but be aware that you may have to wait some time. 

Ask you lender how any arrangement that you agree will affect your credit file.​

Avoid taking out more credit unless you know that you can afford to pay it back. 

If you have debts which are now unaffordable, contact us for advice. While you are waiting to receive the advice you need you can send your creditors a letter asking them to hold action on your acc​ount​ due to coronavirus​.

Payday loans, Buy now pay later, rent-to-own, pawnbrokers and motor finance

The FCA guidance, which may have meant you could apply for a payment holiday, ended on 31st July 2021.

If you are unable to make your repayments, you should contact your lender now to discuss your situation and what support is available. Under current FCA guidance, lenders are expected to:

  • ​provide tailored support which reflects your individual circumstances;
  • offer a range of shorter and longer-term options;
  • not pressurise you into repaying your debt in an unreasonably short period of time;
  • put in place an affordable repayment arrangement which takes into account your wider financial situation, including other debts and essential living expenses; and
  • suspend, reduce, waive or cancel any interest, fees or charges to prevent your balance escalating after a repayment arrangement has been agreed. 

Lenders should be clear on how any repayment arrangements will be recorded on your credit reference file.​

Sheriff court fines and hearings

As the courts have temporarily suspended their counter facilities for the payment of fines, you may need to choose another way of paying. For most fines you can use the court online payment system or automated phone system. However, for penalties that need your driving licence to be endorsed, you will need to send your payment and driving licence by post. For more information, see the Scottish Courts and Tribunals website.

If you have been told to attend a court hearing, it is important that you attend. However, to avoid an unnecessary journey, we suggest that you contact the court that is dealing with your case to check whether your hearing is going ahead.

If you have missed payments on a fine and can now afford to pay the arrears, do so. If you have financial difficulties and are struggling to pay, contact a Fines Enforcement Officer straightaway. Call 0300 790 0014 and explain your situation.

Benefit overpayments

The Department for Work and Pensions (DWP)  temporarily stopped taking action to recover the following benefits for three months:

  • DWP benefit overpayments;
  • tax credit debts being managed by the DWP; and
  • ​social fund loans.

These overpayments started to be collected again from July 2020.

If you previously repaid by direct debit, you will receive a letter from the DWP before repayments start again. If you stopped the repayment with your bank, you may need to set up the repayments again from July 2020. Speak to the DWP Debt Management line on 0800 916 0647 if you are unsure.

If you previously repaid through your wages, the DWP will write to you to see if an alternative repayment plan can be set up. If you previously repaid through your benefits, you will be notified of repayments starting again by a letter or Universal Credit journal entries.

The DWP will also restart other methods of recovery such as using debt collectors.

If you are experiencing financial hardship and think you will struggle to afford the repayments you were previously making, speak to the DWP Debt Management line on 0800 916 0647.

Eligible Loan Reduction Scheme​

Repayments to the Eligible Loan Reduction Scheme will also start again in July 2020. You’ll be notified by letter and don’t need to do anything. These loans are usually through credit unions or other not-for-profit organisations.