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Managing debt when living with a disability

No bank or lender is allowed to discriminate against you based on your disability. This guide explains how to deal with debt and where to get the help you are entitled to.

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Falling behind on payments

The first thing to do if you are falling behind on payments is to contact your creditor. Explain your personal circumstances and ask what alternative repayment schemes are available to those struggling with debt. The earlier you can get in touch, the more willing they will be to find a solution. Ask for your original credit agreement, so that you can be sure how much you owe.

They may be able to readjust your repayment schedule and tailor it to your personal circumstances, especially if your income has changed. If you know how much you can afford to pay back each month, they should plan out payments that are affordable. By reworking repaying your debt into an affordable process, you will greatly reduce the chance of missing repayments or defaulting – which will benefit you and your creditor.

There are downsides to lengthening the repayment process. Most notably, you will likely end up paying more in interest. However, if you are struggling with debt, meeting repayments should be your priority. Paying extra interest might feel frustrating, but in the long term it will be a better option than missing your repayments and damaging your credit score.

If changing the schedule is not enough to ensure you meet repayments, there are still further steps you can take.

What free advice is available?

Try to avoid contacting debt management agencies who charge for their advice. If you are already in debt, it is wise to avoid services that are going to increase that burden – especially when there are some great free services available.

If you're struggling with debt you can get free help from:

These services connect you to trained advisors who can give you practical advice on the steps you need to take to better manage your debt. By setting up a structured debt management plan with an expert, you can get to grips with your situation and plot a route out of debt.

Make sure any debt management advisor you speak to is aware of your disability, as it will have an impact on your rights and benefit entitlements.

An initial conversation with a debt adviser will likely involve:

  • Helping you understanding your personal circumstances and rights

  • Making a list your debts and creditors

  • Organising your income and expenses into a budget

If you need personal or emotional support, charities like Scope are committed to providing practical information and assistance to people with disabilities.

Practical help

If you need more practical help with your money – such as filling in important documents, attending meetings, using online services or getting access to cash – you can nominate someone to help you. It would need to be a person you trust completely. 

If you need this kind of help, contact your bank to request a third-party mandate arrangement. If approved, this will give your nominated person access to most basic features of your bank account.

You could also consider setting up a power of attorney. This is a legal arrangement that allows someone else to make decisions for you. You can find out more here.

Allowing someone access to your finances is a huge decision, so you should only do so if you cannot manage, and only ask someone you trust completely.

Debt collection

Any debt collection agency assigned to recover your debt is legally required to take your disability into account. If you believe this has not happened in your case, you may have been a victim of disability discrimination.

Prioritising your debt

When it comes to managing your debt, understanding what bills to prioritise is key.

Some debts are more important than others. Not paying your council tax, income tax or TV licence might be a criminal offence. Not meeting mortgage payments or your rent could put your home at risk. These should generally be your priority.

However, you should also consider how long a bill has been outstanding. If you are at risk of having your power or broadband cut off, it may be best to pay that bill first if the others can wait.

Bank debt, store cards and other loans might be debts that can be reassessed if your circumstances have changed.

It is best to contact a free debt advisor to get the best information on how to prioritise your repayments.

State benefits

If you have a disability, you may be entitled to government benefits or interest-free loans. You can find out more about the benefits and support you are entitled to here.

Utilities suppliers

If you are in debt to any of your utilities suppliers – or you don’t think you will be able to pay your next bill – contact them as soon as you can. They may be able to reduce your debt, change your tariff or set up a repayment plan.

You could also check to see if you are eligible for the government’s warm home discount scheme. This can cut the cost of your utility bills and potentially get you out of debt to your supplier.

When you contact your supplier, it can be helpful to mention if you have a disability. Notifying your supplier of your disability could mean you are able to register for their priority service, free annual safety checks and emergency call-out priority. They should also ensure you are protected from being cut off if you were to fall into arrears.

Local council support

Your local council may have programmes in place to support people with disabilities. Contact them to find out what they can do to help.

Even if they do not supply financial support or advice, you may be able to get help with day-to-day tasks, essential equipment or home adaptations that might reduce the amount of money you spend each month. They should be able to assess your needs and tell you what assistance you qualify for.

You should also get a discount on your council tax if you have a disability. This can a have a significant financial impact if you live in a particularly expensive area or are already in arrears.

Charitable grants and support

You can find out what grants and support you might be eligible for using this tool from Turn2Us.

It may be that you are eligible for grants that are not exclusively for disabled people, such as if you are over a certain age or on a low income.

You may need to provide some paperwork when you apply, such as a letter from your occupational therapist or a social worker.