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Coronavirus (COVID-19)

Personal finance and coronavirus

In this section you'll find information and updates related to coronavirus that are relevant to personal finance issues.

The UK's response to coronavirus is changing regularly and often very quickly. While we'll continue to make every effort to keep this page up to date, there may be short periods where what you read here is not the latest information available. Where possible we've tried to provide links to official sources, so you can check the current situation.

Continued support for consumers of financial products

The Financial Conduct Authority (FCA) regulates financial services firms and consumer credit firms who in turn have to comply with the rules of the FCA.

The FCA have put measures in place to help with short-term payment problems caused by the pandemic.

Dealing with mortgage repayments

The Financial Conduct Authority (FCA) website sets out full details of what you should do if you are struggling to keep up with your mortgage payments and what help you can expect from your mortgage lender.

Dealing with repayments of other loans

The FCA has also published guidance for firms that provide credit facilities, aimed at ensuring you're treated fairly and in a way that will help you get back on track if you're experiencing longer-term financial problems.

This guidance points out that consumer credit firms should provide their customers with tailored support where the customer remains in payment difficulties. It is expected that this tailored support will reflect the financial uncertainties and challenges that you might still be facing due to the effects of COVID-19.

When agreeing with you how to structure your repayments while you're under continued financial pressure, firms should:

  • be lenient and give due consideration to your financial situation;
  • agree arrangements that are sustainable, considering all your other debt and essential living costs;
  • grant you a reasonable time and opportunity to make repayments and not pressure you into agreeing to make payments over a shorter period than is viable;
  • be able to recognise if you are vulnerable and must have adequately trained staff that are able to give you the support you may need; and
  • allow you to consider all your options and give you time to seek debt advice before they require your decision.

Dealing with payment of non-investment insurance premiums

The FCA has published guidance setting out what you should do if you're struggling to pay your insurance policy premiums. It also discusses what help you can expect from the insurance firm.

The guidance tells firms that they should aim to reduce the impact of temporary financial distress you're experiencing. They should also make sure that the existing insurance you have still provides you with value for money and meets your needs (given that your needs may have changed due to the pandemic).

Firms should not simply cancel insurance products if you fall behind with premiums. They'll be expected to take all reasonable steps to deliver a fair outcome. These steps may include re-assessing your risk profile, which may mean reducing your cover at a reduced cost. For example, if you previously drove to work daily covering thousands of miles annually, but are now not travelling at all, your car insurer could temporarily offer you reduced cover.

Other steps that firms could take include:

  • Offering other suitable but more affordable products
  • Waiving cancellation or amendment fees
  • Offering payment deferrals.

Dealing with payment of essential bills

The UK government has published information for people who are struggling to pay essential bills because of coronavirus.

Court action

If you're in the process of being taken to court over a debt, see this page under 'Court action' for information on how the courts are functioning during the pandemic.

Bankruptcy help (Scotland)

There are changes in the law that mean you have more flexibility to apply for bankruptcy and more protection from creditors.

We've listed the main changes below but see the Accountant in Bankruptcy website for more information.

Temporary changes

The following changes apply until 31 March 2022.

Moratorium extension

A moratorium is the period during which the people you owe money to can't take any formal action against you to recover it. The purpose is to give you time to consider your options and get appropriate advice.

The moratorium starts on the date on which you give the Accountant in Bankruptcy (AiB) notice that you intend to apply for bankruptcy (also known as 'sequestration'). It now ends after 6 months, rather than the usual 6 weeks.

You must, however, still keep in mind that if a moratorium is approved, your details will be published on the public Register of Insolvencies and this would probably affect your credit score.

Creditor petitions

Creditors can only apply to court to make you bankrupt (also known as 'sequestration') if you owe them £10,000 or more. The previous limit was £3,000.

Permanent changes

Minimal Asset Process (MAP) bankruptcies

MAP bankruptcies are designed to be a simpler process if you're on a low income and have few assets. Previously, you couldn't make use of MAP if your debt exceeded £17,000, but that threshold has now been raised to £25,000. Any student debt you have is ignored for the purposes of calculating this total. Also, the MAP application fees have reduced from £90 to £50, and have been removed entirely if you receive certain benefit payments.

See the Accountant in Bankruptcy website for more information.

Digital signatures

All forms in the bankruptcy process (except Form 9) can now be signed using an electronic signature.

What is the law guide

The Desktop Lawyer law guide aims to present the law to you in a comprehensive yet jargon-free and easy-to-read format. Our law guide is constantly kept up to date with changes in business and family law by our team of in house solicitors, and includes information across all the legal jurisdictions in the UK.

Our law guide is free to use. Where we provide documents related to this area of law, or where they may help you with any legal issue in this area, they will be listed to the right of this message.