Struggling with a problem debt? This is how you can give yourself breathing space

A couple discuss bills as a government consultation on a breathing space for those in debt has been

A couple discuss bills as a government consultation on a breathing space for those in debt has been greeted by financial advice organisations. Picture: Thinkstock/AntonioGuillem. - Credit: Getty Images/iStockphoto

We all need a bit of breathing space every now and then, writes James Walker, founder of Resolver.

Life can get complicated, with family, financial, and work commitments all coming in to play at varying degrees over time.

Most of us will experience some hard times as far as cash is concerned. But it's surprising how little we know about our rights – and how vague some of those rights actually are.

The government has recently proposed offering a six-week 'grace period' to people struggling with debts.

I think this is a great idea – but there's a lot more that could be done too. People get in to financial difficulties for all sorts of reasons, so it's important that when they ask for help, a plan appropriate to their circumstances is set up.

In practice, the rules about helping you when you're struggling with cash come down to each industry's 'good practice' guides, regulations and decisions by ombudsmen and the courts.

This means there's a real mishmash of solutions depending on what you're complaining about. But there are a few principles that firms should follow.

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• When you tell a business that you're struggling to make ends meet, they should offer to give you some time to sort things out. Most businesses will usually give you one to two months. So it's not long, but enough to help you over the first hurdle.

• The business should not continue to apply interest and charges if it's clear that it's making the situation worse. If they do so, make a complaint through Resolver.

• Be prepared to give details of your financial situation – this is pretty standard. The business then has a range of options, from reduced payments to spreading the debt over a longer period.

It pays to be realistic. The debt isn't likely to be wiped off. But there are lots of potential solutions.

Things can get a bit complicated when it comes to mortgages. With interest rates heading up, there's been lots of predictions that more people will be forced into debt.

Actually, lots of people have moved to fixed-rate deals so won't be affected immediately by rate rises. But over the next few years, there will be an impact as we renew or take out new agreements.

Mortgages – and paying for them – are one of those subjects where people really do bury their heads in the sand. I totally get this.

It's harder to admit it if your home is becoming unaffordable. And a worryingly high number of people who get in to trouble with their repayments do so because they've gone into denial about mounting debts.

This can be a nightmare when it comes to helping people. The fact is if you speak up early – and take an honest and frank look at your finances – there are options here. From payment breaks to downsizing, you don't have to lose your home.

Some of the people with serious mortgage problems that I've spoken to got in to trouble because they put their faith in dodgy advice on the internet.

I can't emphasise this enough: all those stories about your mortgage not being enforceable or debts being wiped due to legal clause – they're all rubbish. The only way to turn around a mortgage debt is to admit it and ask for help.

If the lender doesn't treat you fairly, then Resolver can help. But be prepared for some tough decisions.

If your finances aren't going to pick up in the foreseeable future the answer might be to buy a cheaper home while you can.

Remember there are free organisations that can help you, like debt charity StepChange. So don't wait for the rules to change. Get help today.

If you've been treated unfairly over an outstanding debt, get in touch by emailing Find out more about your rights and make a complaint at

• James Walker is the founder of