Arrears and dealing with debt
With credit cards, store cards, overdrafts and bank loans readily available, it’s easy to slip into debt. Most housing problems start because of financial difficulties, so if you do find yourself getting into debt, take action as soon as possible.
Shelter Cymru provides free, independent, confidential, specialist debt advice across Wales. Click here for contact details.
Are you in debt?
Tell-tale signs that your debts could be getting out of hand include:
- missing more than one repayment on a store card or credit card
- refusing to open bills or bank statements because you’re afraid of what they’ll say
- borrowing money from friends and family that you know you’ll never pay back
- borrowing on one credit card or bank account to pay off another one
- paying off the interest on your loans yet never reducing the loans themselves.
What you can do about it?
If you do get into debt there are three important things to remember:
- Don’t bury your head in the sand. Hiding bills and bank statements won’t make them go away.
- However much your debts pile up, your rent or mortgage payments should always be top priority. If you don’t keep up with your rent or mortgage, you could end up homeless.
- Help is at hand. See below for details.
Where you can get help
If you’re worried about your debts, you can talk in confidence to one of our specialist debt advisers on 0345 075 5005.
Debt services are also available from other agencies. Click here for some useful web links.
If you are struggling to pay your rent, or are at risk of losing your home because you owe your landlord rent, you need to take action.
Don’t ignore the problem or you could be evicted. Bear in mind that the rules about eviction depend on the type of tenancy you have, and that mortgage arrears are dealt with in a different way.
Checking the amount of the arrears
It’s important to check with your landlord how much they think you owe, in case you disagree. It might also be important in court if your landlord tries to evict you – some tenants can only be evicted if the arrears have reached a certain level.
How can I find out how much I owe?
Ask your landlord for a statement of your rent account from the date when the rent arrears are supposed to have begun.
Rent usually only covers the amount your landlord charges for living in the property, but sometimes it includes other things such as bills and service charges. Ask your landlord how much of what you owe is rent, and how much is for other services. Your tenancy agreement may also outline what ‘rent’ includes and what it does not include.
What if I’m claiming housing benefit or universal credit housing costs?
If you claim housing benefit or universal credit then you are still personally responsible for making sure your rent is paid, and for any arrears you have. This is the case even if there are delays, or if your payments are going directly to your landlord.
What if I live in shared accommodation?
If your name is the only name on the tenancy agreement, then you are responsible for paying the whole of the rent. If you have a joint tenancy agreement, then each tenant is equally liable for paying the rent. If one joint tenant does not pay, then the other tenants are responsible for paying her/his share as well as their own.
Arrears due to Housing Benefit
If you have rent arrears because of problems with your housing benefit claim, there are a number of things you may be able to do to stop the situation getting worse:
Has your claim been filled in properly?
Your housing benefit claim might be delayed if you don’t provide all the information the council asks for. You should sign and date all your forms and provide all the information the council asks for as soon as possible, and no later than four weeks after they ask. If you are having problems completing the form, an adviser in your area can help you. Use our checklist to make sure you have given in everything they need.
Has the council lost your form?
You may also have problems with housing benefit payments if the council loses your application form. If possible, it’s always best to keep a photocopy of your forms, and take them to the housing benefit office in person. Always ask for a receipt, so you can prove that you handed the form in on a particular day if your form gets lost.
No payment after 14 days?
If you rent from a private landlord or a housing association, once you have made a claim, the council normally has to make an interim payment of housing benefit within 14 days. This is sometimes called a payment on account.
An interim payment will allow you to pay off some of the arrears and may stop your landlord from trying to evict you. If you are eligible for an interim payment it should be paid automatically. Contact your council if you have not received anything after 14 days.
What if my housing benefit doesn’t cover all of the rent?
If your housing benefit doesn’t cover all your rent because the council thinks your rent is unreasonably high, or the property is too large for your household, you may be able to challenge the decision. You should act quickly as there are time limits to bring any challenge.
Can I get extra help with my rent payments?
If you can’t afford to pay the difference between your rent and your housing benefit, it may be possible for you to apply for an extra payment from the council. This is called a discretionary housing payment (or DHP). The council will decide whether you should get one based on your particular circumstances.
Is your claim up to date?
If you already get housing benefit, then the council will usually send you a renewal form at regular intervals. It is very important that you complete the renewal form and send it back in time, with all the information the council is asking for. If you don’t do this, then your housing benefit could stop.
Have your circumstances changed?
It is also important that you tell the council about any change of circumstances in your situation, such as a change in your income, or someone moving in with you. If you don’t update your claim, you could miss out on the extra housing benefit you might be entitled to, or could get paid too much, which you would then have to pay back.
What can I do if I’m facing eviction?
If your landlord is taking you to court because of arrears caused by housing benefit problems, get advice as soon as you can. It may be possible to persuade the council to sort out your claim so you can pay off some or all of your arrears before the hearing but you will probably need help.
If you are a housing association tenant, or a secure council tenant, your landlord should take certain steps before starting any eviction proceedings. This includes helping you with any housing benefit problems. Take a look at the steps they should be taking here:
You can find more details about eviction for rent arrears below.
Negotiating over arrears
Should I tell my landlord about the arrears?
It is always a good idea to tell your landlord if you are having trouble paying the rent. Your landlord will notice that you haven’t paid and is more likely to take action if you ignore the problem. Telling your landlord and offering a practical solution may prevent her/him from trying to evict you, as it shows that you are making an effort to deal with the situation.
Can I make an agreement to pay it off over time?
It may be possible to come to an agreement with your landlord to pay a certain amount each week or month off the arrears you have built up. If you decide to do this, then make sure you agree on an amount you can realistically afford. It is better to make small regular payments than to miss payments because you can’t afford it that week/month.
Whatever you agree with your landlord, get it confirmed in writing or make a note of the date and time of the conversation for your records.
What if my landlord won’t take the money?
If your landlord doesn’t want you to pay back the arrears, but insists you have to leave, get advice. You may still be able to stay. The rights you have will depend on the type of tenancy you have.
If your landlord refuses to take your rent, you should put all the money aside (in a separate bank account if possible) and don’t use it for anything else. Write to your landlord confirming that you are willing to pay off the arrears. Keep a copy of your letter. Ideally, send this letter by recorded delivery or by email, and keep a receipt. If your landlord takes you to court, you can then prove that you were willing to pay them back and that you have the money available. The court may decide that it is not reasonable to evict you.
Reducing rent arrears
If you are behind with the rent, it’s important to look into all your options before you decide what to do. Debts relating to your home should always be your top financial priority.
Where should I start?
Try to pay as much as possible towards your arrears on a regular basis. This will prevent your arrears from rising too sharply and will show your landlord that you are making an effort to deal with the problem. It’s worth doing this even if you can only afford to pay a small amount off each week.
If you are a council or housing association tenant, and are on Income Support, income-based Jobseekers Allowance, or income related Employment Support Allowance, your landlord can ask for an amount to be taken out of those benefits each week towards paying back the arrears. An amount will usually be taken out directly, before you get your benefits, if your rent arrears are sufficiently high. It will mean you have less money to spend, but will help to ensure you don’t lose your home.
Can I withhold rent because of repair problems?
If you are thinking of withholding your rent because your landlord hasn’t carried out repairs, talk to an adviser before you stop paying. You will need to follow a special legal procedure. If you simply stop paying the rent without following the correct procedure, you could be evicted for arrears. For more information visit our tenants doing repairs page.
What if I’ve got other bills to pay?
If you decide to pay other bills or debts instead of your rent, it could make things worse. Paying your rent should always be your number one priority because if you don’t pay it, you could be evicted or taken to court. Although catalogue and credit card payments are important, they shouldn’t come first. You won’t lose your home if you delay payment.
It’s also important to pay your utility bills (such as your gas and electricity bills) and council tax before you pay credit card or other bills. If your gas or electricity gets cut off, you will have to pay to have them reconnected. If you don’t pay your council tax, you could end up in court, and may have to pay court fees on top of the debt.
It’s often possible to negotiate with your creditors to reduce the payments you are making towards bills, credit cards, or loans. You should ask your utility company, credit card company or lender whether it is possible to pay a smaller amount each month, at least until you have paid off your arrears. Contact our debt advice service for more help.
How can getting advice help me?
A specialist debt adviser can go through your finances with you to see if you can re-organise your money to enable you to repay the rent arrears. It may be possible for you to stop the arrears building up any further by reducing your spending or increase your income so that you can afford to pay your rent.
It may also be possible to reduce payments on your other debts, or if you have a job, it may be possible to work more hours or ask your employer or trade union for a loan. You might also be entitled to claim benefits.
If you’re struggling to manage your money and have got into debt, talk to one of our specialist debt advisers.
Eviction for rent arrears
If you are getting behind with your rent, or think that you might not be able to pay it in the future, it’s important to act quickly to avoid the risk of losing your home. Your landlord could try to evict you for rent arrears.
The sooner you get advice the better. It is often possible to sort things out. Even if your landlord takes you to court, there is often a solution. An adviser can explain your options and help you decide what to do. The council may also be able to help prevent you from losing your home, so contact your local council if your landlord has started court action to evict you.
Which tenants are most at risk of eviction?
Different tenants have different rights when it comes to eviction for rent arrears. For example:
- if you are an introductory council tenant, the judge has no choice but to evict you if the case goes to court. You must sort out any problems with your housing benefit claim before the hearing or you will lose your home.
- if you are a secure tenant, the judge may decide that it is not reasonable to evict you if housing benefit delays caused your arrears. But it’s still important to get advice, especially if the council is also using any other grounds.
- if you are an assured tenant (which includes most housing association tenants), the judge usually has to evict you if you owe eight weeks’ rent or more at the date of any court hearing. If you can get a housing benefit payment to reduce your arrears to less than eight weeks’ rent, you will have a better chance of keeping your home.
- if you have an assured shorthold tenancy (which includes most private tenants and some housing association ‘starter’ tenants), your landlord can try to evict you because of the arrears or simply because your tenancy has come to an end. It is usually very easy for a landlord to evict an assured shorthold tenant so it is important to try and keep your rent payments up.
If you are a private tenants and not sure what sort of tenancy you have, click here to check.
What’s the worst that could happen?
If you don’t pay off your rent arrears and end up being evicted, you may find it difficult to find a new place to live. Your local council may not give you much help if you have been evicted because of rent arrears and some councils may say you can’t go on the waiting list for a permanent home. Many private landlords ask for a reference from your last landlord, and may not rent to you if you’ve been evicted for rent arrears.
What if I just leave?
If you decide to leave your home, then it’s important to tell your landlord that you are leaving, and give her/him the correct written notice, to avoid increasing any arrears that you currently have.
If you simply move out, you will still need to end the tenancy by giving the correct notice, and may still be responsible for paying the rent until the end of the notice period. For most tenancies, you will have to give at least four weeks’ notice and the notice should expire on the first or last day of a rent period. If you have a fixed term tenancy, you may need to give more notice, and will often be responsible for paying the rent until the end of the fixed term.
Check your tenancy agreement, or email our expert advice team if you are not sure how much notice you need to give. If you don’t pay this rent, then your landlord can usually take you to court for the amount that you owe. S/he can do this even after you have left the property.