Rent Arrears Debt is considered a priority debt. If you are falling behind on rent payments to either your landlord or housing society, you may be in danger of falling into rent arrears.
What are rent arrears?
Rent arrears happen when a tenant falls behind on their rent payments to either a private landlord or housing association. Rent arrears are considered a priority debt and failure to keep up with your rent payments could see you losing your home or being evicted.
What causes rent arrears to happen?
Though there can be several reasons why tenants may begin to fall behind on their rent payments, typically the reason for rent arrears is unaffordability or rising cost of living.
In 2022, housing charity Shelter found that almost 2.5 million renters were either in rent arrears or struggling to keep up with increases in rent prices. They also found that 1 in 7 of those surveyed had their rents increased, with over 800,000 (of 3.5 million) having their rent rise by more than £100 a month.
It’s due to the rising cost of living that many UK renters are being pushed into unaffordability and falling into arrears with their rent payments.
Can I be evicted due to rent arrears?
Yes, if you fall behind on your rent payments and enter into arrears this could lead to you being evicted from your home. Landlords must give you due warning, two weeks’ notice, or seek an eviction notice (section 8) before being able to formally evict you.
Though it can vary, tenants generally have to be at least two months behind on their rent payments before eviction action should be taken by a landlord.
What should I do if I’m falling into rent arrears?
If you feel you are in danger of falling into rent arrears with your landlord, it’s important to be proactive. You should contact your landlord as soon as possible to explain your current situation.
If you explain your situation to your landlord, you may be able to enter a repayment plan with them. You should look to review your budget and work out exactly what you can afford to pay towards your rent arrears payments.
Once you have worked out what you can afford to repay to your landlord you should come to them with your proposed repayment plan.
It should be noted that landlords don’t have to accept your proposal and can choose to go forward with eviction if they wish. However, seeking an amicable resolution is often in both parties’ best interest and will be the better outcome for both landlord and tenant.
Can I get help to repay my rent arrears?
If you are struggling with your rent payments and feel you may need help to deal with rent arrears, it’s important to make sure you know all the help currently available.
First, it’s important to see what housing benefits you may be entitled to. You can check this by using a benefits calculator either through the Gov.UK site or through debt and poverty charity Turn2Us, using their free benefits calculator.
If you already receive benefits, it’s important to know that you are getting the right amount to cover your living situation by running a benefits check. If you wish to use your benefits to cover your rent arrears you can ask for part of your benefits to be paid to your rent arrears directly.
If you feel you are struggling with your debts or rent arrears payments and need time to financially recover, Breathing Space could be a short-term relief.
Breathing space protects you from further action from creditors by granting you legal protection from your debts for up to 60 days. During this time your creditors are unable to contact you for payment and this can allow a debtor to recover financially or work out a repayment method without fear of further action from their creditors.
It’s worth keeping in mind that Breathing Space can only be applied for by an authorised debt service provider.
You should also note that your debts will persist after the Breathing Space period and once your payment haven has lapsed your creditors will resume their attempts to receive payment for your debts.
Can I go to jail for rent arrears?
While this is a frequent concern when dealing with arrears and unpaid debts, luckily this is very unlikely and the potential for unpaid rent arrears to lead to prison time is almost zero.
There are only certain types of unpaid debts that can lead to prison time in extreme scenarios.
Debts that can result in prison time:
– Child Maintenance arrears (CSA)
– Criminal Fines
Debts that can’t result in prison time are:
– Mortgage/Rent Arrears
This means that the potential for jail time due to unpaid rent arrears would only be possible due to other factors (such as refusing to vacate your property or vandalism etc.) Courts will not seek jail time for rent arrears payments alone and for debts that can result in prison time this is considered a last resort.
Each type of debt comes with different repayment requirements and it’s important to understand how your debts work to find the solution that works for you.
What should I do if I have unaffordable rent arrears debts?
If you have fallen into arrears with your rent payments and are unable to afford your debts, it’s important to remember that help is still out there.
It’s normal to feel anxiety and hopelessness when dealing with unaffordable debt but there is help available to you and being proactive early can save you further distress and further debt in the future.
Speaking to a debt advisor is your best option for determining the steps you should take to get free from your debts. A debt advisor can determine your affordability by reviewing your finances and debts, ensuring that you have the best option for becoming debt-free.
This may involve being placed on a debt plan such as an Individual Voluntary Arrangement (IVA), Debt Management Plan (DMP) or Debt Relief Order (DRO) – a formal agreement between a debtor and their creditor to repay their debts at a more affordable rate.
What payment plans can I set up for rent arrears?
Ultimately, this will depend on your current financial circumstances, and this will be discussed with your debt advisor and creditors to find the solution that works best based on your finances. Debt repayment plans are specifically structured agreements to fit many different financial situations, meaning that whatever your situation there will be a solution, that works for you.
It’s important to keep in mind that there are risks associated with taking out a debt solution such as adverse effects to credit score, legal requirements and other financial implications that you should consider before making a decision to join a debt plan.
Some examples of debt plans include:
An IVA is a formal debt solution that consolidates all of your outstanding debts into one affordable monthly repayment. It is a legally binding debt repayment agreement that lasts over a set period (usually up to 6 years). Once you have reached the end of your repayment period, any outstanding debts are written off.
The equivalent to an IVA in Scotland is a Protected Trust Deed.
A Debt Relief Order is a debt solution designed for people with debts up to £30,000 with no viable means of repayment. During a Debt Relief Order you are given a 12-month grace period from your debts, after which you will either need to begin making payments towards your debts or if you are still unable to repay the amount, your debts will officially be written off.
A Debt Management Plan or DMP is an informal debt agreement that allows you to repay your outstanding debts at a more affordable rate.
By reviewing your current financial situation and what you can afford, a more manageable repayment rate will be created. This reduced monthly repayment amount will be proposed to each of your creditors and if accepted, you will continue to repay your debts at a more manageable rate.
If you feel a debt plan is the right option for you, you can learn more by speaking to a debt advisor.
For free debt advice from an authorised debt charity visit MoneyHelper
To speak to a MoneyPlus advisor you can learn more here.
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