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Managing debt

Managing debt

If you find yourself in financial difficulties the most important thing you can do is to seek advice and talk to those you owe money to. That way, together you can find the best way forward for all parties and resolve the situation sooner rather than later.

I'm in financial difficulty. What can I do?

At MBNA, we recognise the stress that debt can cause, so we've come up with a simple 3-step plan to help. And the sooner you start, the sooner you could get back on your feet.

We’re here to guide you through this process every step of the way, so if you need a free and confidential discussion just call 0800 028 0690 Monday - Thursday 9am - 8pm, Friday 9am - 5pm and Saturday 9am - 1pm.

Specialist support is also available for customers living with long term illness, or conditions which make dealing with debt especially difficult.
You can contact our award-winning specialist support team on: 0800 876 6891
Lines are open Monday to Friday, 9am-4:45pm.

1. Working it out

If you are in genuine financial difficulty, it's in all our interests to get it sorted out. The first step is to work out how much you spend each month on basic living costs. Don't include any debts at this stage, just all essential spending on things like food, rent or mortgage, electricity, water and gas bills. Cancelling non-essential things like gym membership or Satellite TV will ensure you have more money to pay off your debts sooner.

You will need to give us these details together with details of any money coming in each month. For example, any take home pay and any benefits you receive such as Job Seeker's allowance, Working Families Tax Credit and Child Benefit (your local Benefits Office will have this information).

2. How much do you owe?

You then need to put together a list of all debts you have. The list should include any credit or store cards, plus any loans or overdrafts. Remember to provide the names of each company you owe money to, plus an up-to-date figure of what's left to pay.

Once you have all this information, you can print, complete and return our Income and Expenditure form to:
Customer Assistance
PO BOX 30
CHESTER
CH4 9FD

Alternatively simply call us on 0800 028 0690 to discuss the options available to you. Lines are open Monday to Thursday 9am-8pm, Friday 9am-6pm and Saturday 9am-1pm. Our Debt Management service is completely free and confidential and is here to try and help you pay off your debts in a realistic and sensible time.

3. A repayment that's right for you

Everyone's circumstances are different, so we'll aim to work out a payment plan that's right for you. Once we have received your completed Income and Expenditure form we will take the most appropriate action for your circumstances. If that means taking steps such as putting your account on a reduced payment plan, that information could be visible on your credit file and viewed by other creditors, which may, in turn, affect your ability to obtain future credit.

If you would like to discuss how this may affect you, please contact us on 0800 028 0690 before you send your Income and Expenditure details to us.

You should also check to see if you have insurance (such as Payment Protection Insurance) and, if you do, check your policy to see if you can make a claim.

 

How can I cut spending?

The first step is to create a budget and stick to it. Most bills are paid monthly so budgeting monthly is often wise too. To create a budget, work out how much you spend a month and compare it to how much you earn a month. The goal is to earn more than you spend and look for ways to reduce or eliminate altogether non-essential spending. Here are a few tips:

  • Set up Direct Debits. This way you won’t forget to make any regular payments, and you’ll have a clearer picture of what you have left to spend each month.
  • Plan your shopping list and stick to it.
  • Don’t make large purchases spontaneously.
  • Review your service providers. Can you reduce your household bills or car insurance, for instance? Check out a price comparison website and see if you can get the same services for less than you’re currently paying.
  • Budget for ad hoc expenses. Set aside money for things like insurance payments, holidays or charity donations that come round once in a while.
  • Save for the unexpected – for example, car or home repair bills, healthcare and other emergencies. It’s worth considering additional insurance protection for you and your family.

 

Are there any resources available to help me reduce my spending?

There are several price comparison websites that can help you save money. They offer a free comparison service on household bills (gas, electricity, home and mobile phone, broadband and mortgage) quickly, easily and without hassle.

 

How can I reduce what I already owe?

Once you have a monthly budget and start reducing your current spending, contact your lenders and creditors. There are lots of ways we can help you tackle your debts.

Impartial websites such as moneyadviceservice.org.uk/yourmoney/ or Stepchange Debt Charity offer valuable information and advice on saving money and tackling debt.
Please note: The contents of these pages are not intended to be taken as financial advice or recommendation made by MBNA. You should seek independent financial advice if unsure about your financial needs.

 

Could a debt management company help me?

There are several debt management companies operating in the UK who could help you manage your debts and negotiate with your creditors to try to reduce your overall payments, making a difficult financial situation easier to control.

They assess what you can realistically repay each month and create a debt management plan for you. They'll also contact your creditors to negotiate a longer repayment term or a lower repayment amount.

A debt management company will manage your repayments from a monthly payment you make to them - you'll receive regular progress updates and, in most cases, you'll no longer be contacted by your creditors.

Your circumstances will also be monitored to ensure your plan stays on track.

Most debt management companies charge service fees. However, impartial money and debt management advice is also available free of charge from many not-for-profit organisations.

Important: Debt management is not suitable for everyone (plans are subject to status - terms & conditions apply). Signing up for a debt management plan will affect your ability to obtain credit in the future.

 

Credit Today Awards 2014

We were the winner for the following Credit Today Award:

  • Consumer Credit Team of the Year - Financial Services

We were shortlisted for the following Credit Today Awards:

  • Consumer Collector of the Year
  • Credit Card Provider of the Year
  • Consumer Credit Team of the Year - Financial Services

 

ICM British Credit Awards 2014

We were highly commended for the following ICM British Credit Award:

  • In-house Collections Team of the Year - Consumer

 

Other resources

As well as downloading our free Dealing with Debt leaflet that contains helpful information on tackling debt, you could contact the Money Advice Service, which is an organisation set up by the government to offer free information and unbiased advice.

Money Advice Service
moneyadviceservice.org.uk
Call: 0300 500 5000 or complete the "Contact Me" form to arrange a call-back.

Alternatively, you may wish to contact one of the following organisations for assistance:

Stepchange Debt Charity
stepchange.org
Call free: 0800 138 1111

National Debtline
nationaldebtline.co.uk
Call free: 0808 808 4000

Citizens Advice Bureau
www.citizensadvice.org.uk

Reduce bills
Use Simply Switch to help you save money on regular household bills.