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Managing your money as a musician can be a challenge. Different sources of income and streams of work can be difficult to keep track off, but there are steps you can take if you hit a rough patch or get into debt. Our charity partner StepChange, a leading debt advice charity, can offer you free and impartial debt advice. Find out more about how they can help you if you're struggling with your finances or are in debt.
Below are some common queries and areas where they can offer support, or you can contact them via livechat, phone or online depending on your circumstances.
Priority debts are the ones you should pay first, because the consequences of not paying them are more serious. Priority debts include rent, mortgages, utilities and council tax.
If you fall behind with your rent or mortgage, you’re at risk of eviction or repossession, so it’s important to keep up with these payments if possible. Contact your lender or landlord if you’re struggling to pay the full amount and ask them to agree to a temporary payment arrangement.
If you fall behind with utility bills, such as electricity and gas, you’re at risk of your supply being disconnected. If you’re struggling to pay, you can contact your supplier – many have schemes to support people on low incomes.
This guide provides more information on how to get help with utility bills.
If you’re struggling to cover your priority bills, get debt help as soon as possible. StepChange will look at your income, spending and debts, and provide you with advice tailored to your circumstances. To help you get started, read their guide on which debts to pay first.
If you can’t afford the minimum payments on your credit cards, or it feels like the balance on your cards are rising every month, this could be an early sign that you’re in financial difficulty.
Make a budget to work out how much money you have left over each month after paying your usual household bills. Then see if you can make savings in any areas. To do this, add together all your monthly income including wages, benefits, pensions etc. Then make a list of everything you spend each month by looking at recent bank statements and shopping bills. Find out more about how to make a budget.
If you’re able to get credit from another credit card provider, who is offering lower charges or interest rates than you’re currently paying, this could be an option, in the short-term at least. You can find possible credit card providers by using price comparison websites, and there are lots of useful tips from the Money Saving Expert. Make sure you look out for any hidden charges when switching credit products.
StepChange will look at your income, spending and debts and provide you with free advice tailored to your circumstances. Maybe you can make an arrangement to repay your debt over a longer period or look at insolvency options, such as an individual voluntary arrangement, to write off your debt. It all depends on your situation. Read about different debt solutions and see their guide containing more information on credit card debts.
If you don’t deal with your arrears, your lender, landlord or letting agency could take steps to evict you or repossess your home – but you do have the chance to avoid this happening.
Gather details of your income, spending and debts to complete an income and expenditure form. Use this to work out how much money you have left over each month after paying your usual household bills. Then see if you can make savings in any areas.
How to fill in an income and expenditure form.
Contact your mortgage provider or landlord and tell them you’d like to make a new payment arrangement. Try and get in touch with them sooner rather than later and send them a copy of your budget to show that you’re offering to pay the most you can manage. If they agree to a new payment arrangement, try and keep to this.
StepChange can help you work out what’s affordable, and what’s the best way of dealing with your rent arrears and any other debts you may have. They will refer you to a specialist organisation if you’re at risk of losing your home. They have also produced a guide, which contains more information on how to deal with mortgage or rent arrears.
Being made redundant can have a big impact on your finances. If you’re worried about not being able to keep up-to-date with important payments, or if you’ve already missed some payments, follow these three steps to get the help you need. Remember, as an ISM member you can also get legal support with your redundancy from the ISM legal team.
If you can’t get back to work straight away, you can look at what help you’re entitled to in terms of benefits. Try and do this as soon as possible so you’re not left short while waiting for claims to be processed.
You may be able to get some money towards your housing costs as well as something to live on. Try this free benefits calculator for further assistance.
People are often scared to admit that they are struggling to pay what they owe, but if you tell your creditors many will give you some breathing space while you get your finances in order. They may offer options such as freezing your interest payments and charges, or by agreeing to a payment holiday.
Use these sample letters from StepChange to contact your creditors.
Get in touch with StepChange for free debt advice. List your income, spending and debts for personalised advice and solutions. They have also produced a guide, which contains more information on dealing with debts and redundancy.
If you’re being chased for money, the first step is to know your rights.
Depending on the type of debt, the person you owe money to will have different powers to collect it. Only bailiffs and sheriff officers have the right to enter your home and seize goods, in specific circumstances, and there are rules they must follow.
Find out the difference between bailiffs and debt collectors.
Make a budget by looking at your income, spending and debts to see what’s affordable. Show this budget to the company you owe money to, or to the company collecting on their behalf, to prove you’re paying back what you can afford.
This guide to making a budget could be useful when preparing your own budget, and if your income fluctuates, this self-employed income calculator should help to ascertain what your actual income is.
If you’ve got multiple debts that you’re being chased for, or if there isn’t much money left over at the end of the month after deducting your essential living costs, contact StepChange for debt advice tailored to your individual circumstances. For guidance on where you stand if you are contacted by a debt collector, read StepChanges's guide on how to deal with debt collectors.
It’s important to get free and impartial debt advice before going ahead with a solution to make sure it’s the right one for your circumstances.
It’s likely you’re not aware of all the different options. Maybe you’ve seen adverts about writing off debts with an individual voluntary arrangement (IVA), or heard about debt relief orders, but these are not right for everyone. There are also repayment solutions that are less well known to take into consideration.
The first step is always to look at your income, spending and debts using an income and expenditure form. Then you can see how much money you have left over each month after your ‘priority bills’ (housing, utilities, council tax etc.) have been paid.
The next step is to consider your options and the repayment solutions that are open to you; here we list some of these options.
Debt management plan (DMP)
Make a single monthly payment through a debt management company. This is based on what you can afford and will be shared among your creditors. Many will freeze interest and charges. This is applicable throughout the UK.
Debt Arrangement Scheme (DAS)
Apply for a debt payment plan through DAS: Similar to a DMP, but a legally-binding arrangement with fixed payment terms arranged by approved money advisors. This is only applicable in Scotland.
Individual voluntary arrangement (IVA)
A form of insolvency. Make agreed payments to your debts, usually for five or six years, and, at the end, any unsecured debts are written off. In Scotland, the Protected Trust Deed is a similar solution.
A form of insolvency. Your debts are written off. Any income or assets you have may be taken to pay off some of your debt. Sequestration is the Scottish equivalent.
Debt relief order (DRO)
Apply through an approved organisation and, if you qualify and your financial situation hasn’t changed after 12 months, all the debts you included in your application will be written off. This is applicable in England, Wales, N. Ireland only.
If you’ve received a lump sum of money, you can use this to offer a 'full and final settlement'. Creditors are more likely to agree if it would otherwise take you a long time to repay them. This is applicable throughout the UK.
Pay off debts by combining them with a consolidation loan or a new credit card. Loans may be secured against your home and the interest rates may be high if you’re already in debt. This is applicable throughout the UK.
There are different risks and benefits associated with each solution. You need to be sure you’re fully aware of them and how they can affect you. For example, your ability to get future credit, such as loans or mortgages, can be affected if your credit history shows you were on a debt solution.
Be wary of adverts for ‘government debt solutions’ and make sure the advice you’re getting is free and impartial.
Find out more about the benefits and risks of different debt solutionsby reading the guides by StepChange.
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