Facing a Prison Sentence: The Financial Worries
For most law-abiding citizens, the financial implications of a prison sentence are a distant concern. However, for Danny, a 32-year-old from Stockport, this is a pressing reality. He is due in court next week, expecting a three-year sentence for Grievous Bodily Harm (GBH), with an anticipated serving time of 15 to 18 months.
While the prospect of incarceration is daunting, Danny's primary worry isn't about life behind bars. His mind is occupied with a more practical, yet equally stressful, problem: how to manage his finances and debts with no income for the foreseeable future.
The Financial Burden: Loans, Credit Cards, and Contracts
Danny's financial commitments are substantial. He has an outstanding loan of £2,500 and £2,000 in credit card debt, which he was repaying at a rate of £250 per month. This income stream will vanish once he is imprisoned.
Furthermore, he is locked into a two-year mobile phone contract that he can no longer afford. Smaller monthly outgoings for a gym membership and Netflix subscription also need addressing, even though he won't be using them.
His main concern is whether companies will aggressively pursue him for these unpaid debts during his sentence.
Expert Advice: Taking Proactive Steps
Sarah Davidson, a consumer champion for Metro, provided crucial advice. She emphasised that while the situation is unique, the principles of debt management apply to anyone facing a sudden loss of income, from redundancy to illness.
Yes, companies can and will chase unpaid debts, regardless of the reason for non-payment. The key is to act swiftly and communicate openly.
Sarah's step-by-step guide for Danny includes:
- Contact Your Bank Immediately: Be completely honest about your circumstances. Explain the expected duration of your sentence and discuss the possibility of appointing a family member to manage your account. You may need to confirm this in writing.
- Speak to Creditors: Call your loan and credit card providers. Explain the situation. Some may offer a payment holiday or reduce your monthly payments, though interest will continue to accrue. This can prevent the account from being passed to debt collectors.
- Cancel Non-Essential Subscriptions: Cancel your gym and streaming services immediately online or via their apps. For the gym, follow up with an email to confirm cancellation, but be prepared to pay until the end of any fixed term. Alternatively, ask about suspending your membership.
- Address the Phone Contract: Contact your provider. While you are typically liable for the full contract term, some companies may show flexibility given the extraordinary circumstances.
- Audit Your Bank Statements: Scrutinise your statements for any other recurring payments and cancel everything possible to avoid bounced payments and further fees.
Seeking Free and Confidential Support
Given the tight timeframe, Sarah strongly recommends contacting a free debt advice service before the sentence begins. These organisations can provide tailored support and help prepare a financial plan.
The following services offer free and confidential advice:
- StepChange Debt Charity (0800 138 1111)
- PayPlan (0800 280 2816)
- National Debtline (0808 808 4000)
- Citizens Advice (0800 144 8848)
- Debt Advice Foundation (0800 622 61 51)
- Turn2Us (0808 802 2000)
By taking these proactive steps, individuals in Danny's position can mitigate the financial fallout and focus on their rehabilitation, ensuring a more stable foundation upon their release.
