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Dealing with debt

After what we’ve been through it’s OK to feel differently, and as we enter a ‘new normal’ it is more important than ever to look after our physical and mental wellbeing.

This week, Head of the Isle of Man’s Office of Fair Trading, John Peet, talks about the financial pressures many are facing and the help on offer.

For some, difficult personal circumstances that might normally be manageable, have become more challenging in recent months. The Isle of Man Office of Fair Trading operates a confidential Debt Counselling Service that can help.

It seeks to assist those experiencing problems with their finances and in making payments to their creditors. In the current climate, with the Covid-19 pandemic impacting so many lives and livelihoods, it may be helpful to know that this service exists.

Don’t drown in debt

It does not provide direct financial help, although it can direct individuals to others that are known to assist. The service seeks to provide the self-help tools necessary to let you take control of your finances and hopefully see a way out of crisis.

When a borrower is experiencing difficulties the service seeks, wherever possible, to negotiate reasonable repayment plans, which reflect the circumstances of the individual borrower, these are based on an assessment of affordability by taking into account the borrower's income and other financial commitments.

The way to repay

Our office uses the Standard Financial Statement (SFS) which is a standardised budgeting format, used widely in the UK, as it is sponsored by the British Bankers Association, the Finance and Leasing Association and the Money Advice Trust. The members of these organisations have agreed to accept SFS repayment proposals providing they are within pre-agreed levels of discretionary expenditure known as trigger levels. This generally helps to avoid delays in the negotiation process.

The financial statement is prepared by first reviewing the clients’ expenditure and priority creditors. A priority debt is defined as one where non-payment carries a penalty such as being imprisoned, losing a home or losing essential goods or services, for example, mortgage/rent, utilities, fines or taxes. We would ask you to be as honest with us as possible so that the statement we create is an accurate one.

All other outstanding debts are classed as non-priority. This does not mean that we encourage our clients that these debts are not important. Most clients approach us because they are having difficulty in meeting the repayments on their borrowing and we help them to work out a repayment figure to their non-priority creditors that can be sustained whilst making them fully aware of the action that can be taken should the repayment amount that is offered not be acceptable.

Where there is more than one creditor the repayments are calculated on a pro rata basis unless the level of surplus income is insufficient it is impractical to do so. We also encourage clients to make the payment offered rather than no payment at all. Making payments is the responsibility of the clients and not the Debt Counselling Service.  We do not handle any money.

We have produced a booklet that explains the process and details the self-help tools that we provide. 

Once you have read its contents, if you feel that we can assist you further then please do not hesitate to contact the service. We can arrange a meeting with our advisors at different locations around the Island or at our base in St Johns.

For further help and to make an appointment contact the: Debt Counselling Service, Office of Fair Trading. Call +44 1624 686510 or email