Lost Your Job? Handling The Debt
Current studies have shown that redundancy can result in sizable and lasting debt issues and these too can have an influence on future employment possibilities.
Unemployment, whether it be a short or long term can cause a family to enter into serious debt problems which could take years to fix. So most Debt Consultants are well versed in the field of joblessness and will be able to help.
In economic terms there are four main causes of employment loss. A brief summary of these and the issues that relate to them is as follows:
1. Technological
The people seeking employment do not have the abilities needed by potential employers. This becomes a training issue.
2. Structural
The individuals does have the proficiencies needed by employers but they live in the incorrect place and are not able to move.
3. The economy in recession
In a economic depression, individuals spend less to preserve their disposable income and increasing levels of unemployment serves to lower consumer spending even further. This results in fewer and fewer job vacancies.
4. Frictional
This is usually short term unemployment - people who are between jobs.
So what can households do to reduce the repercussions of debt when they’re unemployed One sensible move is to purchase insurance protection which will continue to pay your rent or mortgage if you are out of work due to sickness, injury or redundancy. This insurance will not necessarily tackle the whole problem, but it certainly becomes much more manageable. You can also buy insurance that will partially increase your income if you’re off work. Often these policies will continue to pay out for 12 months (some will run for 2 years) giving you breathing space and time to find alternative income. The cost is typically in the region of £41 to £72 per month for each £1,000 of monthly income to be provided.
It’s a fact that almost 9% of all adults in Britain, over 4.5M individuals, have seen the amount of their debt increase over the last six months according ongoing research. While most of those people were comfortable with the rise, 58% had budgeted their rise in borrowings into their outgoings. But 42% of those surveyed, nearly 2M people, were totally unprepared for slipping deeper into debt .
If you are getting worried about the level of your debts, make a call to your lenders as expediently as practical, because the sooner debts are handled, the simpler they will be to handle. If, despite the negotiations with your lenders, you are still under financial pressure, you should enquire into impartial money counselling.
It’s a certainty that many people are now entering into Individual Voluntary Arrangements (IVA) but this needs to be done by a licensed insolvency practitioner.
An Individual Voluntary Arrangements (IVA) is a legally binding contract. It is a proposal to creditors to pay a proportion of the debt in monthly instalments over a fixed period of time, usually 5yrs. So long as the majority of your unsecured creditors agree to the IVA, it becomes binding to all your creditors. An IVA is but one of many alternatives that will help those excessively burdened by debt. Our advice is to allways get professional assistance.