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Balancing The Books When Jobless

Current research has highlighted that redundancy can result in large and lasting debt problems and these too can have an effect on future employment possibilities.

Unemployment, whether it be a temporary or long term can cause a household to enter into serious debt issues which may take years to fix. So most Debt Advisers are well versed in the area of joblessness and may be able to help.

In economic terms there are four main causes of job loss. A brief summary of these and the issues that relate to them is as follows:
1. Structural
The candidate does have the skills required by employers but they live in the incorrect region and are unable to move.
2. Technological
The persons seeking work do not have the abilities needed by potential employers. This becomes a training issue.
3. Frictional
That’s commonly short term unemployment – people who are between jobs.
4. The economy in recession
In a economic depression, people spend less to maintain their disposable income and rising levels of unemployment serves to reduce consumer spending even further. This results reduced numbers of job places.

So what can people do to reduce the consequences of debt when they’re out of work? One sensible move is to acquire insurance policy which will continue to pay your mortgage or rent if you are out of work due to redundancy, sickness or injury. This insurance will not necessarily tackle the whole issue, but it definitely becomes far more manageable. You can also buy insurance that will partially increase your income if you’re off work. Often these premiums will continue to pay out for 12 months (some will run for 2 years) giving you breathing space and time to find alternative employment. The cost is usually in the area of £42 to £68 pcm for each £1,000 of monthly income to be provided.

It’s a fact that almost 8% of all adults in British Isles, over 4.5M individuals, have seen the level of their debt rise over the last six months according ongoing research. While most of those individuals were comfortable with the rise, 56% had planned their rise in borrowings into their outgoings. But 43% of those questioned, nearly two million people, were totally ill-equipped for slipping deeper into debt .

If you are getting worried about the level of your debts, make a call to your lenders as soon as practical, because the earlier debts are dealt with, the easier they will be to handle. If, despite the negotiations with your creditors, you are still under financial pressure, you should seek impartial money counselling.

It’s a fact that many people are now volunteering into IVA’s but this has to be done through a licensed insolvency practitioner.

An Individual Voluntary Arrangements (IVA) is a legally binding agreement. It is a proposal to creditors to repay a portion 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 hampered by debt. Our advice is to allways seek professional help.

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