Debt from loss of work

The financial effects of involuntary job loss

This new section of the site will examine the problems faced when the public suffer debt from loss of work or experience the financial effects of an involuntary job loss. Workers who are in debt because of unemployment, ill health, stress are welcome to utilise the services of The UK Insolvency Debt Advice Service. If you are in debt we may be able to help you. The service provides a range of money advice services to the public including debt advice, financial help, a 24 hour helpline, advising and housing support to help the public get debt free (subject to terms and conditions).

The UK Insolvency Debt Advice Service is an established advice provider of debt from work loss related issues in the UK. Our ongoing research and statistics show that work loss can result in large and lasting debt problem that can have an effect on future work probabilities. Work Loss, whether it is a short or long term problem can cause a household or family enter into serious debt problems which may take years to solve. The advisers have much experience in the area of unemployment and work loss and are here to help.

The UK Insolvency Debt Advice Service is a national telephone helpline for people with debt problems in England, Scotland and Wales. The free phone service is confidential and non-judgmental. Please call 0800 074 6918 for advice on getting debt free (subject to terms and conditions).

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There are four main reasons for work loss:

1. Cyclical
   People are not buying enough British goods and services to employ the available workforce.
2. Technological
   The people seeking work do not have the skills wanted by potential employers.
3. Structural
   The unemployed have the skills required by employers but they live in the wrong place and are not able to move.
4. Frictional
   Short term umemployement: people who are between jobs.

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What can clients do to reduce the effects of debt from work loss?

Mortgage and rent insurance is a great way to protect you from the worries in life. Mortgage Payment Protection and rent Insurance is designed to keep you from getting into debt or missing the mortgage payments due to unemployment, work loss or illness. This insurance is particularly important to protect yourself from getting into constant increasing debt. In circumstances where you feel you will not be able to pay the mortgage or rent due to reasons like unemployment or work loss because of ill health or old age etc, having the Mortgage Payment Protection or rent Insurance or mortgage and rent insurance really helps. Money Advice Direct understand the reasons why debt can be a direct result of being unemployed or clients being out of work.

Almost 10% of all adults in the UK over four and a half million individuals, have seen their debt levels rise over the last six months according to The UK Insolvency Debt Advice Service.

The UK Insolvency Debt Advice Service operates an established confidential and non-judgemental advice resource for families, individuals and small businesses in serious debt.

While most individuals are comfortable with the increase, 57% had factored the rise in borrowings into their outgoings, 41% of those surveyed, amounting to nearly two million adults, were unprepared for slipping deeper into the red.

Loss is the key cause of individuals' running into debt problems and the research reveals that the ability to keep personal finances in order is usually lost because of unexpected life changing events, such as loss of earnings. Somewhat surprisingly, the findings show home and education related expenditure also high up on the list.

While the majority of individuals feel they have their borrowings under control, nearly two million individuals admit they were taken by surprise when their debts increased. It is vital that these borrowers don't let the situation become problematic by burying their heads in the sand. If they do get concerned about their debts they should get in touch with their lenders at the earliest opportunity, because the earlier debts are dealt with, the easier debts are dealt with.

For those people under financial pressure, free and ready access to sources of impartial money advice is crucial. Many people are in fact choosing to enter into Individual Voluntary Arrangements (IVAs). An IVA is a legally binding agreement, a proposal to creditors to repay a percentage of the debt in a monthly payment over a fixed period of time, usually five years.

If you are in debt, The UK Insolvency Debt Advice Service will do its best to assist you. The public can contact Money Advice Direct by calling 0800 074 6918. The service provides assistance to all types of workers and their dependants have problems including debt, unemployment, work loss, bereavement, ill health or disability, stress, family break ups, redundancy.

When people fear the consequences of bankruptcy to their homes, jobs and livelihoods, it is vital that they are aware there is an alternative. With credit easily available, managing debt becomes even more important. When debts become unmanageable, the longer it takes to seek help, the more difficult the problem becomes. For further information call 0800 074 6918 or visit www.insolvencyhelpline.co.uk.

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