According to official government figures the current recession is seeing the fastest rising unemployment rate since the 1980s, so debt advice organisations are preparing for the increased demand for their help.
The Office For National Statistics figures show that the hardest hit have been those living in the West Midlands and people working in the finance and business service sectors.
Unemployment levels for 18-24 year olds have also risen by over 16 per cent, and it seems that men are suffering more than their female counterparts.
Job losses in the finance and business services sector have seen the steepest increases since 1978.
The Office For National Statistics figures also show that the current recession has hit the West Midlands hardest – as they have experienced high levels of redundancies along with large falls in job vacancies and high unemployment.
This means that there will be more households receiving lower incomes (or none at all), and will have reduced means to repay their unsecured balances and get out of debt. As a result, debt help organisations have needed to ensure they can cope with the increased demand for their debt advice services.
A spokesperson for Chiltern, The UK’s leading debt management provider commented: “We’ve experienced more people than ever who are calling us after being made redundant. Very few people are fortunate enough to have saved a cushion of savings to cope with losing their job, so any money they have is quickly swallowed up by paying bills, rent and credit card debts.
“The best thing to do if your household income drops, is to contact an impartial professional as soon as possible – rather than going further overdrawn – as this will only lead into even more problems when the credit eventually runs dry.”
Debt help organisations can help alleviate financial worries by offering free debt advice and suggest ways to budget finances better. In certain circumstances they can also recommend a number of professional debt solutions to help regain control of finances whilst still repaying debts.
Professional solutions include debt management plans (DMPs), Individual Voluntary Arrangements (IVAs), Trust Deeds and Consolidation Loans.
Debt management gathers multiple unsecured balances (such as personal loans, overdrafts and credit card debts etc) into one single monthly payment, which immediately makes finances simpler to manage. The repayments towards these unsecured balances are then negotiated to be rescheduled over a longer period, based on how much can realistically be afforded. Debt management offers a flexible way to manage finances, as payments can be altered to suit your changing financial circumstances.
An IVA and Trust Deed are similar to debt management as they gather multiple unsecured balances into a single payment. They differ from a debt management plan in that they are repaid over a fixed period of time. For IVAs this is typically over five years, and for Trust Deeds this is normally over a three year period. Trust Deeds are the equivalent to an IVA but only for people living in Scotland.
Reputable debt help organisations, who can offer free debt advice and provide a number of debt solutions, include Chiltern, The Debt People and Hamilton Locke.
For further information on debt management, IVAs and other debt solutions, or for immediate debt advice, please call the number at the top of this page. The call you make and debt advice you receive will be free.