Research by StepChange Debt Charity (Statistics Yearbook – Personal Debt 2013) suggests that 87% of people who find themselves in unmanageable debt, are in the situation due to circumstances beyond their control.
Debbie is a 27 year old recently divorced mother of two. As part of the settlement, it was agreed that she and her children would continue to live in the marital home.
Before the breakdown of her marriage, her husband paid for the utility and credit card debts as well as shopping and mobile phones, while she covered the interest-only mortgage.
Despite being in full-time employment and receiving child maintenance, Debbie soon found it hard to meet all of her financial commitments. With no savings, she was forced to take out several loans which eventually plunged her further into debt.
Finally, when things became unsustainable, she sought out some help. By contacting StepChange, she was able to discuss her problems and get her life back on track.
If you have recently been, or are going through a divorce, here are some things to consider:
Peter lost his job as a result of the financial crisis. At the time he owed money on several credit cards and without the cushion of redundancy or any savings to call upon, he quickly fell behind on his mortgage and utility bills as well.
Before long, he had missed several repayments and, unable to find a new job, he didn't know how he was going to get back on track.
By contacting the Money Advice Service, he was able to seek free, independent financial advice enabling him to set up an affordable repayment plan. He agreed to make payments until his credit card, mortgage and utility bills were no longer in arrears and he is now working towards improving his credit rating and finding a new job.
If you have lost your job, faced redundancy or lost income, you should consider the following:
Richard and Suzanne were both recently retired and lived together in the same house they bought when they were first married 43 years ago.
Despite making plans for the future, Suzanne's world was turned upside down when Richard unexpectedly passed away. It was only after his death, that she realised his insurance had expired and therefore, she would have to pay for the funeral herself.
Without the sufficient funds available and not wanting to take any equity out of her home, Suzanne turned to a credit provider to pay for the funeral and cover some of the loan repayments.
By the time Suzanne had contacted a charity, she was £4,250 in arrears. She informed her creditors and found that the most affordable way forward was through a Debt Management Plan (DMP).
If you have suffered a bereavement, here are some steps to help you at this time:
For Alex, life as a single 24 year old was great. He was a successful self-employed painter and decorator and after taking care of his bills and rent, he had enough money to go out almost every night of the week.
Before long, however, his drinking started to affect his work, and with his standards slipping, clients stopped calling him back. Initially he took out extra credit cards and small loans to help with his debts, but with his drinking spiralling out of control, he was unable to pay them back.
He even offered to do cash in hand jobs for his friends and family only to spend the deposits for materials on his addiction.
Finally, along with support from his friends and family, he admitted he had a problem and sought out help for both his addiction and debts. By contacting the Citizens Advice Bureau, he was able make an affordable repayment plan for his debts and signed up to Addiction for alcohol counselling.
If you would like more information on addiction, how it can lead to debt and finding a solution, please contact:
Sarah is happily married to Rob and they have a little girl together. However, that hasn't always been the case. Sarah had always been a strong and independent woman, but after giving birth that all changed. With her husband regularly working away from home, she struggled with their new born baby and as a result, suffered from depression.
Not knowing what to do, Sarah started buying things to help her feel better. At first it was only a few little bits every now and then, but it quickly became an expensive habit. Having maxed out her store and credit cards, and not wanting to worry her husband, she applied for a loan.
However, rather than paying off her debts, she continued with her spending. Eventually, when her debts were over £3,500 she confided in a friend what she had been doing. By taking this first step and facing her problems, she found the strength to tell her husband about her depression and debts. Together, they were able to seek the help she needed to tackle them both.
Debt and mental health problems can be caused by a number of things such as redundancy, bereavement or relationship breakdown. You are not alone and there is light at the end of the tunnel. Below are some websites that may be of some help: