Redundancy ~ Debt Managements and Consolidation

Written by Lizzy on Thursday 17 March 2011

During the recession, redundancy has played a major part in people?s struggles with repaying their debts. Many people have been made redundant as businesses struggled with the economic downturn, which has led to rather a sharp increase in unemployment.

Although redundancy cannot be prevented, the way that you deal with it can be addressed.

If you have been made redundant one of your first thoughts will relate to how you are going to cope. If you have a family and a mortgage, being made redundant can be a very stressful time. If you have been made redundant then one of the first things that you should find out is if you are entitled to any type of redundancy pay.

As you look for another job whilst out of work you need to make sure that you are receiving all of the benefits that you are entitled to such as;

Income supportWorking tax credits (if your partner is working)Job seekers allowance

You may also be eligible to receive help with your council tax and rent.

Once you know what your income will be once you are out of work you will then be in a better position to rearrange your finances.

If you are entitled to, and do get, a pay out then you may be able to use this to pay off all of your unsecured creditors. Depending on the amount that you get, you may either be able to do one of the following;

Pay all of your unsecured creditors in fullCome to a settlement agreement and pay a slightly reduced amount to clear the debtMake a lump sum offer to your creditors as a full and final settlement of your debts through an Individual Voluntary Arrangement (IVA).

It doesn?t matter what your situation is, if you have been made redundant and are struggling with debt then you should contact Payplan who will be able to assess your situation with you and one of our advisors will be able to assist you with a plan that is right for you. It may be a Debt Management Plan (DMP), IVA or we will help assist you in setting up your own informal arrangement with your creditors by pointing you in the right direction.

If you know someone who is struggling with debts then please get them to call Payplan on 0800 2802816.

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