Around ninety per cent of young adults said they feared debt problems, if they were to lose their jobs in the current economic climate.
The study by the BBC found that 88% of adults aged between 25 and 34 years old, feared for their finances, saying it would be financially “very damaging” for them or their household if they were to lose their job right now.
With news today of the UK’s unemployment rate hitting a record high of 2.38 million, these fears may be justified.
Debt management organisations have urged people struggling with their finances to seek impartial debt advice sooner rather than later if they feel that they may have underlying issues.
Ivan Cooper, Chairman at the UK’s leading debt management company Chiltern, said: “In times like these, losing your job can have serious consequences on finances, lumbering households with debt problems for years to come.
“Debt management issues often need to be handled by a professional, as they can offer impartial debt advice and recommend a suitable solution to get out of debt quickly.
“We usually find that people leave it too late to deal with their debts, waiting until a credit card has been declined or a cheque bouncing, before seeking debt advice. Whereas by speaking with someone who understands the options available sooner rather than later can usually relieve debt stress sooner and help people to regain control of their finances.”
Reputable debt advice organisations, like The Debt People, Hamilton Locke and Chiltern, can offer impartial debt advice and suggest a number of professional debt solutions to relieve finances.
These include Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs), which enable people whose finances have become overstretched to regain control of their debts whilst still repaying balances.
A Debt Management Plan works by gathering multiple unsecured balances into a single monthly payment. Rather than paying many creditors various amounts throughout the month, one payment is made to the debt management company, thus making finances easier to manage.
This payment is then distributed on the client’s behalf to their creditors on a pro-rata basis (so the creditor that is owed the most receives the highest percentage proportion of the payment).
Reputable debt management companies will also negotiate with creditors, so should also be able to reduce or freeze the interest and charges on accounts.
An IVA is similar to a Debt Management Plan but is repaid over a fixed period of time – which is usually over five years. IVAs also require a qualified insolvency practitioner to draft a legally-binding agreement, which protects you from creditors changing their minds.
With both of these debt management solutions, demand letters and calls from creditors should stop – as contact is done via the company providing the service.
For immediate debt advice, or for further information about Debt Management Plans and IVAs, please call the number at the top of this page.
