More people are putting off getting a divorce because of the financial and debt management implications of the recession, according to recent research.
According to a survey of divorce lawyers by advice website unbiased.co.uk, there has been a decline in divorce agreements during the recession, due to the economic climate.
Their study found that half of the lawyers surveyed said that less clients were coming forward to seek divorce, financial or debt advice regarding their separation.
David Elms, chief executive of Unbiased, said: “The credit crunch may lead many people to put major financial decisions and developments on hold. However, seeking professional advice as soon as possible is always the best step to get your financial affairs in order.
“Getting a divorce can be a stressful enough process without also waiting to reach a financial settlement for a prolonged period of time.”
Ivan Cooper, Chairman at one of the UK’s leading debt advice organisations Chiltern, said: “Whilst it isn’t the most romantic of reasons of staying together, people are realising that when they leave the marital home they could be financially out of pocket.
“People become more reliant on overdrafts, loans and credit card debts, to make up for the reduced income following separation, so it can stretch finances to breaking point.
“Without sound debt management skills in place, this could force someone to develp serious debt problems.”
Debt advice organisations suggest seeking impartial debt help from a reputable company as soon as any debt problems appear. Organisations like The Debt People, Hamilton Locke and Chiltern will be able to offer free debt advice, which could include budgeting and prioitisation of outstanding debt repayments, or in some circumstances a professional debt management solution could be recommended.
Professional solutions, such as an Individual Voluntary Arrangement (IVA), Debt Management Plan (DMP) or Trust Deed help people who are struggling with their unsecured balances (overdrafts, personal loans, credit card debts etc) to regain control of finances whilst still repaying their outstanding debts.
A debt management plan is an informal arrangement that gathers outstanding unsecured balances into a single monthly payment. Repayments are then rescheduled over a longer period of time to make them more affordable.
IVAs also gather multiple unsecured balances into one manageable payment but are repaid over a fixed period of time. For an Individual Voluntary Arrangement (IVA), this is typically over five years. Trust Deeds are the equivalent of an IVA for people living in Scotland and are usually repaid over three years.
For immediate debt advice, or for further information on Individual Voluntary Arrangements (IVAs), Debt Management Plans (DMPs) or other Professional Debt Management solutions, please call the number at the top of this page.
