Figures from the Office of National Statistics reveal that the number of people out of work has risen by 137,000 in the three months to October. The total number of people unemployed now stands at 1.86 million – the highest since June 1999.
This has taken the unemployment rate up to 6% from 5.8% previously.
The number of people claiming Jobseeker’s Allowance (JSA) in November also rose. JSA numbers were up by 75,700 to 1.07 million – the largest rise since March 1991.
Several large companies have announced they are making job cuts, which has impacted on unemployment and JSA numbers, causing many to worry about maintaining payments on their debts.
These people may now have to seek debt advice or try to get help with debts if they don’t return to work soon. Debt management can be a useful short-term solution in these types of instances, as debts are repaid but at a more affordable level.
A debt management plan (DMP) is an informal agreement between a debtor and the person they owe money to, which collects all debts into one affordable payment.
Once finances have been brought under control and work is resumed, payments can be reverted back to their original amounts and the debt management plan (DMP) can be stopped. Debt management is therefore considered a flexible debt solution.
It is often the case on a debt management plan that interest or charges can be reduced or frozen, meaning the total level of debt is reduced.
In cases where there is a larger amount of debt an Individual Voluntary Agreement, or IVA, may be considered to be the most suitable solution. An IVA is a legal contract between a debtor and their creditors. IVAs can also prevent bankruptcy or the loss of employment in certain professions.
