As The Recession Bites More Seek Debt Advice

According to official government figures the current recession is seeing the fastest rising unemployment rate since the 1980s, so debt advice organisations are preparing for the increased demand for their help.

Those people hardest hit live in the West Midlands or worked in the finance and business service sectors according to figures released by the Office for National Statistics (ONS).

The downturn has impacted the West Midlands most according to the ONS figures because they have experienced higher levels of redundancy on top of high unemployment compounded by a large fall in the numbers of job vacancies. The age group most badly hit are the eighteen to twenty four year olds where there has been a sixteen per cent rise in unemployment levels and, unusually, the gender suffering most at the moment are men rather than women. Job losses in the finance and business services sector have seen the steepest increases since 1978.

This means that there will be more households receiving lower incomes (or none at all), and will have reduced means to repay their unsecured balances and get out of debt. As a result, debt help organisations have needed to ensure they can cope with the increased demand for their debt advice services.

A spokesperson for one debt management agency commented: "We've experienced more people than ever who are calling us after being made redundant. Very few people are fortunate enough to have saved a cushion of savings to cope with losing their job, so any money they have is quickly swallowed up by paying bills, rent and credit card debts. The best thing to do if your household income drops, is to contact an impartial professional as soon as possible, rather than going further overdrawn, as this will only lead into even more problems when the credit eventually runs dry."

Debt help agencies offer free advice to help ease worries as people face up to the reality of their debt burden. This advice can be as simple as help with budgeting to regain control of their finances, or as complex as debt management plans (DMPs) or Individual Voluntary Arrangements (IVAs) - Trust Deeds in Scotland with a number of options in between.

Negotiating with lenders on the client's the debt advice organisation agree the debt management plans (DMPs). These plans allow increased payments when a client's circumstances change and are therefore very flexible. Repayments within the terms of a debt management plan are more manageable for the individual as they spread the total debt over a longer period resulting in smaller regular payments. No formal contracts are involved in this informal debt help solution, and clients are free to terminate if they feel it is no longer right for them.

A more formal process IVAs (Individual voluntary arrangements) require a legally binding contract. Additionally they have to be administered by a qualified Insolvency Practitioner and follow a full debt advice consultation designed to ensure that an IVA is the right debt help solution. They usually run for a fixed five year term and the level of payment is also fixed.

About the Author:

It is always worth seeking impartial advice from a specialist debt help organisation. Please click one of thses links for further information about Debt help debt advice href="http//www.thedebtpeople.co.uk/iva-advice.aspx"> IVA advice or
href="http://www.thedebtpeople.co.uk/debt-management.aspx"> debt management plans or call free to 08000 432 332 for free advice.

Article Originally Published On: http://www.articlesnatch.com