Debt management for unemployed people
Although they`re designed to help people in financial difficulty, most debt solutions require you to have a regular income.
This means most debt solutions can be out of the reach of unemployed people. Even if you claim Jobseeker`s Allowance (JSA), it probably won`t be enough to put towards your debts while still covering your other living costs.
However, it`s still important that you take action fast - and there are things you can do to improve your situation.
What to do if you`re unemployed and in debt
1. Talk to your lenders
The first thing you should do if you can`t afford to repay your debts is contact your lenders to explain the situation. A lot of people assume their lenders won`t be understanding, but this really isn`t the case.
Your lenders will want to come to some kind of agreement just as much as you will - after all, it`s in their interest to get back everything you owe them, and they probably won`t get this by forcing your bankruptcy.
They may agree to a `moratorium` - a temporary break in your payments while you try to get your finances back on track. If this goes on for too long, though, they may start making demands for payment again.
2. Make sure you`re claiming everything you`re entitled to
A lot of people don`t realise just what they`re entitled to when it comes to benefits. Most people know about JSA, but there may be other entitlements that could really help you.
www.entitledto.co.uk is a quick and easy way of finding out what benefits you might be eligible for.
3. Look at your options
If you can`t find work and your financial circumstances don`t improve, you may have to accept that you simply won`t be able to pay your debts off. In this case, your better option may be bankruptcy - or, depending on the value of your debts and assets, a Debt Relief Order. But both have long-term consequences, and you should therefore always talk to an expert debt adviser to discuss your situation before committing to any debt or insolvency solution.
Tags: debt, debt management, debt management unemployed, unemployment, job, no job, dole, job seekers allowance, benefits, entitled to, bankruptcy, DRO, debt relief order