An increasing number of women and self-employed individuals are suffering from major debt problems that, if left unattended, can eventually cause insolvency.
Income loss is the most common reason why people enter a Debt Management Plan (DMP).
Figures from the ONS confirm the fact that the economic downturn has forced women and the self-employed to struggle to make ends meet. More and more employees who used to work full-time are now on shorter shifts or have only very few work opportunities. Furthermore, there is a skills shortage and despite jobs advertised, many do not have the skills required to fulfill those roles.
What to Do Now?
Anyone who's faced with serious debt should get advice at the earliest possible stage. Many countries offer free advisory support, so please check government websites as a starting point.
Employees who have very limited disposable income and whose debts are below a certain threshold can resort to a debt relief order. If debts are higher, the best option would be bankruptcy. Note that every country has different rules so please check for your geographical region.
Every financial situation is unique and any action should be done with caution. Some experts suggest that the initial step should be seeking professional help from a qualified IVA or debt adviser. More importantly, when in the midst of income loss, people should start prioritising bills and payments, such as mortgage, insurance, council tax, and other necessities.
It's always good advice to speak with lenders and financial services first to inform them about your status and find professional assistance.
The key to get out of a spiral of debt is to tackle impending financial problems before they really hit. This way, you can get back on your feet and eventually have your finances back in good shape.
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