Life after debt

How a debt solution can help you and your family

Posted 18 May 2016

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Find out how a debt solution might help you and your family out of problem debt.

If you can’t afford to repay your unsecured debts, a debt solution may be the best way to deal with the problem for both you and your family. 

To find out about your options and learn if there’s a debt solution that suits your circumstances, it’s really important to get expert advice. You can call or live-chat with one of our advisors  today, who will provide expert advice free of charge.

In the rest of this blog, we’re going to explore how starting a debt solution can help if you’ve got a family to support and you’re unable to repay your unsecured debts. 

What is a debt solution?

A debt solution puts you on a path to becoming debt-free, and can help to make your repayments on your unsecured debts more manageable. Each debt solution works slightly differently, which means they’re each suited to people in different circumstances. 

Debt Management Plans, for example, allow you to reduce the amount you pay each month to your creditors and still repay everything that you owe – although over a longer period than you originally agreed. 

Others reduce what you pay each month and then write off some debt when the solution ends successfully, like Individual Voluntary Arrangements

Some solutions allow for the fact that people can’t put anything towards their debts at all and actually suspend payments altogether, like Debt Relief Orders and, in some cases, bankruptcy

You’ll still be able to afford the essentials for your family

When you have children to support, you’re definitely going to have essential things you need to buy for them. These vital expenses are taken into account when you’re payments are being worked out on a debt solution. So, you’ll always have money to pay for food, travel and clothes, for example. 

When you speak to one of our advisors, they will ask you what your regular spending commitments are, including things you need to buy for your family. These outgoings are taken care of first and whatever is leftover – known as your disposable income – is what you pay towards your debts. 

We have spoken to people in the past who have faced some very difficult decisions due to overwhelming debts. For example, having to choose between heating the house or making a repayment. A debt solution can provide you with the reassurance that you’ll always have enough to pay for the essentials your family needs. 

It could improve relationships and happiness in the home

Debt problems can be worrying for anyone, but it’s likely you’re feeling even greater pressure if you have children or other dependents you need to take care of. 

Battling this constant worry can end up putting a strain on your relationships with the people closest to you, and might even end up causing your children anxiety. That’s why it’s so important for you and them that you seek help and support.

When you have a plan to deal with your debts once and for all, you should find the weight of your debt burden is lifted from your shoulders and you’re able to get on with enjoying your life a little more. 

After the debt solution

As we said earlier, the point of a debt solution is to put you in a position where you can work towards a debt-free future. 

Once the debt solution is completed, you’ll be able to start putting the money you used to pay towards your debts towards your family instead. 

Once the solution has completed successfully, you should find it much easier to afford the fun things in life that your children love, like holidays and hobbies. Or you can put that money towards a university fund for them, so they get a better start in life once they leave home. 

The negative side of debt solutions

You should never start a debt solution lightly as they do have downsides as well as upsides.

Any debt solution will have a negative effect on your credit history for six years after the date that it starts, just as a missed payment will. Once you’ve finished your debt solution, you may find that you want to apply for credit again and this means the lender will look at your credit history, as well as their own set of criteria and decide whether to lend to you.

Starting a debt solution shows that you haven’t been able to stick to the contractual payments you agreed with your lender. Because of this, a future lender may therefore be less willing to lend to you, or they may charge you a higher rate of interest. 

Certain debt solutions require you to stick to an agreed budget, which may mean you have to cut back on spending in some areas. Overall, however, you will find that having a clear budget is an advantage that allows you to afford everything you need and put as much towards your debts as you can. 

Make sure you’re getting the benefits you’re entitled to

Making sure you claim the benefits you’re entitled to can help to ease the financial strain on your family. Child Tax Credit is available if you have children under the age of 16, or children under the age of 20 if they’re in approved education or training. Exactly how much the Government will give you just depends on your circumstances, but you can get an idea by using this calculator.

It’s also possible to get an allowance if you’re a carer. To qualify for this you’d have to spend at least 35 hours per week caring for someone, and the person you care for needs to get certain benefits themselves. Check if you’re entitled here

Don’t forget to get in touch with us for all the answers to your questions about debt solutions.

by Christine Walsh

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