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Are you pregnant and worried that you’ll fall into unmanageable debt? Read our blog, it’ll tell you how to prepare financially for the big arrival and what to do if you’re already on a debt solution.
In parts 1 and 2 of this blog we've had a look at how to prepare financially for a baby and the help that you should be entitled to. Today, let's have a look at what might happen and what you should do if you're already on a debt solution. If this is you then there’s no reason why being pregnant or having a baby should mean that you’re not able to carry on tackling your debts. Let’s have a look at what you need to do if you've found out you’re pregnant whilst already on a solution.
If you’re on an IVA…
When you start an IVA (Individual Voluntary Arrangement) your Insolvency Practitioner (IP) will go through an income and expenditure analysis with you to establish in detail what you’ve got coming in and what you’ve got going out. Your IP and your creditors should be understanding of the other demands that you have on your money and allowances are made if you have any dependents living at home with you. So, if you find out that you’re expecting a new “little dependent”, then all you need to do is make them aware of the change in your circumstances and they will take you through the income and expenditure process again to see what would be affordable for you.
If the change is a significant one then your IP may call a variation meeting to give your creditors the chance to vote on whether they agree with the change or not. Or it may be best to for you to have a six month break from your IVA payments, meaning that your IVA would last longer overall. For more information on how payments on an IVA can vary have a look at our blog.
The thing to remember here is that your IP has expert knowledge dealing with debt solutions and they will have come across this situation before. You should tell them as soon as possible so that they can start putting together the best plan for you.
If you’re on a DMP…
Again, don’t worry if you think that you won’t be able to keep to the original payments on your DMP when you’ve had your baby. The most important thing to do is give your provider a call and explain the situation to them. They will go through your income and expenditure again with you and, if necessary, propose new lower payments to your lenders (as long as this didn’t mean you were on the DMP for a unreasonable length of time.)
These lower payments could be for a certain period of time, or they could be permanent, it just depends on your situation. It’s not guaranteed that your lenders would agree to lower payments, but it’s likely that they would agree to whatever was realistically affordable for you if they’ve seen evidence of your change in circumstances.
If you’ve gone bankrupt…
If you’ve already been declared bankrupt, you’ll fall into one of two camps: you’ll either be paying something into the bankruptcy every month, known as an Individual Payment Arrangement (IPA), or you won’t be paying anything because you don’t have enough disposable income to do this.
If you’re in the first camp and you find out you’re pregnant, you should tell your Official Receiver (The OR is the person who oversees the bankruptcy) as soon as possible. It may be possible for them to arrange for the IPA to be lowered or stopped altogether for a short time, depending on how tight things are.
If you’re on a DRO…
If you’ve already started a Debt Relief Order, falling pregnant shouldn’t affect the arrangement, as you don’t pay anything towards your debts with this solution.
On a DRO your debt payments are suspended for 12 months and throughout that time, your lenders are not allowed to chase you for payments at all. After the 12 months, if your situation has not improved and you still can’t afford to put anything towards your debt, then your unsecured debts are written off.
So, if you’re on a DRO, and you’re worried that you can’t afford everything you need for your baby, it’s best to look into the benefits and entitlements that you should be getting to help ease the strain.
There can be a lot to think about at the best of times when it comes to money, never mind when you’re also expecting a baby! Preparing for your baby should be a wonderful time filled with special memories and we’d hate to think of anyone spending that precious time worrying about money, especially when they could be a phone call away from the right route out of problem debt. Make sure you know what’s going on with your finances, you claim everything you’re entitled to, and you seek help if your debts are too much to handle. If you do, you should be absolutely fine.
by Christine WalshBack to blog home