Notice of defaults: everything you need to know
Find out which debt solution is right for youGet started
Answer a few simple questions
See if you are suitable
Understand your next steps
A new baby means a completely new list of expenses, but what happens if you’re on a debt solution? Read our guide for a better understanding.
Finding out you’re expecting a little one should be an exciting and joyful time, but if you’re tackling a debt problem, you may worry just how your finances are going to stretch to meet the costs of a new arrival.
The important thing is to try not to worry – this is an exciting time. There are always options available and it may mean that you have to consider switching to a different debt solution or changing your current payments.
If you find out you’re expecting a baby, get in touch with your debt solution provider as soon as possible so you can work out what to do next. And if you aren’t currently on a debt solution but you know you have a debt problem that you want to get on top of now you’re pregnant, get in touch with one of our advisors using any of the buttons on the left. We will have a chat with you and see which option is most suitable for your needs.
To find out how your debt solution could be affected when you’re pregnant, read on.
In debt and want a baby?
When you first enquire about starting a debt solution, you will be asked about your current income and expenditure and also whether there’s anything coming up that could affect this – such as a promotion or retirement. If you’re planning a baby, this would definitely be worth mentioning as your advisor will factor this in when they’re looking for the best debt solution for your needs.
If you aren’t pregnant but are planning to start a family, you might be trying to clear or reduce your debts before you get pregnant to free up some of your income for when you need it. You may be entitled to some benefits, which you can learn more about in our blog here, but it’s still worth clearing as much of your unsecured debts as you can before you start or extend your family if possible.
How will a baby affect my finances?
Once you’re pregnant, chances are you will want to take maternity leave so you can relax before your baby arrives and spend time bonding with them when they get here. You should check with your employer to find out what their policy is on maternity pay. You can find information about statutory maternity pay on this government website, but it breaks down as paying you 90% of your average weekly earnings (before tax) for the first six weeks of leave and either 90% of your average weekly earnings or £139.58 (whichever is lowest) for the next 33 weeks. This could mean that your usual income drops while you’re off work.
If you think that you simply can’t afford to take time off work, be aware that you will not be able to return for a minimum of two weeks from the date your baby is born, or four weeks if you work in a factory. Bear in mind that, while when you’re pregnant you may plan to head straight back to work, you could feel very differently when your baby arrives. That’s why it’s so important that you take steps to financially prepare, especially if you have problem debts.
What will happen to my debt solution?
As we mentioned above, you will be asked whether you’re expecting any major changes to your finances when you enter a debt solution, but the fact is you might not have known then that you’d be having a baby before the solution was complete. However, your debt solution provider should be among the first people you call when you find out.
If you’re on a Debt Management Plan (DMP) and you fall pregnant, you may no longer be able to make the payments you agreed to, either because you’ll be earning less or because you’ll have more expenses – or both. Your DMP provider can speak with your creditors on your behalf and negotiate either a payment holiday or new payments with them, providing it wouldn’t result in you being on the plan for an unreasonable length of time.
When you’re on an Individual Voluntary Arrangement (IVA), you will have a review at least once a year and any changes to your income and expenditure will be noted. You can request a review at any time, though, so get in touch with your Insolvency Practitioner and they can discuss what happens next. They are experienced in this area and will be able to work with you and your creditors to work out what your choices are. Options may include working out a new payment plan (although your creditors would need to agree to this) or taking a payment holiday.
If you’re on a debt solution like a Debt Relief Order (DRO) or bankruptcy, your pregnancy shouldn’t have much of an impact – but you should still tell your money advisor (or the Official Receiver (OR) if you’re bankrupt). If you have been making payments as part of your bankruptcy, the OR will look at this and decide whether those payments need to change.
What if my debt solution no longer works?
If the debt solution you’re on doesn’t work anymore because your pregnancy means money is even tighter, your advisor can help you look at alternatives. Just because your circumstances have changed, it doesn’t mean that you have to go back to tackling your debts on your own.
So, if your DMP no longer makes sense because your repayments are so low you will be on it for years and years, you may qualify for a DRO instead. The debt solutions we’ve mentioned so far are available in England, Wales and Northern Ireland. If you live in Scotland, you can find out more about the debt solutions available to you here.
As we said at the start of this blog, pregnancy should be an exciting time. Try not to let worries about your finances overshadow this because there is always a route out of debt even if your circumstances change. And remember, we’re here waiting to give you advice when you need it – just get in touch using the options on the left and we’ll see how we can help.
by Kyri LevendiBack to blog home