Archive for the causes of debt Category

Dealing with Debt

These days, credit in very easy to obtain for those living in the UK. Those looking to led money include small scale money lenders, mail order firms, credit unions, finance companies, insurance companies, credit card companies, building societies and banks. Most of us will eventually require credit in some form or another, whether it is a mortgage to buy a house or a loan to purchase expensive electronics, furniture or a new car. The definition of credit is buying a product or service under conditions that offer you time to pay it off. That credit itself is paid for in the form of interest. Those who borrow money would be wise to check the APR (Annual Percentage Rate) to make sure they are getting the cheapest credit possible.
It’s easier than you might think to end up borrowing more money than you have the ability to repay and when you do that, the resulting money owed is called debt. To word it another way, credit is debt that you have under control while debt is credit that has gotten out of control. Many people end up borrowing even more money against their debts in the hope of clearing what they owe, instead creating an even larger debt for themselves.
When people experience debt problems it is usually due to multiple debts they owe becoming overdue, such as:
Overdue on Holidays (Particularly ‘Fly now, pay later’)
Overdue on furniture payments
Overdue on TV/Video/Stereo equipment
Overdue on car payments
Overdue on electricity, gas or telephone utilities with the result of being cut off
Overdue on council tax with the result of bailiffs or worse consequences
Overdue on mortgage with the frightening result of repossession and subsequent homelessness
Debts have a nasty tendency to ruin lives when they get out of hand so it is crucial that you seriously consider borrowing money each and every time you do so. You and your family’s lives are what will be affected should the situation spiral out of your control. More often than is commonly believed, debt is a cause of the breakdown of a marriage. Your golden rule could be: Never borrow more money than you are absolutely certain you can pay back.
If you do, despite your best intentions, find yourself struggling with debt, take a moment to consider your options for getting your financial life back on track.
A Debt Management Plan or Individual Voluntary Arrangement (IVA) may be exactly what you need to get yourself back into financial health once again.

These days, credit in very easy to obtain for those living in the UK. Those looking to led money include small scale money lenders, mail order firms, credit unions, finance companies, insurance companies, credit card companies, building societies and banks. Most of us will eventually require credit in some form or another, whether it is a mortgage to buy a house or a loan to purchase expensive electronics, furniture or a new car. The definition of credit is buying a product or service under conditions that offer you time to pay it off. That credit itself is paid for in the form of interest. Those who borrow money would be wise to check the APR (Annual Percentage Rate) to make sure they are getting the cheapest credit possible.

It’s easier than you might think to end up borrowing more money than you have the ability to repay and when you do that, the resulting money owed is called debt. To word it another way, credit is debt that you have under control while debt is credit that has gotten out of control. Many people end up borrowing even more money against their debts in the hope of clearing what they owe, instead creating an even larger debt for themselves.

When people experience debt problems it is usually due to multiple debts they owe becoming overdue, such as:

Overdue on Holidays (Particularly ‘Fly now, pay later’)

Overdue on furniture payments

Overdue on TV/Video/Stereo equipment

Overdue on car payments

Overdue on electricity, gas or telephone utilities with the result of being cut off

Overdue on council tax with the result of bailiffs or worse consequences

Overdue on mortgage with the frightening result of repossession and subsequent homelessness

Debts have a nasty tendency to ruin lives when they get out of hand so it is crucial that you seriously consider borrowing money each and every time you do so. You and your family’s lives are what will be affected should the situation spiral out of your control. More often than is commonly believed, debt is a cause of the breakdown of a marriage. Your golden rule could be: Never borrow more money than you are absolutely certain you can pay back.

If you do, despite your best intentions, find yourself struggling with debt, take a moment to consider your options for getting your financial life back on track.

A Debt Management Plan or Individual Voluntary Arrangement (IVA) may be exactly what you need to get yourself back into financial health once again.

Tax Debt in the UK

When You Can’t Pay Your Tax
In this article we want to explore the primary aspects of an inability to pay one’s tax.
Some terms to better help you understand this article are as follows:
Collector – The person who purses those who have not paid tax. Today these individuals are part of the RMS (Receivables Management Service). However, before a collector will pursue you, an initial application for payment is sent from one of the two Accounts Offices in either Cumbernauld or Shipley. If, instead local enforcement action must be taken for payment not having been made, the Recovery Office will deal with this matter. Usually, the Recovery Office is named after the city or town where it is located and this office has jurisdiction for the area in which you live or trade. In cases where a bankruptcy is involved, the EIS (Enforcement and Insolvency Service) in Worthing will get involved. Those employed by the RMS may contact you if your returns are outstanding, but they do not process your return themselves.
The issuing and processing of returns is handled by RMS offices which in this article will be called “tax offices” because that is what they are traditionally called in an unofficial sense. It’s important to realize that different people within the RMS have different roles so the “collector” who contacts you is usually a different person from the RMS who does not deal with your specific tax return – that would be the “tax office”.
Warning Signs of Impending Problems
Each year, thousands of individuals get into arrears with their tax. Normally, the individual is made aware of this situation when they see a debt on their Statement of Account. After a short time, a collector will generally get in touch via letter or telephone and ask for an immediate payment. It is important to remain calm and fight any sense of panic you feel.
The RMS can frighten people by threatening them with legal action, but it is still crucial that you don’t panic if this happens because the situation may not be as dire as it seems. Remain calm as you work through the situation and consider your options, as well as how you got into the situation.
The first thing to remember is that you should never ignore a statement of account or a demand from a collector because that is the worst action to take. If there is any chance that you can resolve your situation then you will want to act quickly because if you do nothing then you are inadvertently raising the risk that you will face legal action.
Remember, the amount being demanded could be incorrect. You may find that you disagree with what either the collector or the Statement of Account state is the amount of tax owed. In some instances your statment may include what is called a determination, which is an estimate and made because the tax return (or tax returns) have not been completed. If this is the case it can be corrected.
Unfortunately, the collector who is paid to pursue you for upaid tax may or may not be trained in how to understand the tax so you could well be wasting effort if you try to persuade them that the figure is incorrect. Generally you will need to contact your tax office to make the needed adjustments because they are the ones who deal with your tax return.
You will end up liable for penalties, surcharges, interest and tax charged on determination if you have not completed your tax return (or tax returns) which is not only correct, but enforceable until you have submitted a completed return. Once you have submitted the return the amount of tax will be revised so that they reflect the amounts shown on your return. Then you will only need to pay the revised debt plus interest and any outstanding penalties or surcharges that are still due in respect of the revised debt.
In cases of ‘non-return’, outstanding debts are pursued until the required return is submitted, so even if you pay all that is demanded, they will continue to take action in order to get that return submitted. Generally this means daily penalties. Therefore, it is not in your interest to always submit your returns in a timely manner.
There are some instances where, if you do owe tax, you are allowed to pay it over time. Although tax should always be paid when it falls due, the RMS allows some people to pay their tax over a period of weeks, months or longer, in certain circumstances. This does mean, however, that interest will be added to the total amount due, but it’s possible this interest will be small. Generally  in these instances the RMS will keep reminding you that interest is being added to the total because they have no discretion and are unable to freze interest in order to help you clear the debt quicker.
Interest rates on unpaid tax is actually lower than is commonly believed, right now it is set at 6.5% per annum. As an example, being one month late on a tax bill of £2,000 means you are charged £11.
Many people are afraid that failure to pay tax in a timely manner leads to criminal prosecution and imprisonment, but this rarely happens. The RMS does prosecute a few people each year, but these are mostly cases where the person is alleged to have been seriously dishonest or trying to evade the tax. The RMS won’t take this course of action simply because an individual has not paid tax on time or if they are having trouble finding money to settle. Yet, at the same time it is important to be aware of the risk that the RMS may try to obtain a court judgment against you for the unpaid tax. If you fail to pay the tax after this you may receive a judgment summons which requires you to attend court and explain why you haven’t paid. Ignoring a judgment summons and not attending court could result in a prison sentence.
It is important to understand that you have rights when you are a taxpayer. The RMS must hold to a Service Commitment and under this, it promises to treat taxpayers fairly and with courtesy. When you have clear evidence that the person who has dealt with your case was rude, unfair or overly harsh then you have a right to complain and ask that another person be assigned to your case.
After you have been contacted regarding unpaid tax, you will want to consider what to do next:
- Do you believe the amount being demanded is incorrect? If you do then do not hesitate to take action in order to get the figure corrected
- If you believe that you do owe tax, but you can’t pay immediately then you want to work out an agreement with the RMS
- In the instance that you are unable to work an agreement out with the RMS you may face enforcement action so it is important to understand each of those procedures and which defences could help you most.
There are people who have never declared their income and as result do not receive any demands from the RMS because it is unaware that the person has earned any taxable income or has been misled regarding the total amount earned. This situation is dangerous because the person may end up receiving a penalty for failing to report their income and that means the risk of potential prosecution.
If you are dealing with tax arrears, the situation can be stressful due to the complexity so you may benefit from outside counsel. You could benefit from help getting things straightened out through either a Debt Management Plan or, in more severe instances where you owe fifteen thousand pounds or more, an Individual Voluntary Arrangement (IVA).
Get started today sorting these issues out because waiting only makes your life more stressful than it needs to be.

When You Can’t Pay Your Tax


In this article we want to explore the primary aspects of an inability to pay one’s tax.


Some terms to better help you understand this article are as follows:


Collector – The person who purses those who have not paid tax. Today these individuals are part of the RMS (Receivables Management Service). However, before a collector will pursue you, an initial application for payment is sent from one of the two Accounts Offices in either Cumbernauld or Shipley. If, instead local enforcement action must be taken for payment not having been made, the Recovery Office will deal with this matter. Usually, the Recovery Office is named after the city or town where it is located and this office has jurisdiction for the area in which you live or trade. In cases where a bankruptcy is involved, the EIS (Enforcement and Insolvency Service) in Worthing will get involved. Those employed by the RMS may contact you if your returns are outstanding, but they do not process your return themselves.


The issuing and processing of returns is handled by RMS offices which in this article will be called “tax offices” because that is what they are traditionally called in an unofficial sense. It’s important to realize that different people within the RMS have different roles so the “collector” who contacts you is usually a different person from the RMS who does not deal with your specific tax return – that would be the “tax office”.


Warning Signs of Impending Problems


Each year, thousands of individuals get into arrears with their tax. Normally, the individual is made aware of this situation when they see a debt on their Statement of Account. After a short time, a collector will generally get in touch via letter or telephone and ask for an immediate payment. It is important to remain calm and fight any sense of panic you feel.


The RMS can frighten people by threatening them with legal action, but it is still crucial that you don’t panic if this happens because the situation may not be as dire as it seems. Remain calm as you work through the situation and consider your options, as well as how you got into the situation.


The first thing to remember is that you should never ignore a statement of account or a demand from a collector because that is the worst action to take. If there is any chance that you can resolve your situation then you will want to act quickly because if you do nothing then you are inadvertently raising the risk that you will face legal action.


Remember, the amount being demanded could be incorrect. You may find that you disagree with what either the collector or the Statement of Account state is the amount of tax owed. In some instances your statment may include what is called a determination, which is an estimate and made because the tax return (or tax returns) have not been completed. If this is the case it can be corrected.


Unfortunately, the collector who is paid to pursue you for upaid tax may or may not be trained in how to understand the tax so you could well be wasting effort if you try to persuade them that the figure is incorrect. Generally you will need to contact your tax office to make the needed adjustments because they are the ones who deal with your tax return.


You will end up liable for penalties, surcharges, interest and tax charged on determination if you have not completed your tax return (or tax returns) which is not only correct, but enforceable until you have submitted a completed return. Once you have submitted the return the amount of tax will be revised so that they reflect the amounts shown on your return. Then you will only need to pay the revised debt plus interest and any outstanding penalties or surcharges that are still due in respect of the revised debt.


In cases of ‘non-return’, outstanding debts are pursued until the required return is submitted, so even if you pay all that is demanded, they will continue to take action in order to get that return submitted. Generally this means daily penalties. Therefore, it is not in your interest to always submit your returns in a timely manner.


There are some instances where, if you do owe tax, you are allowed to pay it over time. Although tax should always be paid when it falls due, the RMS allows some people to pay their tax over a period of weeks, months or longer, in certain circumstances. This does mean, however, that interest will be added to the total amount due, but it’s possible this interest will be small. Generally  in these instances the RMS will keep reminding you that interest is being added to the total because they have no discretion and are unable to freze interest in order to help you clear the debt quicker.


Interest rates on unpaid tax is actually lower than is commonly believed, right now it is set at 6.5% per annum. As an example, being one month late on a tax bill of £2,000 means you are charged £11.


Many people are afraid that failure to pay tax in a timely manner leads to criminal prosecution and imprisonment, but this rarely happens. The RMS does prosecute a few people each year, but these are mostly cases where the person is alleged to have been seriously dishonest or trying to evade the tax. The RMS won’t take this course of action simply because an individual has not paid tax on time or if they are having trouble finding money to settle. Yet, at the same time it is important to be aware of the risk that the RMS may try to obtain a court judgment against you for the unpaid tax. If you fail to pay the tax after this you may receive a judgment summons which requires you to attend court and explain why you haven’t paid. Ignoring a judgment summons and not attending court could result in a prison sentence.


It is important to understand that you have rights when you are a taxpayer. The RMS must hold to a Service Commitment and under this, it promises to treat taxpayers fairly and with courtesy. When you have clear evidence that the person who has dealt with your case was rude, unfair or overly harsh then you have a right to complain and ask that another person be assigned to your case.


After you have been contacted regarding unpaid tax, you will want to consider what to do next:


- Do you believe the amount being demanded is incorrect? If you do then do not hesitate to take action in order to get the figure corrected


- If you believe that you do owe tax, but you can’t pay immediately then you want to work out an agreement with the RMS


- In the instance that you are unable to work an agreement out with the RMS you may face enforcement action so it is important to understand each of those procedures and which defences could help you most.


There are people who have never declared their income and as result do not receive any demands from the RMS because it is unaware that the person has earned any taxable income or has been misled regarding the total amount earned. This situation is dangerous because the person may end up receiving a penalty for failing to report their income and that means the risk of potential prosecution.


If you are dealing with tax arrears, the situation can be stressful due to the complexity so you may benefit from outside counsel. You could benefit from help getting things straightened out through either a Debt Management Plan or, in more severe instances where you owe fifteen thousand pounds or more, an Individual Voluntary Arrangement (IVA).


Get started today sorting these issues out because waiting only makes your life more stressful than it needs to be.

    Debt Advice for Gay and Lesbian Couples

    While there is a rather unhelpful stereotype in the media that depicts the stereotype as wealthy gay male couples who both have incomes with neither having any children, the reality is often quite a bit different. Gay and lesbian people face as much debt as any other people in the UK.

    A community funded survey done in Brighton in 1999 showed that most gay couples in that community and in surrounding areas were living on annual incomes of less than £15,000.

    An income that low means that a couple cannot save against potential income interruptions or other unexpected misfortunes and that means there can be no real long term financial security. If there is no genuine ability to save for the future then it is quite difficult to plan for a future where uncertainty is the only given.

    Debt at this income level can be catastrophic for both partners, leading to needless stress and causing difficulties within the relationship itself, regardless of the lifestyle the couple leads together. If creditors are hassling you or your partner, then it is important not to let things go too far. Gay and lesbian couples face the same financial challenges that all couples face and because of this, they are able to benefit from the same solutions because all people are equal when it comes to financial and legal rights, as well as challenges.

    If your debt is still near being under your control then you may want a Debt Management Plan, a sensible solution to re-structuring your payments into a single payment you can afford. More severe debt may require an Individual Voluntary Agreement (IVA) that can help manage debt that’s gone too far. Even a bankruptcy may help if it’s gone so far that repayment is no longer an option for you.

    Don’t let debt control your life, seek help online where you can get quality advice from a trained professional.

    Debt from Disability

    Specialist Debt Support Unit
    Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.
    It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.
    In the UK, disability includes a variety of unique circumstances leading to debt that can include:
    - People with physical impairments that require medical equipment for daily living
    - People with mental health conditions that affect their everyday life
    - A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances
    - There are many types of sensory impairment that people suffer that can restrict their daily activities
    Reasons for Debt from a Disability
    There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:
    - In times of personal crisis, financial concerns go understandably neglected
    - Cost of respite care can lead to or increase debt
    - Disability transport costs can lead to debt
    - Cost of hiring people to provide care if one’s family cannot
    - Because financial concerns are not focused on, benefits may not be claimed as they should
    - Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability
    - Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind
    - Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself
    - Debt repayments can wreak havoc on already limited and fragile income
    The Connections Between Disabilities and Debt
    A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.
    These situations mean that debt is created in one or more of the following ways:
    * Typically, a combination of circumstances and factors lead to debt form disability
    * Costly, recurring purchases of specific items that are required by a disabling health condition
    * Not enough assistance from the benefits system or none at all
    * Often dealing with a disability means high telephone bills and high fuel bills
    * At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle
    * Expenses associated with a disability can lead to debts
    * There can be a frequent need to replace cruical furniture
    * Alteration of accomodations may be required
    * A move may be needed to have a situation with better accomodations for the disabled
    * Bearing the cost of replacing items damaged by a child with behavioural problems
    * Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis
    * Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker
    Job Options and the Employment Market for Those with a Disability
    Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.
    A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.
    Deferring Payments on Debt from Disability
    If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.
    Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.
    If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.
    If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.
    The Impact from Disability-related Debt on Those Caring for Disabled People
    Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.
    In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.
    The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.
    Mental Health Issues and Their Role on Disability-related Debt
    Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassaing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.
    For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.
    How Creditors Respond to Those with Disabilities Who Are in Debt
    Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.
    The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.

    Specialist Debt Support Unit

    Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.

    It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.

    In the UK, disability includes a variety of unique circumstances leading to debt that can include:

    - People with physical impairments that require medical equipment for daily living

    - People with mental health conditions that affect their everyday life

    - A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances

    - There are many types of sensory impairment that people suffer that can restrict their daily activities

    Reasons for Debt from a Disability

    There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:

    - In times of personal crisis, financial concerns go understandably neglected

    - Cost of respite care can lead to or increase debt

    - Disability transport costs can lead to debt

    - Cost of hiring people to provide care if one’s family cannot

    - Because financial concerns are not focused on, benefits may not be claimed as they should

    - Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability

    - Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind

    - Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself

    - Debt repayments can wreak havoc on already limited and fragile income

    The Connections Between Disabilities and Debt

    A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.

    These situations mean that debt is created in one or more of the following ways:

    * Typically, a combination of circumstances and factors lead to debt form disability

    * Costly, recurring purchases of specific items that are required by a disabling health condition

    * Not enough assistance from the benefits system or none at all

    * Often dealing with a disability means high telephone bills and high fuel bills

    * At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle

    * Expenses associated with a disability can lead to debts

    * There can be a frequent need to replace crucial furniture

    * Alteration of accommodations may be required

    * A move may be needed to have a situation with better accommodations for the disabled

    * Bearing the cost of replacing items damaged by a child with behavioural problems

    * Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis

    * Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker

    Job Options and the Employment Market for Those with a Disability

    Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.

    A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.

    Deferring Payments on Debt from Disability

    If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.

    Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.

    If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.

    If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.

    The Impact from Disability-related Debt on Those Caring for Disabled People

    Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.

    In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.

    The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.

    Mental Health Issues and Their Role on Disability-related Debt

    Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.

    For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.

    How Creditors Respond to Those with Disabilities Who Are in Debt

    Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.

    The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.

    Debt from Ill Health

    Debt from Ill Health is More Common Than You Think
    One of the more common problems that people end up finding themselves in debt due to is ill health. Unfortunately, the stress from debt also ends up being a contributing factor to health problems which creates something of a circle of negative effects.
    Some of the common methods of UK debt management which may help solve ill health debt problems are:
    1 – IVA (Individual Voluntary Arrangement)
    1 – Debt Management Plan
    3 – Protected Trust Deed (for residents of Scotland)
    4 – Bankruptcy
    There are so many reasons that people experience debt due to ill health. Here are a few reasons that you might not have thought of:
    - In times of illness, finances are often understandably neglected
    - A sudden drop in income is not unusual since it may lead to a loss of work
    - The cost of tranport for treatment can increase debt
    - The cost of respite care can also raise debts
    - Situations of deteriorating health from illness due to the process of handling debt in the first place can make dealing with the debt even more difficult
    - Food required for special diets or medicines needed to treat illness can lead to debt
    - Ill health can force clients in physical labour jobs to lose work or stop working entirely
    - Making payments on debts can drastically reduce the disposable incomes of those suffering illness
    - Care service cost can sabotage the budgets of those with ill health
    - Mental health related issues may mean those suffering are unable to work for significant periods of time
    Job Options for Those Suffering Ill Health and the Employment Market They Face
    Debt problems can pile up quickly as a person adjusts to the onset of ill health. Even those who can find employment, if they have a small income change or an extra demand placed on that income, they could find themselves in a debt problem. Merely being in ill health can also keep people from being able to get a job. Despite strict employment laws in the UK, people suffering from illness many times have difficulties because they are unable to work standard hours.
    Debts from ill health can also occur when a there is a change in income due to the loss of a benefit or a partner’s earnings. Those suffering from illness who have a long term dependency on benefits it can be even more difficult to resolve this debt, especially fi they are receiving disability benefits and essentially at the mercy of the government for their income.
    In the UK, the problem for some people who struggle with debt due to ill health is that they do not qualify for any Disability Living Allowance (DLA) due to technicalities in the law.
    This can be a real struggle for those battling illness, but depending upon your payment history and whether your ill health is prone to be long or short term, you can sometimes get your lender to agree to:
    - The lender may agree to reduce your payments over a period of time you both agree to
    - The lender may charge interest for a shorter period of time if you have a repayment mortgage instead of having you pay both capital and interest
    - The lender may extend your mortgage’s term in order to lower your payments
    - The lender may offer you a ‘payment holiday’
    Some reasons that people end up in debt can be:
    - General financial over commitment
    - Poverty
    - Loss of work
    - Illness
    - Breakdown in their relationships
    Debt and Illness – What if You Are In Debt Already?
    Depending on your track record of making payments in a timely manner, if you have fallen behind then your lender can suggest ways to pay off the arrears gradually along with your usual payments. If you are unable to meet the extra payments you may be able to have them either delayed temporarily or added onto your loan.
    You will want to pay as much as you can afford each month because keeping up with your usual payments (even if they are not in full) proves you are committed to repaying what you owe. If you can prove you are committed then your lender is likely going to be more sympathetic to your plight and possibly minimise the arrears charges, as well.
    Some anonymous case studies (to protect personal identities in this sensitive aspect of life) regarding debt for those who suffer from ill health are featured below along with some examples of situations that cause this type of debt:
    - Debt from ill health affects people’s emotional states by compounding severe stress
    - Ill health renders many people unable to work
    - Debt can be linked to uncontrollable physical conditions such as epilepsy
    - Debt is often linked to suicide
    Debt From Epilepsy
    This is the case of a woman who bought a car with hire purchase whom we will refer to as Laura. Right after purchasing this car her doctor diagnosed her with epilepsy and Laura could no longer drive. Obviously, she decided she would need to sell this car. Upon informing her finance company of this decision, they told her she would not be able to sell the car privately and that, instead they would sell the car on her behalf then let her know what the remaining balance she owed would be. Later, the company informed Laura that she owed £8,000 plus £3,000 in insurance premiums for policies that could not be cancelled even though they covered risks related to not being able to pay on her loan even though this insurance was to be discharged. As you can see this situation would be incredibly difficult to cope with, not to mention highly unfair, but these are real life situations that people like Laura in the UK face when struggling with debt from ill health.
    Ill Health Leaves Man Unable to Work
    This case involves a man whom we will call Robert who lived on a very small income and therefore used credit cards in an effort to meet his basic essential needs. This results in £25,000 in unsecured debt on a total of six separate credit cards. Robert became unable to work due to his poor health, becoming more and more stressed by the debt accumulating due to this. He suffered a breakdown specifically tied to his inability to repay on his debt. Robert’s situation is also not unusual in the UK, sadly.
    Debt Leads to Emotional Problems
    A woman whom we will call Harriet had a hire purchase agreement for a car purchase. After two and a half years she defaulted after becoming temporarily unemployed. Harriet now lives with her parents and has a job once again. After becoming involved in a car accident that resulted in a fatality, Harriet was left with severe emotional trauma. On top of this, her mother suffers from ME. Harriet now must go to court due to defaulting on repayments, but three months after her default, she and her parents were receiving an average of twenty calls per day between 6am and 9pm. This greatly exacerbated Harriet’s emotional problems and her mother’s condition, as well. Once again, situations such as this are not entirely uncommon in the UK.
    Debt Stress and Its Ties to Suicide
    As extreme as it may seem on the surface, one man who we’ll call Phillip, lost his job because of ill health. He had several low debts that were not high priority. Despite this, Phillip was called frequently from highly aggressive debt collectors until he felt extreme distress and actually attempted suicide. Phillip’s situation represents the emotional state of many people who get in over their heads with debt they never expected to take on in the first place or believe they would be easily able to repay until a drastic, unexpected change in their finances took place..
    A Brief List of How Debt Impacts People’s Lives
    - Creditors are not always sympathetic about genuine tragedies debtors are faced with
    - Some people are unable to cope, feeling as though they are in crisis and their health is subsequently affected
    - Family arguments arise over debt and the strain it puts on families
    - Some people seek treatment for stress, anxiety and depression related to the strain debt puts on their health
    - The stress from debt and ill health leaves some unable to get and hold down jobs
    - Debt stress can affect mental health and change people’s lifestyles towards unhealthy habits
    If you are facing debt, whether from ill health or not, you owe it to yourself and your family to seek out a solution that can help you. You can learn more about Debt Management Plans or IVAs (Individual Voluntary Agreements) online or, if the situation you face is extremely dire, learn about Bankruptcy.
    You need quality advice from an expert professional. Don’t hesitate to get the help you need because no one wants to see you enduring situations such as those described above.
    Debt from Ill Health is More Common Than You Think
    One of the more common problems that people end up finding themselves in debt due to is ill health. Unfortunately, the stress from debt also ends up being a contributing factor to health problems which creates something of a circle of negative effects.
    Some of the common methods of UK debt management which may help solve ill health debt problems are:
    1 – IVA (Individual Voluntary Arrangement)
    1 – Debt Management Plan
    3 – Protected Trust Deed (for residents of Scotland)
    4 – Bankruptcy
    There are so many reasons that people experience debt due to ill health. Here are a few reasons that you might not have thought of:
    - In times of illness, finances are often understandably neglected
    - A sudden drop in income is not unusual since it may lead to a loss of work
    - The cost of transport for treatment can increase debt
    - The cost of respite care can also raise debts
    - Situations of deteriorating health from illness due to the process of handling debt in the first place can make dealing with the debt even more difficult
    - Food required for special diets or medicines needed to treat illness can lead to debt
    - Ill health can force clients in physical labour jobs to lose work or stop working entirely
    - Making payments on debts can drastically reduce the disposable incomes of those suffering illness
    - Care service cost can sabotage the budgets of those with ill health
    - Mental health related issues may mean those suffering are unable to work for significant periods of time
    Job Options for Those Suffering Ill Health and the Employment Market They Face
    Debt problems can pile up quickly as a person adjusts to the onset of ill health. Even those who can find employment, if they have a small income change or an extra demand placed on that income, they could find themselves in a debt problem. Merely being in ill health can also keep people from being able to get a job. Despite strict employment laws in the UK, people suffering from illness many times have difficulties because they are unable to work standard hours.
    Debts from ill health can also occur when a there is a change in income due to the loss of a benefit or a partner’s earnings. Those suffering from illness who have a long term dependency on benefits it can be even more difficult to resolve this debt, especially fi they are receiving disability benefits and essentially at the mercy of the government for their income.
    In the UK, the problem for some people who struggle with debt due to ill health is that they do not qualify for any Disability Living Allowance (DLA) due to technicalities in the law.
    This can be a real struggle for those battling illness, but depending upon your payment history and whether your ill health is prone to be long or short term, you can sometimes get your lender to agree to:
    - The lender may agree to reduce your payments over a period of time you both agree to
    - The lender may charge interest for a shorter period of time if you have a repayment mortgage instead of having you pay both capital and interest
    - The lender may extend your mortgage’s term in order to lower your payments
    - The lender may offer you a ‘payment holiday’
    Some reasons that people end up in debt can be:
    - General financial over commitment
    - Poverty
    - Loss of work
    - Illness
    - Breakdown in their relationships
    Debt and Illness – What if You Are In Debt Already?
    Depending on your track record of making payments in a timely manner, if you have fallen behind then your lender can suggest ways to pay off the arrears gradually along with your usual payments. If you are unable to meet the extra payments you may be able to have them either delayed temporarily or added onto your loan.
    You will want to pay as much as you can afford each month because keeping up with your usual payments (even if they are not in full) proves you are committed to repaying what you owe. If you can prove you are committed then your lender is likely going to be more sympathetic to your plight and possibly minimise the arrears charges, as well.
    Some anonymous case studies (to protect personal identities in this sensitive aspect of life) regarding debt for those who suffer from ill health are featured below along with some examples of situations that cause this type of debt:
    - Debt from ill health affects people’s emotional states by compounding severe stress
    - Ill health renders many people unable to work
    - Debt can be linked to uncontrollable physical conditions such as epilepsy
    - Debt is often linked to suicide
    Debt From Epilepsy
    This is the case of a woman who bought a car with hire purchase whom we will refer to as Laura. Right after purchasing this car her doctor diagnosed her with epilepsy and Laura could no longer drive. Obviously, she decided she would need to sell this car. Upon informing her finance company of this decision, they told her she would not be able to sell the car privately and that, instead they would sell the car on her behalf then let her know what the remaining balance she owed would be. Later, the company informed Laura that she owed £8,000 plus £3,000 in insurance premiums for policies that could not be cancelled even though they covered risks related to not being able to pay on her loan even though this insurance was to be discharged. As you can see this situation would be incredibly difficult to cope with, not to mention highly unfair, but these are real life situations that people like Laura in the UK face when struggling with debt from ill health.
    Ill Health Leaves Man Unable to Work
    This case involves a man whom we will call Robert who lived on a very small income and therefore used credit cards in an effort to meet his basic essential needs. This results in £25,000 in unsecured debt on a total of six separate credit cards. Robert became unable to work due to his poor health, becoming more and more stressed by the debt accumulating due to this. He suffered a breakdown specifically tied to his inability to repay on his debt. Robert’s situation is also not unusual in the UK, sadly.
    Debt Leads to Emotional Problems
    A woman whom we will call Harriet had a hire purchase agreement for a car purchase. After two and a half years she defaulted after becoming temporarily unemployed. Harriet now lives with her parents and has a job once again. After becoming involved in a car accident that resulted in a fatality, Harriet was left with severe emotional trauma. On top of this, her mother suffers from ME. Harriet now must go to court due to defaulting on repayments, but three months after her default, she and her parents were receiving an average of twenty calls per day between 6am and 9pm. This greatly exacerbated Harriet’s emotional problems and her mother’s condition, as well. Once again, situations such as this are not entirely uncommon in the UK.
    Debt Stress and Its Ties to Suicide
    As extreme as it may seem on the surface, one man who we’ll call Phillip, lost his job because of ill health. He had several low debts that were not high priority. Despite this, Phillip was called frequently from highly aggressive debt collectors until he felt extreme distress and actually attempted suicide. Phillip’s situation represents the emotional state of many people who get in over their heads with debt they never expected to take on in the first place or believe they would be easily able to repay until a drastic, unexpected change in their finances took place..
    A Brief List of How Debt Impacts People’s Lives
    - Creditors are not always sympathetic about genuine tragedies debtors are faced with
    - Some people are unable to cope, feeling as though they are in crisis and their health is subsequently affected
    - Family arguments arise over debt and the strain it puts on families
    - Some people seek treatment for stress, anxiety and depression related to the strain debt puts on their health
    - The stress from debt and ill health leaves some unable to get and hold down jobs
    - Debt stress can affect mental health and change people’s lifestyles towards unhealthy habits
    If you are facing debt, whether from ill health or not, you owe it to yourself and your family to seek out a solution that can help you. You can learn more about Debt Management Plans or IVAs (Individual Voluntary Agreements) online or, if the situation you face is extremely dire, learn about Bankruptcy.
    You need quality advice from an expert professional. Don’t hesitate to get the help you need because no one wants to see you enduring situations such as those described above.

    Debt from Loss of Work

    Involuntary Job Loss and Its Effects on Your Finances
    In this article, we want to take a look at the problems faced when UK citizens are dealing with debt from loss of work or when they are feeling the effects of an involuntary job loss on their finances.
    Statistics show that loss of work can end up creating large, long term debt problems and have a negative effect on the probability of obtaining work in the future. Whether short or long term, work loss can trigger a family or household to enter into a severe debt problem and those problems could take years to resolve if one does not seek a debt solution such as an IVA (Individual Voluntary Agreement), Debt Management Plan or Bankruptcy.
    Four primary reasons for work loss are:
    1 – Cyclical
    These are periods when British goods and services are not selling well enough to employ the entire available workforce
    2 – Technological
    Job seekers remain unemployed because they do not have the necessary skills to be hired by potential employers
    3 – Structural
    Those seeking jobs have the skills to be hired but due to the location they live in they are not eligible for the work until they move, which they are unable to do without first having the jobs
    4 – Frictional
    Temporary unemployment, ie, people who are between jobs
    What can people do to reduce the effects of their debt from loss of work?
    One way you can protect yourself from stress is by taking out mortgage and rent insurance. Rent Insurance and Mortgage Payment Protection is intended to help you stay out of debt and avoid missing the mortgage payments due to work loss, unemployment or illness. If you have this insurance you can protect yourself from accumulating constantly rising debt. Being out of work or suffering serious illness can wreak havoc on your finances and in these instances, having Rent Insurance or Mortgage Payment protection can be the saving grace that keeps your family free from debt that would otherwise take years to fix and could never have been avoided in the first place.
    Nearly a tenth of all adults living the UK have seen their debt levels rising – that’s over 4.5 million people. While over half of those surveyed had factored the increased borrowing into their outgoings and were comfortable with their debt, over 40% had not prepared. That means almost 2 million adults slid into serious debt without having planned for it.
    Even though research shows that home and educated related expenses are high on the list, work loss remains a key trigger to individuals landing in debt and facing problems. Unexpected events like job loss or illness have been shown to massively reduce a person’s ability to keep their personal financial life in balance.
    Despite the fact that so many people believe they have their borrowing under control there are still two million adults in the UK who, when surveyed, admitted that they were suprised by the increase in their debts. The answer to this sort of debt dilemma is never to ignore the problem. That can increase not only the debt, but the growth of the debt as well. Those who worry that they are sliding into the red financially should get in contact with their lenders as early as possible to try and deal with the debt while it is not yet a massive problem.
    For those already facing serious debt, several options are available. A Debt Management Plan can save a smaller debt, but a serious debt that is over twenty thousand pounds will require an Individual Voluntary Agreement (IVA) in order to be paid down within a reasonable amount of time. Bankruptcy can be a viable alternative when the situation is dire. Be sure to investigate the best options for you and get the help you need before the stress makes things too difficult.

    Involuntary Job Loss and Its Effects on Your Finances

    In this article, we want to take a look at the problems faced when UK citizens are dealing with debt from loss of work or when they are feeling the effects of an involuntary job loss on their finances.

    Statistics show that loss of work can end up creating large, long term debt problems and have a negative effect on the probability of obtaining work in the future. Whether short or long term, work loss can trigger a family or household to enter into a severe debt problem and those problems could take years to resolve if one does not seek a debt solution such as an IVA (Individual Voluntary Agreement), Debt Management Plan or Bankruptcy.

    Four primary reasons for work loss are:

    1 – Cyclical

    These are periods when British goods and services are not selling well enough to employ the entire available workforce

    2 – Technological

    Job seekers remain unemployed because they do not have the necessary skills to be hired by potential employers

    3 – Structural

    Those seeking jobs have the skills to be hired but due to the location they live in they are not eligible for the work until they move, which they are unable to do without first having the jobs

    4 – Frictional

    Temporary unemployment, ie., people who are between jobs

    What can people do to reduce the effects of their debt from loss of work?

    One way you can protect yourself from stress is by taking out mortgage and rent insurance. Rent Insurance and Mortgage Payment Protection is intended to help you stay out of debt and avoid missing the mortgage payments due to work loss, unemployment or illness. If you have this insurance you can protect yourself from accumulating constantly rising debt. Being out of work or suffering serious illness can wreak havoc on your finances and in these instances, having Rent Insurance or Mortgage Payment protection can be the saving grace that keeps your family free from debt that would otherwise take years to fix and could never have been avoided in the first place.

    Nearly a tenth of all adults living the UK have seen their debt levels rising – that’s over 4.5 million people. While over half of those surveyed had factored the increased borrowing into their outgoings and were comfortable with their debt, over 40% had not prepared. That means almost 2 million adults slid into serious debt without having planned for it.

    Even though research shows that home and educated related expenses are high on the list, work loss remains a key trigger to individuals landing in debt and facing problems. Unexpected events like job loss or illness have been shown to massively reduce a person’s ability to keep their personal financial life in balance.

    Despite the fact that so many people believe they have their borrowing under control there are still two million adults in the UK who, when surveyed, admitted that they were surprised by the increase in their debts. The answer to this sort of debt dilemma is never to ignore the problem. That can increase not only the debt, but the growth of the debt as well. Those who worry that they are sliding into the red financially should get in contact with their lenders as early as possible to try and deal with the debt while it is not yet a massive problem.

    For those already facing serious debt, several options are available. A Debt Management Plan can save a smaller debt, but a serious debt that is over twenty thousand pounds will require an Individual Voluntary Agreement (IVA) in order to be paid down within a reasonable amount of time. Bankruptcy can be a viable alternative when the situation is dire. Be sure to investigate the best options for you and get the help you need before the stress makes things too difficult.

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