A large proportion of those who have become unemployed amid the recent troubled economic times are individuals who can ill-afford such a situation bec…
A large proportion of those who have become unemployed amid the recent troubled economic times are individuals who can ill-afford such a situation because they are already in heavy debt.
Commenting on the latest employment figures, chief executive of the Money Advice Trust Joanna Elson said 5.8 per cent of the 2.5 million out of work – 145,000 – were in “unpayable” debt at the time when they lost their jobs.
And this is getting worse, she said, adding: “Perhaps more worryingly, the same research found that of those who have been sacked or made redundant in the last three years, 12.9 per cent have unmanageable debt.”
For such people, trying to pay off what they owe or even keep it under some sort of control may seem a remote prospect.
However, for those owing £15,000 or more, the solution may lie with the use of individual voluntary arrangements.
They provide an alternative to bankruptcy by offering creditors a proposal of accepting a lower repayment, which would be paid over a five-year period.
Should three-quarters of those owed money agree, it will become legally binding and ensure any remaining creditors unhappy with the deal are obliged to accept it.
Among the unemployed who may need the most help could be a large number of public sector employees, with redundancies looming for many in this sector.
Chairman of the Recruitment Society Steve Huxham said this week that while some of those losing their jobs will have the “transferable” skills needed to get private sector posts, many will only have training specific to their public sector roles, which will be of little use to other employers.
By Joe White