Insolvency advice can help individuals decide what to do if an interruption of their income, redundancy or job loss leads to having insufficient funds in the bank to service all of their outgoings.
This is an ongoing concern at all times, but in 2020 has been exacerbated by the Coronavirus pandemic, leading to an “unprecedented debt crisis” unless urgent action is taken by the UK government.
That’s according to StepChange, the debt charity, which published research in November estimating 1.2 million people in the UK are now in severe problem debt due to the impact of COVID-19.
A further three million are at risk of falling into problem debts without help from the government.
Sleepwalking into severe debt
In all, the amount owed by Brits on household borrowing and arrears has gone up by 66% since May, an increase of £4.3 billion to £10.3 billion in total.
StepChange CEO Phil Andrew said: “This report paints a picture of a nation sleepwalking into a debt crisis.
“Despite a bold initial reaction to the pandemic, the government and financial services sector’s toolkit of responses has not evolved, and the result is a spiralling number of people being plunged into debt due to COVID-19.”
How personal insolvency advice can help
If redundancy or other COVID-related income losses have left you in a dire financial situation, personal insolvency advice can help you to decide how to proceed.
Don’t wait until there’s nothing left in the bank – the sooner you take action, the better the chances of finding a positive solution.
For example, an individual voluntary arrangement can wipe out a percentage of your debts, allowing you to pay off what’s left from your savings and reduced income.
It’s important to do this as soon as possible, while you still have your rainy-day fund left, whether it’s enough for 3-6 months or just enough for 3-6 days.
To find out more, contact Crawfords today to speak to a member of our team, and we can start working towards a more stable financial footing for you as we move into the new year and beyond.
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