Being in debt is a very harrowing experience and affects all areas of an individual’s life and affects their family as well. The level of debt varies from family to family, but the effects appear to be the same. People are suffering from distress and stress, depression and aggravation of illnesses, such as diabetes. We have also found that the level of communication is also a factor in how the families deal with their debt. Do couples talk about their debt, or is it hidden from each other? It appears to be important that the couples have talked about how the debt has arisen and if one person has created all the debt, that individual has “confessed” all of the debt that has been created. Debt can result in family trauma, for example separation and divorce, and there is hearsay evidence to say that 99 per cent of all bankrupts are either separated or divorced.
The debt that the couples get into often result from one particular event, such as the loss of a job, the birth of a child, moving to another area or the splitting up of a relationship. The family income is reduced and there seems to be a fantasy by some that the situation will improve quickly and thus they continue to spend at their previous levels.
From our experience the effects of what is perceived as a large amount of debt continues for a period of time, whilst the couples who have the debt try and find a way of reducing their level of debt. They struggle on, often taking out further debt to try and resolve their problems. There is a definite spiral of debt, which could lead to the splitting up of the family and the loss of the family home, if owned by the family. There appears a time that they come to the bottom of the pit that they are in and that is when they try to find support from an outside agency such as McCambridge Duffy.
McCambridge Duffy, a firm of Insolvency Practitioners, helps hundreds families each month by arranging Individual Voluntary Arrangements (IVA). An IVA is a contract between an individual and his creditors, which can reduce the amount of debt by means of paying a sum each month for a period of five years. An alternative is a one off payment, usually from the equity in the family home, which can again reduce the amount of the debt.
The IVA usually allows the family to pay off a percentage of the debt over a five year period. The family has to live within a rigorous budget, which does not allow for much deviation. From our experience, this does allow the family to regain financial control over their lives; which in itself allows for some of the tensions that have been created by the level of debt created to be dispelled.
McCambridge Duffy specialise in helping self employed individuals. Should your business be experiencing any financial difficulties call free on 0800 043 3328 where one of our highly experienced staff will be available to help you.