IVA Advice & Solutions

Loss of overtime
Because it is so easy to obtain credit, many people find that they have supplemented their lifestyle through personal loan and credit card borrowing. The repayments for this borrowing may have been no problem when overtime was plentiful. However, in today's job market, many employers are cutting overtime or banning it all together. This can have a significant impact on the amount of money people are able to bring home in their pay packet. When this starts, the most common reaction is to struggle on (perhaps borrowing more from creditor cards to make a loan payment) in the hope that times will get better and overtime will be re-instated. This is not the answer!

Pregnancy
The birth of a new child is a wonderful experience. However, in today's world it is usual for both male and female partners to be working to support a certain standard of living. Very often, a significant part of the household income is lost because of maternity leave. The normal reaction therefore is to increase borrowing to try to make up for this loss. Even on both parties returning to work, it can be extremely difficult to support both the additional borrowing and additional expense of the baby. Debt problems then start to mount and spiral.

Lower income due to divorce or separation
Very often while in a relationship, one party will take on debt in the form of loans or credit cards. The repayments of this do not seem a problem as there may be two household incomes and the burden of the household expenditures can be shared. However, if the relationship breaks down, one party may be left carrying the burden of the debt. This will then immediately be too much to cope with and problems start.

Financial difficulties due to ill health
If you find yourself off work due to ill health, it may very well be the case that your income will fall. Your employer may make sickness payments, however, you will lose additional income such as overtime. It may be possible for you to claim on insurance policies associated with your loans. However, if this is not the case, debts can quickly become out of hand.

Failed Business
Many sole traders and small business owners may borrow to support their business activity. If unfortunately the business fails, they often then find themselves personally liable for these debts. It may be possible to find alternative employment, however, the income gained from this may not be enough to support both household expenditures and the debt repayments. The spiral of debt can then start unless proper action is taken.