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Dealing With Redundancy

Losing a job may be a stressful and emotional experience that compels an individual and their family to make drastic lifestyle changes. It might also have a negative impact on a person’s financial situation. As a result, debt levels may skyrocket. For many people, redundancy and debt go hand in hand, and it’s a major concern. We took a look at the process of dealing with redundancy.

Dealing With Redundancy – Its Effects

Financial redundancy, as well as the obligations that come with not receiving a regular paycheck, can cause problems in a variety of ways.

Inadequate funds to cover basic living expenses such as food, rent/mortgage, bills, and clothing.
Inability to make existing debt obligations, such as monthly credit card and loan payments.
It is possible that redundancy will have a psychological impact. These manifest themselves in terms of the stress they produce, as well as depression and other related disorders. Afflictions like this can be traced back to a lack of financial management. However, this is not always the case. It’s crucial to keep in mind that not every redundancy comes with a generous severance package. Not everyone will have enough time to look for alternative work.

Don’t Use Debt On Debt

When people strive to continue their current lifestyle after losing a job, problems frequently develop. Despite not having the same quantity of money coming in, this is the case. They may believe that fresh employment is on the way, and that any debts acquired may be paid off later. Sadly, this is not always the case. Many people believe that using credit is the only way to preserve their previous standard of living.

Research

Examine your financial situation. Speak with a knowledgeable financial advisor who is looking out for your best interests. You can then decide on the best course of action. Those who get a redundancy package as a result of losing their work may be able to use it to assist them reach an agreement.

Dealing With Redundancy – Living Costs

The loss of income that inevitably comes with redundancy can have a significant impact on living expenses. To make up for the shortfall, many people will turn to credit cards, loans, and overdrafts. It doesn’t take long for debts to accumulate, and with them comes greater difficulty in making monthly payments. Furthermore, it has been discovered that many people struggle to prioritise their bills after being laid off.

Prioritizing debts is also critical. Putting off mortgage or rent payments in order to pay off other debts, for example, could be disastrous. Failure to pay council tax can also result in a court summons and harsh penalties that could have an impact on your future. A county court judgment could be issued if you do not pay a loan or credit card company (CCJ). It’s critical to sit down and devise a strategy for dealing with debts, and to prioritise each one. A CCJ is awful, and it will show up on your credit report for six years, but losing your home is even worse. Examine your financial situation. Make payments a top priority. Make cost-cutting efforts whenever possible. Sacrifices are necessary. Not every monthly expense is necessary.

Be Proactive

An alternate course of action is to contact your mortgage provider to discuss whether any assistance may be provided by them. Your mortgage provider has a legal obligation to treat all of its customers equitably. This includes when you’re having trouble making payments, and they’ll talk to you about your alternatives. It’s critical that you recognise that there are other options for seeking assistance besides taking out credit.

 

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