The human cost of the unemployment figures

Although the unemployment rate is slowing, redundancy is still worrying many families as they don't know how they will cope. Previously, we all thought it would not happen to us which meant we never put funds aside - for most of us, there was no safety net.

My concern is how people who do lose their jobs will motivate themselves into getting back to work, having had rejection time and again when applying for jobs. Some firms don't even acknowledge the applicant's letter.

I also fear many will not address their debt issues and will often ignore the fact that they have a serious debt problem growing. Some will, unfortunately, drop into depression or turn to alcohol, gambling or even crime in an attempt to solve their debt problems.

Many will eventually find new jobs but some will not match or improve on their previous salaries and as a result thousands will fall into debt. From this, a segment will end up proposing either an individual voluntary arrangement (IVA) or go bankrupt.

There will also be others who will not be able to pay their mortgages and who will eventually lose their home. The high unemployment figures will have an impact on both the insolvency and house repossession figures.

Creditors also need to be more understanding and sympathetic towards borrowers who find themselves suddenly out of work - and should take note when someone is a ‘can't pay’ case instead of a ‘won’t pay’ case.

Debt can consume your life. These people need support from their families, friends and creditors, both emotionally and financially.

They also need to have clear goals on how they can manage their debts. The best way to start is to draw up a budget, prioritise the debts that need to be paid first (such as mortgage and rent), followed by utilities.

It is a clear fact that once you get control of your debts you regain control of your life.

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Mike Thomas is the Moneywise Debtwizard

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