Debt from Ill Health

Introduction

 

The UK Insolvency Debt Advice Service is a national debt advisory service for clients seeking debt advice and debt management solutions. The service has existed since 2000. The UK Insolvency Debt Advice Service's have a team of highly trained advisers providing advice to clients with debt from ill health.

 

• Debt from ill health: A common problem.
• There are many common factors for debt from ill health
• The employment market and job options for those with ill health.
• Common reasons for being in debt.
• Debt and ill health - What if you're already in debt?
• Case studies with client with debt from ill health.
• Impacts of debt on clients

Debt from ill health: A common problem

Debt from ill health is one of the most common reasons for people calling The UK Insolvency Debt Advice Service. As clients are unable to work or are reliant on benefits then ill health can cause debt problems in a number of ways. Debt issues are also a major contributing factor to health problems. We are pleased to offer advice to clients suffering debt as a result of ill health in a number of ways

We can generally advise on the following UK debt management procedures to solve debt problems due to ill health:-

1. Debt ManagementPlans
2. IVAs (Individual Voluntary Arrangements)
3. Protected Trust Deeds (for clients with debts in Scotland)
4. Bankruptcy advice
5. Administration orders
6. Budgeting and general money advice

Our debt advice teams will spend extra time with clients suffering with debt from ill health because we understand the extra-difficult time they experience. The staff at the helpline do not want to see clients struggling with serious debt problems that are brought om by ill health. In order that we can provide best advice to these clients with ill health the advisors are specially trained in welfare benefits. To this end the debt advisers keep up to date on all legislation and debt solving procedures.

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There are many common factors for debt from ill health

Money Advice Direct is an established debt advice service. We understand that debt problems are varied. That is why the debt advice service now on offer can remedy virtually all debt problems without the need for clients to be forced into bankruptcy. The money advice team has identified the most common situations that can lead to debt problems for people with ill health as the following:-

• Due to a sudden drop in income.
• Financial concerns tend to be neglected at times of ill health.
• Resolving debt problems can be more difficult with clients with deteriorating ill health due to the process of dealing with debt.
• Some clients get into debt because they have to cut back on expenditure related to their ill health.
• Debt from ill health can be caused from the cost of respite care
• Debt from ill health can increase due to the cost of transport for treatment.
• The use of medicine or food for special diets can be expensive and lead to debt for those with ill health.
• Making debt repayments drastically reduces disposable income for clients with ill health.
• Clients with ill health may have to incur the financial cost of carers.
• Ill health can mean clients with physical vocation may be unable to work.
• Mental health related problems may force clients to be signed off work for long periods.

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The employment market and job options for those with ill health.

Debt problems can rapidly accumulate during the process of adjusting to the onset of ill health for many people. Even if clients find employment, even a small change in income or an additional demand on income could trigger debt problems. Unfortunately having ill health can exclude some from getting a job. Although there are strict employment laws in the UK clients with ill health often have debt problms because they are unable work normal hours

Sometimes debts can occur following a change in income, such as the loss of a benefit or partner's earnings. For clients with ill health a long-term dependency on benefits will make debt far more difficult to resolve. Being in receipt of disability .

The problem in the UK is that in some clients suffering from debt from ill health do not even qualify for any DLA (Disability Living Allowance).

If clients are struggling to make the payments due to ill health it cause debt problems.

Depending on your payment history and whether your difficulties are likely to be long or short term, your lender might agree to:

• reduce your payments for a set period
• charge you interest only for a while, if you've got a repayment mortgage (usually you pay capital and interest)
• give you a 'payment holiday'
• extend your mortgage term to reduce your payments

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Common reasons for being in debt:

• Illness
• General over commitment
• Job loss
• Poverty
• Relationship breakdown

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Debt and ill health - What if you're already in debt?

If you've already fallen behind, your lender will suggest a way to pay off the arrears gradually, alongside your usual payments. If you can't meet the extra payments, you may be able to delay them for a while or add them to your loan. Again, it depends on your track record.

Pay as much as you can manage every month. Keeping up regular payments (even if they vary) shows that you're committed. Your lender's more likely to treat you sympathetically and you'll minimise the arrears charges too.

Money Advice Direct provides a national debt advice service. The trained money advice advisers advise on wide variety of debt problems. Our debt advice team will work with clients in order to free them from debt. Debt problems are so varied and that is why Money Advice Direct debt advice service is the forefront of the advice sector.

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Case studies with client with debt from ill health

• Debt from epilepsy
• Unable to work from existing ill health conditions.
• Debt effecting clients emotionally.
• Debt and suicide

Debt from epilepsy
An adviser saw a client who bought a car with hire purchase. Shortly after purchasing the car she was diagnosed with epilepsy and was unable to drive. She decided to sell the car and approached the finance company, who told her that she wouldn’t be able to sell the car privately -they would sell the car on her behalf and let her know the balance she owed. She was then informed that she owed approximately £8,000 plus £3000 she had borrowed, and paid, in insurance premiums for policies which were not cancellable despite the fact that the covered risks relating to non-payment of the loan, and breakdowns to the car, were to be discharged.

Unable to work from existing ill health conditions
An adviser saw a client who has been living on a very low income; as a result he has used credit cards to meet his essential needs. As a result he now has £25,000 of unsecured debt on six different credit cards. The client has been unable to work due to ill health and he has become more and more stressed due to his situation. He has now suffered a breakdown due to his inability to repay his debts.

Debt effecting clients emotionally
An adviser saw a client who had a hire purchase agreement for a car purchase. The client defaulted after two and a half years when she became temporarily unemployed. The client is now working and she lives with her parents. The client was involved in a fatal car accident, which left her with emotional problems. Her mother suffers from ME. Due to defaulting on repayments the client now has to go to court. However, for the three months following the default both the client and her parents were harassed with phone calls averaging some 15-20 a day from 6.30am to after 9pm. The effect of this has been to exacerbate the client’s emotional problems as well as her mother’s illness.

Debt and suicide
An adviser saw a client who had lost his job due to ill health. The client has several, relatively small non-priority debts. The client has however been subjected to frequent and aggressive calls from the debt collector. The harassment has made the client feel extremely distressed and caused him to attempt suicide.

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Impacts of debt on clients

1. Not coping and under stress so health is affected
2. Some clients say they cannot cope and feel in crisis and it affects their health
3. Arguments in the family are caused by debt
4. Some clients are seeking treatment for stress, depression and anxiety from their GP for their debt is affecting their health
5. Difficulty keeping jobs
6. Coping strategies
7. Effects on mental health and lifestyle
8. Creditors not always sympathetic

Ill health creates debt problems due to many reasons. Money Advice Direct's advisers are highly experienced advisers and are able to empathize with the life changing situations illness can introduce. Clients suffering from ill health will be pleased to be able to access the service by either calling 0800 074 6918 or by logging onto www.insolvencyhelpline.co.uk.

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