little-ginge

I have a friend who has heard 'on the grapevine' that his section might be being made redundant shortly. Now I'm not sure if he is going to be eligible for any sort of redundancy package, but I know he doesnt really have any savings behind him.

He is now concerned about the debt he has on a loan and a credit card - he has always paid the monthly installments, but rather foolishly didnt get the payment protection thing on either...

I don't know how to advise him, having never been in a redundancy situation ( yet!).. what can he do with regard to payments etc? Do you think the loan & credit card company will let him come to some sort of arragement? If so any idea what they suggest??

I'm not after criticism of his financial state, just advice and suggestions, which I can pass along, please!!

Thanks

phil_wrx

iTrader: (2)

has he got no service in, that why he will get no redundancy?

little-ginge

I dont think he has been at the company long enough to qualify - or if he does it wil be pittance

Lee247

Worth contacting them. Let them know the facts. The ways things are at the mo', I would imagine they are getting loads of calls like this.

Good luck to him

phil_wrx

iTrader: (2)

acas are a good source of info

Turbohot

LG, he can talk to his loan provider, and the credit card company. The chances are they may not do anything about it, with him having no protection plan in place. With mortgages, people can go for "interest only" option for a while. But not sure how it works with credit cards and loans

There are some debt management companies knocking about these days. You see them on Internet a lot. They seem to get all the interest frozen from every debt, set just one regular payment to themselves from you. Such companies can be an option, but it's possible they are like another catch22 for obtaining as much as possible from the client in adverse circumstances? May be, he can research such companies a bit. Perhaps they can be a solution to him until he finds a new job.

swampster

iTrader: (1)

It takes a great deal of neglect for a lending company to act proactively to recover debt... so I wouldn't be too worried about a bunch of guys just turning up out the blue to take all his worldly possessions...

If it is becoming increasingly obvious that he is going to be affected by redundancies and he is unable to meet his financial obligations he needs to speak with the crediting company, and try to come to some kind of arrangement. Most will be resistant to a degree, however if there is no alternative they will usually agree to some solution.

Basically as a rule of thumb it works as such..

Take care of Primary Debts - These are things like Council Tax anything payable to the governement/state/council etc... i.e. stuff they can lock you up for by not paying.

Take care of secondary outgoings - Utilities, Mortgage, food etc

Any cash left over can be used to furnish tertiary debts - general creditors, credit cards etc, you have to be seen as being fair to each of your creditors.. but as long as some agreement is made initially and stick to it all should be ok.

Obviously the old credit rating will take a bit of a beating... but not a lot can be done about that.

If he is unsure about how to deal with the creditors, get sombeody else to do it for him... you can get professional help for just this kind of thing. I don't mean these 'miracle' offering debt management companies, but rather organisations such as the Consumer Credit Counselling Service, and to a lesser extent CAB will offer assistance for free.

little-ginge

Cool - thanks guys, i wil pass it on

tath

As long as he Doesn't Know About His Impending Redundancy, he should be able to add protection onto his policies

jaytc2003

iTrader: (1)

tell you friend to look at an insurance policy for redundancy protection.
You can obtain a high % of your monthly wage back if you do get made redundant. As long as they havent been told they are redundant then there will be no probs getting a policy. for instance for less than £40 per month you can get just over £1400 per month

jods

My advice.

Take out redundancy protection insurance NOW.
He has not heard officially so he effectively knows NOTHING about it.

Most insurances don't become active until 3 months after you start paying in - If he gets the R bomb within the 3 months - DO NOT CLAIM. Get another job - any job.

I pay £80 a month protection. If I am made redundant it pays out £1400 a month for up to 2 years. Enough to pay the mortgage and a bit towards bills.

davegtt

Worse comes to worse and he loses his job, contact the lenders, they want their money back so its in their interest to do something like stop the interest, give him a month or so break to find a new job and catch up etc... No point in letting him go bankrupt and getting nothing back in terms of what theyve lent out. Same for an IVA (Individual Voluntary Arrangement).

wagrain

This is the way to go
Maybe not morally correct, but perfectly legal.

Devildog

Good advice

If it does happen to him, then provided he has a good payment history with his loan and card providers, they will probably agree to put him into a repayment arrangement - possibly with interest frozen. What he must do if made redundant is talk to them as soon as he can, rather than waiting for them to chase him up.

Tell him to stay well clear of any of these tossing "debt consolidation" type companies that advertise on TV and in the press/web offering "help in these hard times". The lenders will do that themselves in house, without the added expense of a third party leach.

Oh, and he should start looking for another job now, just in case, and beat the rush, so to speak.

Cocker

iTrader: (3)

Best advice would be that if you get made redundant, take it on the chin, and get another job straight away. Plenty jobs out there even if its something you dont want to do.

Question - would you rather flip burgers or have you house repossessed? I know what id do

nixxon

Personally, I would , and have, make food and shelter a priority , before paying tax of any sort. They can lock you up, but it ain't likely! It takes a couple of years for council jobsworths to send the bailliffs round.

swampster

iTrader: (1)

Well that's just the way most agencies/debt management companies used to work in how they were grouped, however looking at the CCCS website now it lumps all the Primary & Secondary debts into one group.. becoming priority debts, the rest.. ie. credit cards/loans etc are non-priority debts.

Creditors / Collections - Money Advice and Information - CCCS

BTW I wasn't advocating paying Primary and not paying Secondary, my post states to take care of both, and any money left afterwards (no matter how small) towards the tertiary stuff..

P1-Brad

Some things worth considering in this article if he does go down the redundancy cover route ...

Avoid Rip-Off Redundancy Insurance - 22/09/2008

Worth remembering that it's a similar policy to PPI, and we all know what a waste of money that has proved to be for a lot of policyholders.

It's certainly not for everyone!

Scooby Snacks 23

They're starting to get tougher though:
More Pain For Homeowners In Debt - 29/10/2008

mart360

Secondary creditors can be reasonable, however some (bank funded!) can be the most unhelpfull, mean and nasty bunch you could ever come accross.

I had a loan once with defaulted due to redundancy. Despite me contacting te company in question and making reduced payments, they sold the debt on in record time!!

The company who they passed it onto was the most agressive, threatening!

bunch you could ever come accross. For 18 months they made my life very miserable

Mart

KiwiGTI

Some councils are quite aggressive - Westminster and Brighton & Hove are pretty quick to send in bailiffs and follow their processes to the letter. Something like 3-4 months since you miss your first payment. (if paying monthly)