Debt Advice For Single Parents

Written by on August 10, 2012 in Money - No comments | Print this page

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It can be difficult being a single parent, trying to strike a balance between providing everything the children need and staying on budget. Sometimes credit can be a real lifeline when emergencies crop up or the weekly income just won’t stretch far enough. But debts can quickly mount up and become a real problem. It is especially hard when living on a fixed income and trying to keep the family on track can often take priority over repaying credit bills.

Act quickly

If debt is a problem, do something about it today. It can be tempting to forget about it because dealing with debt is a daunting task which can be quite anxiety provoking. But leaving it to mount up will only make matters worse and worrying about it can lead to depression. Draw up an action plan which will break the task into smaller chunks and help you to feel more in control of the situation. The action plan should include budgeting, looking at ways of generating more income, talking to creditors and getting help.

Budgeting

This is straightforward. Just make a list of everything that the family spends money on. This includes the priority items like rent and utility bills, grocery shopping, money for clothes and shoes and money spent on treats and entertainment. Remember to add in money for things that don’t happen very often such as Christmas and birthday presents. Finally, add in the money you owe. Now compare the grand total to the money coming in. If there is only a small difference, then you may be able to look at cutting back for a while until the debt is repaid. However, if there is a large gap between income and outgoings, you will need to take further action.

Generating more income

Think about how you could get more money. For example, are you getting all of the benefits that you and your family are entitled to? Is your child’s other parent paying the right amount of child support? Gingerbread is an organisation that provides advice and help to single parents and they have a range of advice factsheets on their website at www.gingerbread.org.uk. These include information on all of the different benefits available for single parents, advice on budgeting and also on issues such as child maintenance. Many of these benefits are available whether you are working or not, so it is always worth finding out more.

Look for work

If you are not already working, consider whether getting a job might help to improve your financial situation. Even working only a few hours a week could make a big difference although you will need to be mindful of the impact on your benefits. There is a very useful calculator at www.entitledto.co.uk where you can enter your information and find out what you might get if you go out to work. This is anonymous and you can try out lots of different scenarios to work out what situation would be best for you.

Talk to your creditors

It is best to speak to all of the companies that you owe money to and it is best to do this as soon as possible. If you really can’t face phoning them, then at least write to them or send an email. The vast majority of businesses have special plans in place to help people who are having trouble paying and you will certainly not be the first person in this position. Many companies will accept a much lower repayment amount if you agree to pay regularly and on time.

Get help

If this is something that you really can’t face doing, then it may time to seek specialist help. Many charities, like Citizens Advice, will help you to approach your creditors. They can also advise on whether it might be appropriate to set up an Individual Voluntary Arrangement (IVA) which is a more formal agreement. The Consumer Credit Counselling Service is a charity which provides free help to set up IVAs. They can also advise on whether a Debt Relief Order might be worth investigating; a DRO is a type of insolvency which is a step short of bankruptcy. Check their website at www.cccs.co.uk for free advice.

This article was written by Rachel Ford on behalf of one of the UK’s leading debt management and debt advice companies, the Debt Advisory Line.

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