About 25,000 more people are unemployed today in Northern Ireland than a year ago. That probably means that 25,000 people here will be trying to work out how to survive on much less money.
This is no doubt why the Department of Enterprise, Trade and Investment is paying for a helpline to advise people in how to deal with debt, which has just started operations.
Enterprise minister Arlene Foster, says: “The new service is the first publicly funded debt helpline based in Northern Ireland. It is staffed by local people and aims to provide a tailored service, to meet the needs of local callers.
“With many people across the entire social spectrum in Northern Ireland experiencing the impact of the current economic crisis, debt has become one of the most serious and damaging problems affecting our communities.
“advice4debtNI is another important part of the Northern Ireland debt remedy jigsaw. It is absolutely confidential and allows clients to take charge of their affairs from their own home. While it identifies those who may need further help, it also reduces the demand on face to face debt advice outlets, leaving those advisers with more time to devote to the most dependent clients.”
Sinead Murphy, a supervisor on the advice4debtNI service, reports that frequently people whose circumstances change find themselves falling behind on their credit card accounts and loan repayments.
As they begin to receive demands to pay these rising debts they want to know how best to respond.
“Don’t ignore the problem,” advises Sinead. “The creditors will not go away and the earlier you deal with your debts the easier it will be. Most creditors understand that people find themselves in financial difficulty and you may be surprised by the options available to you.
“A debt management plan is a possible option. If you have a reasonable amount of money available you can write to the credit card and loan companies you owe money to and ask them to accept a reduced payment. The only way to do this is by sending a breakdown of your income and expenditure. This shows your creditors that you are not refusing to repay your debts, but you just don’t have enough coming in to pay them the full amount.
“Don’t forget to request that the interest and charges are frozen also. A creditor does not have to agree to this, but many will.”
Another common question follows a fall in income, when workers are told they must work fewer hours. “If your income has dropped, the first thing to look into is whether you are entitled to claim any extra income,” says Murphy. “You may be entitled to extra working tax credits or other benefits if your income has dropped to a low level. You should contact your local benefits office and make sure you are receiving the maximum income possible.”
She adds: “If you do not have enough income to maintain your essential living costs, phone us for advice.”
Give up subbing
Nic Cicutti, author of the Which? guide ‘Make the Most of Your Money’ — published this week — says that, like alcoholics, people in debt have to begin by accepting they must do something.
“Admit you have a problem,” he urges. “Calculate what you owe and stop saving any money. Stop saving because what you are paid in interest is less than what you pay on anything you owe.
“Then ask for money back — anything you are owed from family or friends, or from the taxman. Always claim for everything you can. The benefits systems is so complex that probably a third of people don’t claim everything they are entitled to.
“In terms of paying back debt, you should always prioritise your debts. There will be some debts that are important and others that aren’t. For me, always protect the roof over your head. That is the mortgage or rent.”
The next priority, says Cicutti, are the debts where non-payment will lead to strongest legal action, which means taxes, rates and even the tv licence.
“The other thing you should do is always get expert advice when you need it,” he stresses.
“But never ever, ever fall for the firms that promise to help you pay off your debts more quickly, or to consolidate your debt. They are a scar on the finance industry.”
The A4E helpline can be contacted Monday to Friday, 9am to 5pm, on 0800 917 4607, or at www.advice4debtNI.com