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                          I for Income

                          The recession has hit everyone hard, as people lose their jobs and businesses as a result of the economic climate. The most important thing to remember during periods like this is to seek help from those best placed to give good advice, and, crucially, to ensure that clients no longer bury their heads in the sand.

                          One female client I managed to help had a husband who refused to face up to the problem. Mrs Green, married with one six-year-old daughter, had about £8,000 of debt. She was the sole breadwinner in the family, working about 16 hours a week. Her husband had lost his job in a factory months ago, but refused to sign on – claiming it was ‘a waste of time’.
                          He did acknowledge that most of the debt she had accrued was a result of him being out of work for so long. However Mrs Green told me she wanted to sort out the debt herself – and that she didn’t want a Debt Relief Order (DRO).
                          I was stunned when Mr Green suggested she sign all the debt over to him and he would just not pay it and pretend it didn’t exist. What I had to reiterate to him was that debt does not just magically disappear and the creditors won’t forget about it if you do nothing! After I had explained this again to the Greens, Mrs Green chose to go ahead with the service I was offering and actually deal with the debt – rather than acting like it didn’t exist.
                          Another couple I helped who could also be accused of burying their heads in the sand, albeit in a very different way, were Verity and John Jones. Both in their mid-fifties, the couple owned and ran a restaurant in London.
                          A combination of a downturn in business due to the recession and a recent hip operation for Mr Jones – severely restricting his ability to work in the restaurant – had seen them struggling to generate enough income. As a result, the Joneses had been resorting to their own personal credit lines in order to pay a multitude of suppliers, who were necessary to keep their business going.
                          Once I met with them and reviewed their situation, I soon discovered they owed more than £70,000 to unsecured creditors. The couple had ignored the problem, acting as though everything was fine and just borrowing and borrowing more to keep the restaurant running. As a result, they now owed more than £2,100 repayments each month.
                          Together, we managed to reduce their payment to approximately £300 per month. This enabled the couple to keep more cash-flow within the business (as the bulk of their business drawing had been to make payments to unsecured creditors).
                          The Joneses now have the chance to find out whether their business is sustainable in the current economy, as they don’t need to be siphoning off so much potential profit just to pay suppliers.








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