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Being made redundant or losing your job is always stressful and upsetting and can massively affect your mental health. If you also have debt to worry about, it’s an even more difficult situation to get through, and you’ll no doubt be wondering what happens to your debt if you lose your job.

What should I do about my debts?

The first step is to list all your debts and the lenders you owe money to.

You can then sort the debts in order of priority – secured loans, mortgages, utility bills and tax bills are usually considered priority debts.

 If you think you’ll struggle to keep up with your repayments, it’s important to contact the companies you owe money to as soon as possible and update them on your situation. You may be able to agree to an informal arrangement with some of your lenders.

Is Breathing Space a good option for me?

It may be worth considering Breathing Space if you’re worried about your debts.

Breathing Space is a 60-day window where your lenders can’t take legal action or charge fees or interest on your debts.

We have more information about Breathing Space available on our website, or you can speak to one of our advisers for free to find out more – call us on 0800 316 1833.

Creating a budget

Creating a budget is crucial as it will show you exactly how much money you need to spend each month.

Where possible, you should try to keep up with bill payments to avoid going further into debt and accruing more creditors.

If you have emergency savings, it may be worth using this, or if you have any form of insurance that protects your payments, this can also be used to keep up-to-date.

What support is available?

If you create a budget and think you’re going to struggle to afford your essential monthly costs, we’d recommend checking BudgetSmart to see whether you’re able to reduce your costs or earn any extra income or benefits.

If you feel like you need free, confidential debt support, call us on 0800 316 1833. We’re open from 8am – 8pm Monday to Friday and 9am – 3pm on Saturdays.