Worried about personal debt? Get free advice

Giving Back: David Powles, Norfolk Community Law Service

It’s based on survey evidence that the average person could only pay their mortgage or rent for around two months should they find themselves unable to earn a wage. For people who run their own business, things can quickly take a downward turn.

The debt traps

Entrepreneurs and business leaders know that while the rewards of having your own company may be higher, the personal risks can be significant too.

One minute you can be flying – investing capital, business growing, paying yourself a good wage and/or dividends, all seemingly right with the world – and the next, something happens to send your personal fortunes sharply nose-diving.

There are plenty of hard-working businesspeople, in seemingly high-flying jobs and who appear to have a good lifestyle (well dressed, driving a decent car, working in high-end venues), who are actually living with ‘hidden debts’. These may have become normalised, but if you’re living off personal credit cards to help keep the business finances afloat, juggling that soon becomes increasingly stressful and difficult.

Often directors will invest their own money into their business, or take out business loans secured against their home, to purchase vital company assets. If those loans can’t be repaid, or if lenders call in their debts early (as happened during the 2008 economic crash), that’s possibly your home gone.

At Norfolk Community Law Service, helping people out of their personal debt problems is a large part of our day-to-day work – and we do it for free! Our specialist caseworkers have the ability to deal with large-scale and complex debts, often across multiple lenders.

So, don’t bury your head in the sand, as so many people sadly do, get expert advice.

Free expert help

If you are worried that your personal debts are starting to creep up, there are plenty of not-for-profit organisations and charities like ours that can offer free specialist guidance on what to do and what all your options are.

Tip: An Individual Voluntary Arrangement (IVA) – an agreement with your creditors to pay all or part of your debts – only works for some people in certain circumstances. They don’t come for free and they won’t ‘make the debt disappear’.

If there are vulnerable people or other dependents at home, another tip is to make sure you ask for advice on what support you are entitled to. Literally millions of pounds in unclaimed benefits sit in government coffers because people don’t know about them. It’s also worth finding out what rights you have around housing help should you suddenly run out of the means to pay your rent/mortgage.

The key is to act now – don’t wait until your situation becomes a crisis (although we’ll still help you if it does). We know personal financial problems can feel humiliating, but don’t panic and know that there is plenty of support available to help you get back on track.