Life Changes

A significant change in your situation is one of the most common causes of financial problems.

Often life changes happen quickly and through no fault of your own. Whether you’ve lost your job, are suffering from ill health or you’ve separated from your partner, changes like this can mean that you struggle to pay your household bills and debts. If this happens it’s important to get debt advice as soon as possible.

Having to adjust to such a financial change can be difficult, even if it’s only going to be for the short term.

This section will provide you with help and practical advice to help improve your situation based on the most common types of life changes we come across.

If you’ve got a specific question that you can’t find an answer to, please contact us and one of our expert advisers will be able to help you.

Bereavement

The death of someone close to you can have a lot of implications on your financial situation and often creates a lot of uncertainty around what happens to the person’s debts or assets when they die.

We know that it’s very difficult to cope with the financial implications when a loved one dies. Our advice will cover all the basic information you need to know.

Unsecured debts

If a person dies and leaves behind unsecured debts (finance like personal loans and credit cards) what happens to these will depend on whose name the debts were in and whether the person had any assets (like investments, savings or a house).

If the debts were in their name only

If the debts were only in the name of the person who has died, then these debts will either:

  • Be written off if the person didn’t have any assets, or
  • need to be repaid if the person has left an estate (this could be anything from savings to a share in a house).

If your husband, wife or civil partner has died and they had a debt that was in their name only, you won’t become responsible for it.

If they left a will, any beneficiaries named in it will only receive their inheritance once funeral costs have been covered and debts have been repaid.

If the debts were joint with someone else

If someone else was named on the credit agreement they will become responsible for repaying the full amount of the debt.

A credit card will only ever be in one name but your credit card provider may allow you to have a second card for your partner or someone else to use. If someone else’s name is attached to the card, they will be a second card holder. In these cases the second card holder won’t be responsible for paying any of the debt spent on either card.

The death of your partner can often have a big impact on your financial situation if it means there’s less money coming in.

A few points to remember…

  1. When someone dies, it’s important that you notify their creditors about the situation. This should be done in writing, briefly explaining whats happened and letting them know you’ll be in touch later to find out what else needs doing.
  2. Creditors will normally be sympathetic as long they’re informed early and you keep them updated.
  3. A person’s estate is made up of any money they have in bank accounts or savings, any assets they have (like cars, caravans, antiques or jewelry) and any property they own. This could include a house that’s in their name or one that’s jointly owned with someone else.
  4. Always check to see if the deceased person’s debts are covered by a life assurance policy (which might repay a mortgage), personal protection insurance (which might cover loans or credit cards) or if they’re entitled to a ‘death in service’ payment from a pension or employer (which would provide a lump sum of money).

Estates

A person’s estate is made up of their money (including any insurance pay outs), investments, any property they own (or jointly own) and their possessions.

The money in their estate will be used to cover any funeral and administration costs first. If there’s any money left after this it’ll need to be paid towards any debts the person had.

In some situations if there’s money tied up in a property the creditors could ask for the house to be sold and the money repaid from the sale. If you don’t want the house to be sold then you would need to come to an arrangement with the creditor to repay the debt at a rate you can afford.

Most unsecured creditors will normally write off a debt (like a personal loan or credit card) if there’s little or no money left when a person dies. They’ll normally only pursue the debt if there’s a large estate.

Divorce and Separation

Going through a separation or divorce can be stressful and often means your financial situation is affected.

Any joint debts you have with your partner will have joint and several liability. This means that, if your partner can’t make payment to the debt, you will need to repay the full amount.

If you don’t have any joint debts you can get a ‘notice of disassociation’. This removes any financial link with your ex-partner on your credit file. To do this you need to contact one of the credit reference agencies who can remove this link.

Housing and Income

If you’re renting a property you’ll need to inform the landlord that the tenancy agreement needs to be transferred into your name only.

If you’ve got a joint mortgage you may want to seek legal advice before you decide what will happen to your property.

If your separation means you’re now the only adult in the property, make sure you tell your local council as you’ll be entitled to a 25% discount on your council tax.

Separation will usually affect your income and living arrangements. This could mean that your benefit entitlement changes. You can use our free benefits checker to find out what benefits you can claim and the amounts you’re likely to receive.

Children

Separation can be hard on children. The Child Maintenance Options website has a variety of tools and guides to help you and your children deal with the separation.

You and your ex-partner will also need to arrange child maintenance. Whenever possible it’s always better to try and arrange a family-based agreement. Find out more about the benefits of a family-based arrangement on our child maintenance page.

Help and Advice

Divorce Aid is an independent organisation of professionals who can provide divorce advice to anyone in the UK.

Separation often means your household income will dramatically reduce so you may be struggling to manage your household bills along with any debts you may have.

If need debt advice or information on dealing with your debts contact us today.

Health

Being ill or having an injury that affects you for any length of time can have a big impact on you financially.

The following information might be helpful if your situation has changed because of illness or injury:

Benefit Entitlement

Use our online benefit checker to see if there are any additional benefits you can claim. Along with illness related benefits such as statutory sick pay, you may be entitled to money to help pay your rent or council tax.

Disability Living Allowance

If your condition is long-term, you may want to consider an application for Personal Independence Payment. You can make a claim by speaking to the Department for Work and Pensions.

Government mortgage schemes

If you’re a homeowner, you might be able to apply for help with your mortgage payments. Read our information on government mortgage schemes for details on whether you can apply.

Payment protection insurance (PPI)

If you’ve paid for payment protection for any of your debts, check if you can claim on them. Usually this insurance will pay your normal monthly payment for you.

If you would like some advice when it comes to your financial situation, we are happy to help.

Maternity

Although a baby is a welcome arrival, it can put a financial strain on your family.

Maternity can lead to debt problems, whether it’s because your income is reduced or simply the cost of another mouth to feed. But our debt advice can help you work out a way to manage your household costs and your debts.

If you’re going on, or have just started, maternity leave and you’re struggling to make payments to your debts we might be able to help you set up a debt management plan. This will help you make reduced payments to your debts until you go back to work.

You might also find some of the following tips useful if you’re struggling with the cost of a new arrival.

Benefit entitlement

Use our benefits checker to make sure you’re claiming all the benefits you’re entitled to. You’ll be able to claim child benefit when your baby is born and you may also be able to claim additional tax credits. The rules around who can claim child benefit have changed, to find out if you still qualify for it read our child benefit information page.

You can find out about maternity pay and what you’re entitled to by speaking to your employer.

Sure start maternity grant

If you have a low income or receive certain benefits you might be entitled to a Sure Start Maternity Grant. It pays a lump sum of £500 towards the cost of your baby. You need to apply for the grant between 11 weeks before the baby is due and up to the baby being 3 months old. Because it’s a grant, you don’t need to pay anything back.

If you have any questions on how maternity might affect your situation please contact us and one of our expert advisors will be able to help you.

Redundancy

Being made redundant is worrying and in most cases means having to get by on a reduced income.

Your intention may be to get back into work as soon as possible but it’s important to act fast to stop your situation getting worse.

If you’re worried about how to deal with your household bills or debts, or both, we can help. Use our online Debt Remedy tool to see if you’re eligible for one our debt management plans(DMP). A DMP could give you the temporary support you need while you get back into work.

Redundancy pay

If you haven’t already received any, check with your ex-employer whether you’re entitled to redundancy pay.

Benefit entitlement

Use our online benefits checker to check if there are any extra benefits that you can claim. Depending on your situation you may be able to claim Job Seekers Allowance or money to help pay your rent and council tax.

Government mortgage schemes

If you’re a homeowner, you might be able to get help with your mortgage payments. Read our information on government mortgage schemes to see if your eligible to apply.

Payment protection insurance

If you’ve paid for payment protection with any of your creditors, see if you can claim on them. This will mean that the insurance pays your normal monthly payment for you.

If we haven’t answered your question please contact us and one of our expert advisers will be able to help you.

Retirement

This is a time when you should be able to wind down and relax but the change to your financial situation can make it difficult to do this.

For many people, starting retirement will mean a reduced income. You might find its a struggle to pay your household bills, unsecured debts, or both. With that in mind, it’s important to get the right advice to help you deal with your situation and put your mind at ease.

If you’re concerned about meeting your payments you can contract us today and we’ll give you debt advice that’s tailored to your situation.

In the meantime you might find the following tips useful:

Benefit entitlement

Go to our free online benefits checker to see what you might be entitled to claim. Depending on your situation you could claim benefits such as pension credit, or help with your rent and council tax payments.

You may also be able to get help with your winter fuel payments or grants towards insulating your home.

Pension schemes

If you’ve contributed towards any private or company pension schemes, contact them to find out how much you’re likely to receive and when they are due to start.

If you’d like more information about pensions, the Money Advice Service offers free advice on pensions and retirement.

Freebies

Once you reach state pension age, you’re entitled to free prescriptions and free eye tests in England.

You can get a free bus pass, wherever you live in the UK. This lets you to travel at off-peak times completely free of charge.

You’ll also be able to get a free TV licence if you’re over 75.

If we haven’t answered your question please contact us and one of our expert advisers will be able to help you.

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