Being in debt can be very stressful and relationships can be put under strain. You may think that the easiest way to deal with your debt problem is to try to ignore it. Unfortunately this will not pay the bills and outstanding borrowing that you owe. Sooner or later you are going to have to face up to your debt problems. Your debt will simply not go away on its own.

There are many different types of debt and different causes of debt. If you find you have debt problems you can feel distressed and worried. You are not alone as hundreds of thousands of people are in your situation and are struggling with unpaid bills and ever mounting debts. The following highlights some of the common causes of debt.

Loss of Overtime or Redundancy

As it’s so easy to obtain credit, so many people feel they need to supplement their lifestyle through loan borrowing and credit card borrowing. But, when you had regular overtime and the money was plentiful the repayments will have been no problem. However, today, with a recession looming many employers are cutting down or eliminating additional paid working thus making a significant difference to the money people are bringing home. The initial reaction to losing overtime is to carrying on as normal with the hope that the chance of earning additional money will be available to you again. People are used to certain a level of spending and they want to maintain this spending. But this comes at a cost.

Also losing your job (being made redundant) has a devastating affect both emotionally and financially. There is mounting pressure not only get another job, but to secure a job on at least a similar income to what you are used so you can keep up with household expenditure, your mortgage, utility bills and existing loans and repayments. Trying to obtain further credit will be near impossible unless you take out secured borrowing against an asset such as your property. This will be risky and costly in interest.

Starting a Family

Although giving birth to a new child is a wonderful experience, it can put a financial strain on a new family. In today’s world, it is usual for both male and female partners to be working to support and sustain a standard of living. A significant part of the household income will be lost through maternity leave. There is a temptation to increase borrowing to try to make up for this loss in order to maintain the same lifestyle as when both were working. But if/when both are back at work, it can be extremely difficult to pay off the borrowed debt as well as the additional expense of the baby. Debt problem could well spiral out of control if you are not careful.

Debt Due To Divorce or Separation

Often in a relationship, one person (usually the main earner) will take on some of the debts in the form of loans or credit cards. As two household incomes are coming in, these debts are manageable and may not seem problematic. However, if a relationship breaks down ending in separation or divorce, one main earner could be left with the burden of debt. This debt would be too much to cope with on one salary which could cause financial hardship.

Debt Due to Ill Health

Being off work through illness will no doubt at some point have an effect financially as your income and will most likely decrease. Even if your employer makes sickness payments you will not be earning the money you are used to and debts can quickly go out of control. You may have insurance policies to help pay your debts, but these can only help you for so long – or will only pay a certain percentage of your debts.

Failed Business Debts

It is common for small businesses owners and traders to borrow to support their businesses. But if their business fails, they will often find themselves personally liable for their debts. They may be able to find alternative employment, but, the income from the new employment may not be enough to support both household outgoings and the business debt repayment.