This week saw the first good news on the employment front for some time. Local company Gem is hoping to double their workforce to 1800 and another French owned company Teleperformance is creating 610 jobs in Bangor and Newry. Whilst these developments are to be welcomed the new jobs do not replace those already lost as a result of the current credit crunch and recession. Indeed, many workers are under notice of redundancy, on short term weeks or in consultation periods with their employers. Mr B from Derry is one such person and enquired what would happen in the event of his employer closing down.
Redundancy payments vary but if the employer goes bust the workers receive the statutory minimum which can be as low as 0.5 of a week's pay for every year of service. This payment clearly does not compensate someone for their loss of employment and only covers the basic living expenses until benefits are awarded. So what should you do if you lose your job?
It is important to prioritise expenditure and expenses such as the mortgage/rent, food and clothes, heat and light have to be paid. Check any unsecured agreements such as loans or credit/store cards to see if they have payment protection included and immediately inform the lender and make a claim. If you do not have payment protection inform the lenders anyway as they may stop interest and charges for a period if they are aware of your situation. Ensure that you are applying for all benefit entitlements and local advice centres have advisors specifically for these situations.
Your period of unemployment could be short or long term and even if you do find new employment it may be at a lower wage and this can result in other problems particularly if there is debt other than the mortgage. During the period of unemployment it is common for people to increase their unsecured borrowings while they wait for benefits but also to pay for the costs of applying for jobs and travelling to any subsequent interviews. Once you have found new employment any policy will stop making the payments but if you are not earning what you were before, you may struggle to meet the demands of creditors.
If you find that you are unable to service the payments to creditors it is important to seek advice. The priority payments will have to be met as normal and any remaining funds paid to the unsecured creditors. There are a number of options available to you and banks are often sympathetic to people who have suffered job loss and are now struggling with their debts. Interest and charges are normally frozen and in appropriate cases the banks will agree to write off a percentage of the monies owed.
If you find yourself struggling there is help available. In addition to the invaluable work done by local advice services and the CAB, most insolvency practitioners offer a free, no obligation, initial consultation. Take advantage of the assistance that is available and do not suffer in silence.
Author: Michael Peoples