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How Debt Can Affect Your Employment

Employment issues may lead to debt. But can debt also lead to further issues which affect your employment?

Employment can affect how much debt you’re in. Some people who face employment issues such as being unemployed or working reduced hours may find themselves in debt due to having to borrow more to meet their expenses. However, debt may also affect your employment – one of the commonly asked questions about personal debts is whether debt will affect your employment or be communicated to your employer.

If you’re concerned about your debt, you can get in touch with us to discuss whether a debt consolidation loan would help your circumstances. Our advisors keep the information confidential and will not share this information with your employer.

Is Debt Consolidation Right for You?

How to find out whether debt will affect your employment

There are many different types of debt which you may owe, for example council tax arrears or debt from a payday loan. Whether or not these debts will affect your employment will depend entirely on your individual circumstances, but many lines of work may be unaffected by your debts. A good first step to understanding whether your debt will affect your employment is to make sure you’re clear on your employment status and know what is in your employment contract if you have one. Once you know the terms of your employment, this makes it easier for you to find out your rights and consider whether debts may affect your employment.

Discuss Your Debts With Us

Can your creditors contact your employers?

According to Money, debt creditors are not legally allowed to disclose your financial situation to anyone else without your permission, this includes your employer, unless your debt is a business loan.

Can debt be recovered from your wages?

If you have debts, for example a bank loan or credit card arrears, creditors may seek a court order to take money from your wages, which is called an ‘attachment of earnings order’.

There are some circumstances where your creditors can’t apply for an attachment of earnings order. For example, if:

  • You owe your creditor less than £50;
  • You are self-employed;
  • You are not currently in employment;
  • You work in the army, airforce, or navy.

If these exceptions don’t apply to you and your creditor does let you know that they’ve applied for an attachment of earnings order or sends you the “replying to an attachment of earnings application” or “N56 form”, this means your creditor has applied to take money for your debts out of your wages. You should consider contacting your creditor straight away to discuss this.

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Want help with your debt?

You can also ask for help with your debt if you would like to consider a debt consolidation loan, which can be helpful if you are struggling with multiple payments and want to consolidate your debts.

Get Help Managing Your Debts
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APRs from 5.8% to 89.9%

We are a broker, not a lender.

Unsecured Loan Representative 69.9% APR

Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.

Secured Representative 11.7% APR

If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.

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