One of the sad consequences of lockdown is the deterioration of some relationships. Maybe spending so much time under the same roof exposes and widens cracks in our relationship with a partner or spouse. The Guardian (17 May) reports that “Lockdown is straining so many relationships”. And the rise of domestic violence has been reported in several sources. And for some – the breakdown will be final.
The question then becomes one of the practical consequences – and finances will be central to that. We may have to downsize and cut back wherever possible. But very often and especially for those in debt, the separation can be devastating. Dual incomes and economies of scale on some expenditures, have now been lost and the debt repayments that were straightforward before loom large under new arrangements.
And the old priorities remain. A roof over our heads, food on the table and travel costs to get to work remain key priorities. Therefore for some, the only cutbacks that are realistically possible are debt repayments. There is the nagging suspicion that to seek help with debt problems – there must be some reckless spending or over the top luxury purchases. But fir the vast majority of debtors in trouble, the reason is far more likely to be circumstantial than foolhardy.
And as circumstances change due to a separation, all options need to be considered when it comes to solutions. One such option is an IVA. People generally want to pay back what they can of their debt. We’ve had the finance and we want to be responsible in dealing with it. But we can’t pay what we don’t have and taking out more debt is rarely the best course of action.
So one possibility is an IVA where we agree to repay what we can – but only when our living costs have been met. Creditors for their part are open to a plan that involves then writing off some or much of the debt if they can see that the debtor is doing the best they can. To refuse an IVA may well lead the debtor to bankruptcy which may well not be in the creditor’s interests either. Some of their debt back is better than none of it. Amidst the often painful and usually problematic consequences of separation, there can at least be some financial solutions that can help us move on and rebuild our lives.