Paying Off Debt After Being Made Redundant

chrisb1357

Hi all,
I have recently been made redundant from a job that i have had for the last 10 years. My wife is still working full time and she is bringing in a wage that will just cover all the everyday bills inc rent etc (excluding the debts). Between us we both owe debt of around 7k and we was thinking of just using some of the redundancy payout money just to clear all this off as at the end of the day we still have to pay them each month if we didn't do this. 

It would mean that it would only leave a few thousand of my payout but would mean we would be debt free. I have also put in a claim for new style JSA as i believe as i have worked more than a few years i can claim this upto 6 months and it does not take into account savings.

I am applying for jobs left right and centre and have had a few interviews so far but its early days so not sure how long i will be out of work for

You think this is a good idea

 

TheAble

What is the interest rate on the 7k?

Smashingitnow

In theory a great idea. However is your wife's job secure? Interviews is an excellent sign but in many sectors the job situation may get harder before it gets easier (who knows?). My point is if you do this and then face income challenges you might creep back into debt or want to access credit but can't because of your circumstances. It is worth calculating this in detail ie looking at both options (repaying full amount or only paying minimums) how long you could afford to be out of a job. If it was low APR I would prefer the safety net of available cash. 

chrisb1357

Hi all

Off the top of my head without checking on the other computer the APR and Interests are very high across around 10 creditors. We been paying the minimum payments for a while.

My wife has worked in her job for 7 years and seems pretty secure at the minute.

I suffer from depression to which is why I just wanted to get things cleared off as never been able to before.

Smashingitnow

I understand. Debt is never good and as this is high APR with the added stress of a high number of creditors and it is weighing on your mind then I agree with you that paying it off would seem the best option. Also.you should be really proud that you're able to (those long years of service) and that you're thinking ahead. Good luck on the job hunt. Interviews is such a good sign and I hope you find the right post for you soon.

TheAble

With high APRs then yes I agree pay them off. It will be a big weight off your mind.

ryanm8655

I'd pay them off in your situation, will save you money in the long run and be a big weight off of the mind. Just don't use the lines of credit again.