Unemployment can lead to greater amounts of debt.

March 31, 2009 – 11:13 am – No Comment

Unemployment has been increasing in the United Kingdom as well as the United States. Situations in the UK have become increasingly dire as the recession deepens.

Those who are unable to find work may be turning to school as well. Over the course of one year the University of Dundee had an increase in student applications of 16.5 percent. The increase in student applications means there will most likely be an increase in student loan applications.

College is supposed to be one of the most integral parts of life. It is supposed to be when a child leaves their parents’ homes and discovers the world on their own for the very first time. It is not supposed to be a time when they are worried about what kind of job, if any job at all, they will be getting in four years when they graduate.

When these students graduate college in 4-5 years what will the job market hold for them? It is tough to say, but what is certain is that these students will face a mountain of student loan debt.

As unemployment numbers suggest, current and upcoming graduates are having a difficult time finding work. Accounting firm Deloitte Touche Tohmatsu has recently had an increase in applicants in its Edinburgh office of 59% for any open positions.

These graduates are not only having a hard time finding work, but they are also going to start facing their student loans soon. Student loan billing is typically deferred until six months after graduation. Once those six months are up, students will begin to be billed for the loans they incurred while in school and without income, that can be difficult.

In the UK, the average unsecured household debt is around £9,633, secured debt increases the number to £21,750, and people are beginning to default on some of this debt. Many families are defaulting because the debt load is simply too much to bear. Judgments against those in England and Wales have risen to 223,519 in the 3rd quarter of last year. The number equals staggering 2,430 people receiving judgments daily.

Debt Free Direct is a UK based company that can help resolve some of these debt issues that families are facing. Instead of going it alone, Debt Free Direct is giving anyone in the UK free debt advice at no charge and without obligation at 0800 083 1433 or you can read more about them at: http://www.debtfreedirect.co.uk/news/threatsposedbyrisingunemployment-8277-03022009/