Motherhood and Indebtedness

Recently circulated information calculate that the cost of parenting a child from arrival to twenty one years old can be up to a whopping £200,000. We will assume that you are in an IVA turn out to be pregnant. The issue of attempting to manage your IVA during your pregnancy and especially after the arrival of your child can certainly be a difficult one. The unquestionable joy of getting a new baby ought to be tempered with the inescapable fact that debt difficulties will increase. Nonetheless, a lot of consumers in IVAs have skillfully surmounted the problems posed in these kind of scenarios.

One thing to realize is that your IVA will not automatically fail just because you will be having a baby. Clearly, your fiscal position is going to change - several times - during your carrying a child, at the time of the birth, in the months after the arrival and when you return to the job, providing that indeed you do plan to return to work. For a start, your earnings will probably drop when you stop working. This of course depends on the conditions of your work. Your agreement may possibly provide for your full wages or a substantial percentage of it to be paid out while you are on maternity leave. However, for most people, this will not be the case.

Assuming you take maternity leave of nine months then your weekly maternity pay for the first six weeks of absence consists of 90% of your average gross income. Let us say that the amount you end up with is £X gross each week. Your average gross income is what you earned in the eight weeks immediately preceding the beginning of your maternity leave. For the residual thirty three weeks of maternity leave, your weekly gross income is the lesser of £X or £124.88, currently the legal maternity allowance paid by the government. Observe that these figures are gross and are subject to tax and national insurance deductions. As mentioned previously, some employers have attractive alternate schemes pertaining to maternity leave but the norm is as detailed above. When and if you get back to the job then your income will typically go back to what you had been getting prior to your maternity leave. Your earnings may also rise if you become entitled to get tax credits or if you are given an increase in your established tax credits. You should make an application for these immediately if there is any decrease in earnings. Tax credits may be paid retrospectively to the time the claim is made so it's very important to claim right away. Child benefit is also payable once your infant is born so it is vital to claim as soon as practicable.

Now let's look at expenditure. Your various everyday expenditures may increase or lessen nevertheless overall your costs will rise. For instance, the cost of foodstuffs will grow as you have another mouth to feed and of course home heating costs are likely to go up. On the other hand there may be a short-term lowering in the cost of transport to work. You will incur the new costs of clothes and nappies for your infant. When the duration of maternity leave is over, other new costs may kick in such as the costs of a crèche or other childcare, if you go back to work. If you have extended family who are prepared to assist, some of these new expenses can be perhaps reduced to some extent.

There is no need to be concerned if you find yourself expecting a baby. Tell the supervisor of your IVA straight away so that your IVA can be tailored to your changing circumstances and be properly supervised. It may be that your supervisor will authorize a short-term payment holiday or decrease in payments or otherwise seek to alter the conditions of your IVA by agreeing variation proposals with your lenders. Although lenders have the final say, pregnancy should not be a obstacle to a successful conclusion of your arrangement. To modify an traditional expression - 'where there's (new) life, there's (blank).