Getting in and out of debt

Getting in to debt...the easy

bit

It didn’t take a lot of practice and it was way easier than I imagined

Now before I go any further with what I am

about to say, I must point out that this is my story, my journey and

my way of dealing with the situation I found

myself in

I am not stating that anything is right or

wrong

I am just telling it as it is from my view

point

Now, where was I...

As a youngster in the UK (I’m now 43 years

young), it was impossible to get

credit

Credit cards were unheard of and even getting a mortgage

was a tricky proposition

The only available credit came in the form of mail-order

catalogues

So, if you had credit, you couldn’t afford

anything

You were poor!

Credit was a bad thing, it was

frowned upon and it was not a status symbol

If you wanted something, you either saved for

it or went without it

It was the British way –tighten your

belts, stiff upper lip and all that!

The point is, something has

gone slightly astray over the past 30

years or so

I’m not saying that something

evil has happened and we

are victims of a global conspiracy

There is nothing wrong with making money or owning

anything – we just seem to have skipped

a few chapters and want everything now

Forget the waiting, forget the hard work and forget the

saving

We’ve become a generation of instant gratification junkies and we are handing

the same traits down to our children

This isn’t to say that I got these traits from my

parents, far from it

My parents strived hard to

become successful and

still save to this day

What I got from my parents was their spending power, their ability to go out and purchase

the best

Whenever they

wanted to

I didn’t see the hard work and saving, just

the ease at which they could go out and

get whatever they wanted

Obviously I’m not alone or banks and

credit card companies would not be the

vibrantly successful entities that they are

today

I don’t know why our parents forgot to hand down the skills

of saving

Maybe they didn’t forget,

maybe we just forgot to

listen

Too busy staring at all

the shiny things for sale

We’ve walked, wide-eyed, in to the bright lights

of the marketers

Who haven’t stopped offering us everything that we could ever want or

desire

For me, that is how it started

A teenage girl who had the tastes and spending

habits of a Captain in the Merchant Navy and

his Paediatric-Nurse wife

Add to that the birth of the credit

card and there was no need to

save

The World was my playground and I could pay for it in

monthly instalments

So, fast forward a couple of

years

I’ve got a good job but my

spending is out-stripping my

earnings

I’ve got a young family and reality is

starting to bite hard, but I am

slowly learning my lesson

As a family we are still running up debts but

over the coming years I catch several lucky

breaks with the property market and

manage to get rid of my debt

I inherit a plot of land and

decide to build my own place

Fast forward to 2009, the house has been built but my luck has run out and the build went way over budget, mainly due to the rapid rise in the

property market

The UK property markets then suddenly nose dive and I’ve got a

mortgage on a house and plot of land that is

now worth exactly what it cost to build

My marriage is failing and I’m

struggling to keep my head above

water – debts are mounting

I find some of that British resolve somewhere in me

and get all of the debts under control and walk away from my shattered marriage with less than £100 to my name,

but making sure that the joint account was £700 in

credit

I then make the biggest School

girl errors of my life

I take my eyes off the

ball

What ensued was the divorce from

hell, where my ex-husband racked up massive debts in

my name

In short, I had no money and I had debt

collection agencies beating a path to my

door, calling at all hours and sending threatening

letters

Here in the UK, if you have a lot of credit it will

affect your credit rating

If you have a missed payment

it will affect your credit

rating

If you are self-employed it will

affect your credit rating

It is near impossible to get a consolidation loan once your credit rating has been

affected

This is not a bad thing – it just

means that you have to face

everything head on

I had no money and no way of getting

credit – so I needed a way to get everything

back under control without getting me further in to debt

So here is what I did

By the way, I was shown this method by someone who had used it to get

rid of massive debts

So I knew from the very

beginning that it would work

Firstly and most importantly, you have to change your perception

of debt

It is no longer a taboo subject and you cannot go to jail for being in

debt

Debt has become a fact of life – so

there is no need in burying your head in the sand, hoping

for it to go away

Next you become

organised

You get to the bottom of your income and

expenditure and find out exactly where all of your money is going and you write it all down or put it in a spread sheet

You then find out all of the

information of the debts you

owe

Account numbers, balance, payment

schedules, who your creditors are and their contact

details

You then proceed to contact your creditors either by post or via

email

Never, never, never contact them over

the phone, unless it is to make general

enquiries about your account and who to

contact

Your financial situation is set down in writing along with your payment plan and is not open for

discussion or debate

You also request from that time forward that

all communication between you and your

creditor and their agencies is by post only

You then finally remind them that it is illegal to harass or

threaten you with legal action, especially as you have taken steps to sort out your debt problems and that your

payment plan will only be revised WHEN and IF your

circumstances change for the better

So What Do You Offer

Your Creditors and Why?

Simple – your income and

expenditure sheet will show exactly

what you have going in and out

If you are in debt then you will have more going out than

coming in

Never make offers of payment

that are unrealistic to

keep up

Never be afraid to offer the bare

minimum payment as a token gesture

If you have to offer $1 per month on a

$20,000 loan then so be it

By doing this you are showing willingness

to accept responsibility for your

debt and being proactive in dealing

with it

Credit companies hate you doing this and they will then pass your debt

on to one of their agencies – you repeat the same process with

their agencies

Remember this one point, if you have been

proactive in dealing with your debt, the

credit company or their agency has to comply

with your plan

No court in the World will ever make you pay

monies that you cannot afford

It will rarely go to court (if it does you just send the same papers to the

court) and the creditor will begrudgingly leave you

alone, as long as you maintain the payment

schedule that YOU laid out

If you ever do mess up – just repeat the same process and

lower your payments

Credit companies can only force

repossessions on you if you have not

dealt with your debt

They do this by going to court and proving that you are

ignoring them

If you’ve dealt with it they cannot go to court

So always deal with it

Next Part Of The Plan

You can then either maintain your payment schedules for the next five years (the debt has to be written off after 5 years and cannot be forced

upon you forever if you do not have the means to pay it) or you can set about paying off one debt at a time by making cost cutting part of your

new life style and by using the spare money you were spending on the

debts to focus on each debt, one at a time

Another point to note – as you’ve told your

creditors of your financial situation

you can also request that the interest be

stopped on your debt

As the debt is going to be passed on to one of their

agencies (sold on) the interest will stop and has

to stop by law because your original contract was with the credit company

and not their agency

As each debt is repaid you can apply to your

credit reference/scoring

agency to have that debt removed from

your record

This then builds up your credit score again –

should you want to do so

Personally we live free of credit and have returned to the old ways of

saving for things that we want

One final note – some of you may read this

and think it is not legal or ethical to get

your debts under control in this

manner

I can assure you that the law is fully

on your side as long as you take

action and stick to your plan

However, it is illegal to make false

statements about your income and

expenditure, so just be brutally honest

about it

I personally do not agree with the corporate

identity method of dealing with

your debts

I know people have done this

and gotten away with it

I also know people who

have failed and gone to jail for

trying it

In my mind, if you’ve run up

a debt, it is yours

Trying to wriggle out of it by claiming that

you are not the corporate identity that the debt was

issued to is not ethical

But also ask yourself this: Is it legal or ethical to sell

consolidation loans to people who are already in debt?

Legal maybe, ethical no! It comes under the guise of

racketeering for extortionate credit transactions or

profiteering from manipulation of prices – Just

my thoughts!

To finish, there is always hope, and the sooner you put a plan

together and start acting on it, the sooner everything will start to

turn around

Sitting with your head in the sand and bemoaning your lot is not constructive and will only lead to more

misery

So, regardless of how you tackle your

debt, tackle it

Accept it, own it, deal with it and get it back

under your control

Get back to being happy as quickly as

possible

If you want a full Blue-print with templates and step-by-step action plan

go and get my guide at...