If We Can Escape Debt ..Anyone Can; as More Women Find Themselves in Debt, Cash Worries Can Seem Never Ending. Here, Three Your Life Readers Tell How They Solved Their Financial Crises
Byline: Louise Baty
The number of women struggling with debt is on the rise. As we juggle household bills with the rising cost of living, 40% of people declaring themselves bankrupt are now women. That's a higher tally than ever before.
With high unemployment and the ConDems' brutal cuts, it's no surprise people are bogged down by debt. After all, we're living through the worst financial crisis in decades. But personal debt isn't just down to the recession.
"Most people who take out loans are confident they can pay back the money," says Andrew Smith from the Debt Resolution Forum. "But they may suffer an economic shock, such as redundancy, splitting from their partner or suffering illness."
As cash is seen as a private matter, many are reluctant to seek help. "The first big step to turning your situation around is admitting there's a problem," says Sue Edwards, head of consumer policy at Citizens Advice.
In recent years, more fee charging debt solution firms have sprung up. However, the first port of call should be a free service like the Citizens Advice Bureau or the Consumer Credit Counselling Service.
Many people fall into the trap of borrowing more to pay off debt, but Sue warns against this. "Talk to your creditors and tell them you're having problems. You may find they're more understanding than you expect. Don't pay the person who shouts the loudest, ensure you pay your most important debts first. These are rent or mortgage, council tax, gas and electricity."
TOP TIPS TO GETTING DEBT FREE
Don't ignore your problems.
Face up to them head on and take action.
If you've been made redundant or cannot work due to sickness, check whether any of your payments are covered by insurance.
Check you're getting the right benefits at www.directgov.uk.
Tackle priority debts, such as your mortgage, before anything else.
Don't struggle alone - get free, independent advice from charitable organisations.
Useful contacts are the National Debtline, run by The Money Advice Trust, on 0808 8084 000, Citizens Advice Bureau at www.citizensadvice.org.uk and the Consumer Credit Counselling Service at www.cccs.co.uk.
If you opt to get help from a fee-charging company, check that it is a member of the Debt Resolution Forum, which promotes fairness in the industry. Go to www.debtresolutionforum.org.uk.
I'd hide from the bailiffs
Since becoming debt-free in October last year life has improved massively for April Day, 35, from Bristol. She had a decade of stress which saw her debts mount to pounds 17,000.
"From my early 20s, I'd max out credit cards and only pay off the minimum amount," she explains.
"I put myself under pressure to keep up with my friends, to wear nice clothes and have a good car. Paying that way didn't feel like real money."
Inevitably, her debts racked up but she continued to use credit cards.
She also took out loans, in her name only, which she shared with her boyfriend. When the couple split, she was left to shoulder the debts alone.
"I'd have to hide behind the sofa as bailiffs were knocking on the door," she recalls. "It was frightening."
Eventually, she opted for an Individual Voluntary Arrangement, or IVA, with fee-charging company Clear Debt.
A formal agreement between debtor and creditor, an IVA must be
set up by a licensed professional. The creditors agree for the debtor to make monthly payments and after an agreed length of time - usually five years - the debt is considered settled.
The arrangement immediately stops all court and bailiff actions and is different from a debt-management plan, which is not legally binding.
April's IVA lasted three years and, for that time, she lived frugally in order to make the monthly payments.
She says: "It was hard work but it taught me how to manage my money and I knew that I risked bankruptcy by missing a payment. …