Stressed Borrowing = Desperation

Today’s press is full of reports of Britain’s return to borrowing on credit cards and personal loans, however, unlike the orgy of spending during the pre-crisis years this recent spike in unsecured borrowing is a result of people being unable to pay for essentials – what is known as ‘stressed borrowing’. Some of the key facts are:

• Borrowing on cards & loans has been increasing over the last 7 months as households struggle to make ends meet.

• There was an increase in borrowing on cards & loans of £629m in September compared to the August increase of £478m. The total figure for individual borrowing now stands at nearly £1.5 trillion.

• Borrowing on cards & loans is increasing at double the rate of mortgage lending, suggesting that people are turning to credit to get through the month. This is backed up by research from Shelter

 

Stressed borrowing = desperation

I myself am no stranger to stressed borrowing, having overspent on cards and loans and then finding myself in the dreadful position where I had to resort to credit card borrowing to get through the month. This awful vicious circle – involving endless anxiety, sleepless nights and stress – where debt spirals out of control, inevitably leads to a full blown debt crisis and is something I documented in my book. Whatever the cause of your stressed borrowing it is essential to face up to the reality of the situation: borrowing on cards and loans to pay for essentials and get through the month is a sign that things are out of control and you are only compounding your situation by continuing to borrow.

 

What to do?

If you are borrowing to get through the month then clearly you have a problem and need to do something about it – your situation will not improve if you fail to confront it and do nothing. Be decisive; today is the day you are going to regain control of your life.

Can you negotiate a move favourable repayment plan with your creditors? Is this even a realistic proposition? Perhaps you are a mini-Greece and no amount of restructuring is going to help, as you would simply be delaying the inevitable and enduring miserable living conditions in the process. So investigate different forms of insolvency: Debt Relief Orders, IVA’s or Bankruptcy.

Whatever your situation, it is vital that you DO SOMETHING ABOUT IT! Your life will not improve until you do. The best thing I ever did was confront my problem and take a decision. Think about how good it is going to feel when you do hit on a solution and think about how you’ll feel on that day when you are finally debt free…

 

Help! I’m in trouble – Where to go for debt advice

If you are struggling to get through the month or worried about debt then I would suggest trying the Consumer Credit Counselling Service’s ‘Debt Remedy’ online advice facility, as well as encouraging you to look at forums on the Consumer Action Group website, specifically ‘Debt’ and ‘Banks & Credit’.

Never pay for debt advice as there are plenty of charities and forums that will give you the same information without seeking to profit from your situation.

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