I had the privilege a few years ago of managing the Birmingham Settlement Money Advice Centre. At that time the largest debt counselling centre in Europe. In the 7 years I spent there I saw for myself the devastating impact that being in debt can have on individuals and families, the corrosive effects of poorly regulated debt collection techniques on people’s mental health and wellbeing.
I thought we had begun to move away from those days, that we had a handle on lending at ridiculously high APRs, that reckless lending decisions had been scuppered by the great financial crash, that payday lenders had been muzzled by the great efforts of campaigners such as Stella Creasey MP, that dodgy collection techniques had been banished to history.
But I am hearing from people who are struggling just as they were back then. The economic fallout from Covid 19 has turned perfectly sensible decisions to borrow into a nightmare as jobs and prospects are being ravaged, and completely affordable repayments are turned into an escalating cycle of debt, being hounded by creditors, afraid to answer the phone, open the door or open the post.
I would say to people who are in that position, please do not try and deal with this alone. There are people who can help, Money Advice services that can give you advice and support, can contact creditors on your behalf, and above all not judge you. We are all, with the possible exception of the super rich perhaps, just two wage packets away from being in the same position.
I completely understand the embarrassment and the sense of shame that many will feel at being unable to meet their financial commitments, it is perfectly normal to feel that way. But sharing your problem with a professional debt counsellor will lighten the load you are carrying, and enable you to see a way forward.
They will assess your circumstances, ensure your ongoing priority commitments are identified and where possible met, negotiate repayment schedules and perhaps suspension of interest payments with non-priority creditors. They will give you a life plan to work to, to get some measure of control back.
If you really cannot face going to a service then there are online self help packs from Money Advice Services that can enable you to do budgeting, the planning of payments, write letters of negotiation to creditors, negotiate a payment plan and so on.
All I would say to people is that being in serious debt can be an impossible burden to carry, please do not try to carry it alone, please don’t judge yourself too harshly it could happen to anyone, and please don’t despair. There is a way forward.
Best of luck, if I can help please let me know.
Chris Bain 