My Story...How I Became Debt Free

Are you up to your eyeballs in debt? Are the Constant phoning and letters driving you to distraction? Do you dread every knock at the door? I know what you are going through, you have my sympathy.

(The following is a true account of a person in debt who came through after the right help, and now advises people with their debts, as a fully qualified advisor).

I am a full time debt advisor and I'm proud to say a discharged bankrupt. My experience of debt is from the school of hard knocks. Like most people I would borrow money to buy a car or help around the home. I would be able to meet the repayments and didn't think anything was wrong. This is why I think debt can be such a difficult problem. You don't think you have problem until it's too late.

You go to work and pay your bills and at first the loan/card repayments are low. You still have disposable income and no debt problem!. As the debt rises over time the repayments also rise; now you get paid and pay all your bills and your left with no disposable income. Now we are at the tipping point of the debt trap. There is no spare money to save for the car insurance, tax or MOT or any of the other little expenses life throws your way. When your car needs to pass an MOT you have to pay the bill you have no choice. Your only choice is to use credit and this only increases your overall debts.

From this point onwards the amount at which your debt increases is much greater than you can afford to repay. It's like a car rolling down a hill with no brakes. The debt just keeps getting higher and higher, faster and faster, and I'm sorry to say there is very little you can do about it. You can postpone the inevitable by remortgaging, consolidating and or switching cards. All this does is increase the amount you will owe. You are already insolvent and only by taking action will get your life back.

This brings me back to the title of this piece, don't feel bad about bankruptcy – it's not what you think? What is a bankruptcy? A bankruptcy is a legal second chance, and it is designed so people can try to better themselves. It gives ordinary people the chance to try and fail. A person starts a business and puts there heart and soul into making this a success (90% of all businesses fail in the first 5 years) this business hits hard times and fails. The owner is left with the substantial debt. If there was no bankruptcy what happens to our business man? He would live the rest of this life indebted to others, bonded to them in economic slavery. Only to be free once he dies.

The safety net of bankruptcy allows people the chance to make mistakes and to learn. We are allowed to start again and prosper. Sir Alan Sugar made his millions only after being made bankrupt. On the apprentice he said "there is no shame in bankruptcy". I agree with Sir Alan. There is a culture in this country that wants you thinking that bankruptcy is somehow bad, shameful or wants you to believe in some imaginary stigma.

If you have debt problems you feel pretty bad about it already, you feel stupid, helpless and lost. You ask yourself how could it happen to me. When you are in debt your choices are very limited. You look for help but who do you trust? Your feelings of guilt and moral obligation are used to cloud your decision making. You are told that you should pay back as much as you can. You are asked to pay the debt back over terms lasting 5 years and longer. Why are you encouraged to feel shameful and morally obligated to pay? So people can make as much money out of your misery as possible.

What many people do not realise is what happens if you can't payback your loan to the bank. Most people mistakenly think that the bank takes a loss. This is why we are all encouraged to pay back as much as we can. WRONG. The bank sees any loan as a business transaction. It weighs the risk of you defaulting against the money to be made on the interest. The bank then insures the debt and if you fail to pay the loan, the bank collects the insurance. It's a win win for the bank.

The banks then collect all these loans together and sell the package to outside investors. The banks have now made a profit on the loans and someone else is taking the risk. These were the seeds that created the banking crisis. As the banks were not holding the risk they wanted everyone to be in as much debt as possible. This is why before 2008 every other letter was an offer for a credit card and if you asked for help you were offered a consolidation loan. The Banks were making billions from this practice. Now you're picking up the tab.

So if you are in debt think about you and your family first not the lender.. Ask yourself, what is the quickest most practical way for me to clear my debts and start afresh? If you have no assets (no house, cheap car). If you are a home owner and your house is in negative equity. You should seriously consider personal bankruptcy. As we say "if you have nothing then you have nothing to lose". Negative equity means the mortgage lender technically owns your entire house so you also have nothing to lose.

Why prolong your struggle trying to satisfy creditors who have stacked the system against you? Why live in poverty trying to meet a repayment plan that benefits others?

Use bankruptcy it's designed to set you FREE.

If you want to know more about bankruptcy or are considering becoming bankrupt, then speak to the experts first. We understand what it feels like to be facing huge mounting debts. Call us now for free, fair and impartial advice on 01743 272900 or see our website for details.