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Is Debt avoidable?
05-09-2005, 02:40 PM
Post: #1
Is Debt avoidable?

Is Britain's deb spiralling out of control and can it be avoided? The figures show the total UK personal debt is over £1 trillion pounds........

I used to work for a finance company and realistically if it wasn't for debt I would not have had a job. However I do think that borrowing & lending money is just too easy. When I started as an underwriter our underwriting was very strict and unless you bought in a picture of donkey wearing french knickers you were turned down for a loan. As the competition hotted up with any High Street shop offering personal loans to every Tom, Dick and Harry we had to loosen our strict rules and we ended up given money to anyone who asked basically! In a complete turn around there had to a very good reason as why you would want to turn down a loan. It ended up that loans were not repaid and we had to a lot of debt management to try and recover the loans. People wouldn't pay you because it was Christmas, or it was the summer holidays or it was Easter, or the cooker blew up any excuse really.

Do you think our lending laws should be tighter and if you want anything you should just save for it?

The only debt we have is our mortgage, we have a credit card that we pay off on a monthly basis so we never acrue interest on it.

What do you do and do you think it is good for the economy to spend, spend, spend? The thing with the spend, spend, spend is that a lot of the money that gets borrowed gets spent on buying cars from abroad or going on holidays from abroad, even home-improvements get imported from abroad so it's not as if the money being spent is going back into the UK economy.

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05-09-2005, 05:11 PM
Post: #2
Is Debt avoidable?
I'm in debt up to my eyeballs but am paying it off slowly but surely. It's a combination of things really, the main one being my other 1/2 being out of work 3 times in 2 years & we had no money to live on. Absurdly during that time, I had credit card companies desperate to give me their cards. I had no choice really to take them as I had no other money.

We are now, as I say, in debt but we are managing it & I am quite proud of that fact. A young chap I used to work with though has declared himself bankrupt - I believe the criteria is that there would be no chance of the debt being repaid - & all his debts have gone away! I don't know much about it but to listen to him, he can't have a bank account for 7 years, he won't be able to get credit for about the same time but all his debts have gone away.

I think that's disgusting.

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05-09-2005, 05:58 PM
Post: #3
Is Debt avoidable?
We spent a long time building up debt on a credit card - daft I know! It got to the stage where we had no idea what the money had been spent on so we decided to do something about it.

First of all we stopped using our credit cards and transferred all the debt to a very low interest credit card (actually cheaper than a loan) and paid the same amount off each month - no matter how much they kept decreasing our minimum payment. We have now got the debt on to an interest free credit card (the second one) and are paying it off - again the same each month.

In another six months we will be debt free (apart from the mortgage). I could actually pay the card off in full now - bit the money's in a high interest rate account - earning me money!!

For anyone interesting in saving money Martin Lewis has a very good website - full of tips.

Find it - here

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05-09-2005, 06:24 PM
Post: #4
Is Debt avoidable?
thanks Rob.........will come in very handy

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05-09-2005, 06:31 PM
Post: #5
Is Debt avoidable?
http://www.fool.com is another good one.

Sometimes debt is unavoidable. I had major surgery a couple of months after I started my business, Insurance covered the basics for a while, but I had to remortgage to keep myself for nearly a year.

If property prices hadn't increased the way they had, lord knows how I'd have managed.

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05-09-2005, 09:17 PM
Post: #6
Is Debt avoidable?
We are lucky enough not to be in any debt, but that is mainly to hubby's doings.

When I lived on my own I found it quite easy to use the credit card, and all the store cards you get in the States was lovely, until the bills came in.
I paid it off slowly, then before we came back to Britain, any outstanding debt was paid off by my dear hubby.
We are skint, but we haven't a mortgage, no credit cards, no debt, so pretty lucky really.

But I do think it is too easy to get loans for this and that.

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06-09-2005, 02:20 AM
Post: #7
Is Debt avoidable?
Not in my life.

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06-09-2005, 05:41 AM
Post: #8
Is Debt avoidable?
We have an outstanding amount of debt, and all because our income has more than halved in the last 4 years cos of Mr F, his health and medical retirement.

It is cripplingly easy to get into debt, so very very easy.

But my tip for debt is if you ever get into a position to pay off in full a credit card debt - DON'T!! Ask them for a settlement figure. Say you owe them 5K - and you suddenly have 5K to hand. You want rid of this debt, ask them for a figure - they may say 3K - next tip GET IT IN WRITING - that it is the final settlement figure - and hey presto you have saved yourself 2K!!!

This tip has been passed onto me by lots of people, in fact yesterday one of the credit cards we owe actually told us. He said when you are in a postion to settle with us - DON'T. I larfed out loud!! But it is true - you can get them much much cheaper doing it this way!

Quote:I could actually pay the card off in full now - bit the money's in a high interest rate account - earning me money!!


Rob - why don't you try this??? Shy bairns get nowt - as they say!!Smile

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06-09-2005, 08:34 AM
Post: #9
Is Debt avoidable?
When we moved here we only had the mortgage. We had some savings in the bank, and no credit cards. But i always had one credit card in my purse incase of emergencies.

Unfortunately my mind set changed, and i thought buying that lovely T-shirt was an 'emergency' so the card started creeping up !!!

I now owe about £1400. I have torn up the card, so i cant use it again.

I do have a dilema though which you might be able to help with. Our savings have more or less gone due to decorating (which is what we kept it for). BUT i could pay off the credit card in its entirety with the money left, and then set up a standing order for £100 a month back into the savings account. It would take me over a year to pay this money back - but it would be interest free. The trouble then is, what if an emergency popped up in the next few months, and then i couldnt afford to pay for it as i had spent all the savings on paying off the credit card ?

Does this make sense ?

So would it be better to pay off just 1/2 the credit card, and then work at paying the rest of slowely - and then replenish the savings account?

I'm not perfect, but im so close it scares me
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06-09-2005, 09:12 AM
Post: #10
Is Debt avoidable?
Bonsai Wrote:I do have a dilema though which you might be able to help with. Our savings have more or less gone due to decorating (which is what we kept it for). BUT i could pay off the credit card in its entirety with the money left, and then set up a standing order for £100 a month back into the savings account. It would take me over a year to pay this money back - but it would be interest free. The trouble then is, what if an emergency popped up in the next few months, and then i couldnt afford to pay for it as i had spent all the savings on paying off the credit card ?
?

It makes perfect sense Bonnie - ring the credit card company up and try and negotiate a full and final settlement figure - have a figure in your head say £800, and make on offer of say £750. They will obviously say no and will ask for more. But if you stick to your guns and be tenacious - they may well allow you to pay the whole lot of at a £400 or £500 saving to you!!!

This is far preferable to even interest free as it is greatly reduced AND interest free. You then have the benefit of having a lump sum still in your control and bank account for emergencies and you don't have the worry of debt or monthly payments to the credit card people!!

IT DOES WORK, BONNIE - GIVE IT A GO!

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