In view of the fact that since March 2009 the UKs base interest rate has been becalmed at a record low 0.5%, one can only wonder what the extent of the problem would now be had it run at 7.84%, which is the average rate from April 1971 until now. For the record the all-time high was in November 1979 when it peaked at 17%.
The words epic proportions have been used to describe the current extent of consumer debt in the UK, with the problem coming in many forms. Whatever their particulate nature, debts relating to credit cards, store cards, personal loans and payday loans ultimately amount to the same thing stress, hardship, fear and a real sense of hopelessness and entrapment.
The reasons for debt are many and varied. Unemployment, reduced wage packets, less overtime, a change in domestic circumstances following the birth of children are among those we hear most frequently. But few very few – people are slippery schemers and cunning chancers who knowingly and deliberately take on debt they have no intention of repaying. Such behaviour is rare. Very rare.
Far more common are genuine cases where people gradually move from a position of being able to pay their way to one where that becomes impossible. In an attempt or more probably, one of many attempts to stay one step ahead of the demands on them, they borrow again. And again. And again. And again.
Each time they do that, they get in a little deeper. And so they go ever-deeper into debt.
Getting into debt is easy. Very easy. Too easy.
Getting out of debt is altogether different and more difficult, however. It can be an expensive business, not only in terms of money but also in terms of our physical and mental health. Struggling to meet repayment demands and worrying about the fact that its such a struggle – month after month, year after year, drains people of morale, joy and, worst case scenario, hope.
Life becomes a matter of simply trying to keep our heads above water and the wolf from our door.
For vast numbers of those in debt, that is reality. And they, better than anyone, know that it could get even worse.
We all recognise that the base interest rate cannot remain at 0.5% indefinitely; some day, sooner or later, the Bank of England is going to announce an increase. And from the moment that happens, repayments will become more expensive. Clearly that will require more money and, with that will come more stress, more anxiety and more concern about how we are going to make ends meet. Cue a fresh flood of questions about debt advice, debt consolidation, debt management plans, debt solutions and debt relief.
In short, what people want and need is a step by step plan as to how to get out of debt.
Is that even possible? you ask. If so, how do I go about it? How long does it take? How will it affect me and my familys prospects? And if such a service even exists, who provides it? And since theres no such thing as a free dinner, how much is this going to cost me?
Those are all totally legitimate questions.
Okay, lets look at the thing logically. There isnt much point in anyone offering you help if it is going to add to your already-considerable mountain of debt. That really wouldnt be helpful at all.
And there is a good chance you know all about betting in deeper as a result of borrowing more to service earlier loans. If you are in a debt spiral which has seen you borrowing in order to repay loans in other words, piling fresh interest on existing interest, thereby creating a double whammy effect you need help in calling a halt to that madness.
Some of you may well be cynical about the possibility of Government, particularly when it comes to help with debt. If so you will be surprised pleasantly and positively so, in this instance to learn that there is Government-backed legislation designed to help you avoid bankruptcy and enable you to take control of your finances, maybe for the first time in your life.
This can allow people to make realistic plans towards a debt-free future and start living in a manner which at this moment appears to be nothing more than some airy-fairy dream.
But imagine being free of the constant pressure of demands for money made by creditors or their representatives. Go a step further by envisaging a scenario in which they are no longer permitted to hassle, harass or harry you. Barred from doing so by law. So no more of those frightening letters, an end to all those final demands, a cessation to those humiliating calls to you or on you at your home or workplace, a ban on bailiffs badgering you for money you just dont have.
How would it feel to have one single, affordable, carefully arrived-at and agreed-upon repayment process rather than a string of them? How good would it be to have all that interest and all those charges frozen so that your debt would stop increasing, something that makes it impossible for you to get out of this quagmire?
Too good to be true? No. Its totally possible, wholly legal and fully Government-backed.
Its known as a Debt Management Programme (DMP) and under it, you may well be eligible. It is overseen by a bona fide Debt Management Company (DMC) to which you make just one agreed, manageable monthly repayment rather than a string of repayments to a variety of lenders.
Your DMC is responsible for ensuring that this money goes to each of those to whom you are in debt. In addition, your DMC is your safeguard against harassment from banks, credit card companies and pay loan operators or any other legitimate creditors.
And it may see up to 85% of your debt wiped out as a result of being unenforceable.
For it to work, the person with the debt is going to have to be completely honest about their situation the full extent of what is owed and to whom, their income, their essential that is, non-negotiable outgoings and all other factors.