MARKETING manager Jayne Thompson’s money worries began nearly 20 years ago when she was just 18 and moved to London. City living was expensive and she was earning just £6,000 a year.
She says: “My bank offered me a £300 overdraft to cope. I was brought up to believe debt is wrong but the bank were crafty.
“They told me to reply if I didn’t want the overdraft - so of course I left it and got the cash.
“I was sharing a tiny one-bed flat with a friend but our costs seemed to spiral. I got a job as a secretary on better wages - so the bank gave me a bigger overdraft.
“Soon I was in the habit of always spending more than I earned. Within a couple of years I was £5,000 in debt but I still believed it was under control.
“A few years later I met my boyfriend, Simon. He was going through a divorce so we went out a lot to take his mind off things.
“My debt crept up to £15,000 but I didn’t seem to have bought anything. We were just living a reasonable lifestyle. The bank kept on dishing out bigger loans then offering me an extra credit card or two.
“I was stupid with money. I always thought I’d pay it back eventually, but that day never came. It was just too easy to borrow more.
“In 2000 we moved to Durham and settled in a rented flat. To save cash, we didn’t get home contents insurance. But a neighbour set fire to the building and we lost everything.
“Simon suffered terrible burns and was in hospital for three months. Without his wages and no cash to replace what we’d lost, I was forced to take out another £20,000 loan.
“We knew we had to make money to repay the debt, so we decided to try property developing. We found a bargain flat. It was in ruins but we fell in love with it and snapped it up, despite a bad survey.
“We hoped to make money doing it up but it was riddled with problems. Instead of coining in the cash, we spent even more. It cost £15,000 to fix all the things wrong with it.
“We got a builder but he left it in a worse state and we spent £10,000 taking him to court.
“When we sold, we only just broke even. By now we could barely afford the basics.
“Simon had never had a credit card but I persuaded him to get one. He’d been left with nothing after his divorce as his wife kept the house, so he needed money.
“He also felt dreadful about the effect of the divorce on his son Luke, so we showered him with gifts - all on the credit cards.
“Soon Simon started to rely on credit cards as much as I did. We both earn £25,000 but we’d take cash from one to pay off another, so the payments never went down.
“At Christmas we had six credit cards, two unsecured loans and another giant loan for £25,000. My debts were £90,000 — the kind of debt people kill themselves over.”
Now Jane, 37, is one of a growing number of Brits who are dodging their debts by going insolvent. She has taken out an Individual Voluntary Arrangement or IVA — a legally binding agreement between a debtor and creditors to pay what they owe within five years.
Almost nine million UK adults have unsecured debts of at least £10,000, and one in five are considering some form of insolvency. |
