Next Part Of The Plan
You can then either maintain your payment schedules for the next five years (the debt has to be written off after 5 years and cannot be forced upon you forever if you do not have the means to pay it) or you can set about paying off one debt at a time by making cost cutting part of your new life style and by using the spare money you were spending on the debts to focus on each debt, one at a time.
Select the debt that either has the highest interest rate (not really relevant - see below) or the highest outstanding debt.
Another point to note – as you’ve told your creditors of your financial situation you can also request that the interest be stopped on your debt. As the debt is going to be passed on to one of their agencies (sold on) the interest will stop and has to stop by law because your original contract was with the credit company and not their agency.
As each debt is repaid you can apply to your credit reference/scoring agency to have that debt removed from your record. This then builds up your credit score again – should you want to do so.
Personally we live free of credit and have returned to the old ways of saving for things that we want.
One final note – some of you may read this and think it is not legal or ethical to get your debts under control in this manner. I can assure you that the law is fully on your side as long as you take action and stick to your plan. However, it is illegal to make false statements about your income and expenditure, so just be brutally honest about it.
I personally do not agree with the corporate identity method of dealing with your debts. I know people have done this and gotten away with it. I also know people who have failed and gone to jail for trying it. In my mind, if you’ve run up a debt, it is yours. Trying to wriggle out of it by claiming that you are not the corporate identity that the debt was issued to is not ethical.
But also ask yourself this: Is it legal or ethical to sell consolidation loans to people who are already in debt? Legal maybe, ethical no! It comes under the guise of racketeering for extortionate credit transactions or profiteering from manipulation of prices. – Just my thoughts!
Personally I would stay clear of buying more debt to get you out of debt…All you are doing here is extending the length of time that you are in debt and paying some middleman a fat sum to keep you in the debt spiral. It also delivers false hope or a false sense of security and allows you to rack-up more debt.
To finish, there is always hope, and the sooner you put a plan together and start acting on it, the sooner everything will start to turn around. Sitting with your head in the sand and bemoaning your lot is not constructive and will only lead to more misery. So, regardless of how you tackle your debt, tackle it.
Accept it, own it, deal with it and get it back under your control. Get back to being happy as quickly as possible.