Shop Talk: Taking away the doom of debt

CAN you afford it? Do you really need it? If Janet Menzies had her way, these are question we would all be asking ourselves every day. "I saw some T-shirts printed with those questions and I would love to have crowds of people wearing them, getting the message across."

Janet is a debt caseworker, funded by Richmondshire District Council and working in the Citizens' Advice Bureau.

While all CABs - amazingly, a charity run by volunteers, funded by donations and grants - offer some sort of debt advice, only the few which have extra funding can afford the luxury of a caseworker who can devote time and expertise to helping people get out of their debt problems.

Personal debt is rising alarmingly. Every day brings new facts and figures, whether it's increased bankruptcies, banks accused of binge-lending, middle class professionals juggling credit cards or even suicide by people overwhelmed by debts.

"There are all sorts of reasons why people find themselves in trouble but the main cause is usually some dramatic change in circumstances - loss of a job, bereavement, illness, especially stress or mental illness. All these can knock people sideways," says Janet.

"Then it is very easy to get loans and credit these days. Or to run up debts on loans, credit cards, catalogues, phone bills. It's often not one big thing, but lots of little ones."

Janet is not in the business of judging. Instead, when people have finally made the move to come and see her, they have already started to take control and her whole aim is to help them go forward, get things sorted out.

"They usually arrive with a carrier bag full of paperwork and bills -many of them not even opened. I go through every one, binning the envelopes and the duplicates. So very soon, the heap has shrunk and already looks a lot more manageable," says Janet.

"Then we get the details of all the money they owe and all the money they have coming in. Quite often, they are committed to paying out more each month than they actually have coming in."

The next step is to sort out priorities. The most important debts are not always the biggest.

"Failure to pay certain bills - such as council tax - can land you in prison. Fortunately, we have a very good relationship with Richmondshire council and we can try and work things out," says Janet.

"With some of the creditors I can re-negotiate the debt. After all, it's in the lenders' interest to get their money back, however slowly. Sometimes, too, people are entitled to benefits that they are not claiming. We can help with that.

"What we can do is get people organised, onto a proper footing. We can get them a breathing space, help them to help themselves. What we can't do is magic the debt away."

All the advice and help is free. "What we would like to do, of course, is to prevent people getting into such debt in the first place," says Janet.

She would like to see financial literacy taught in schools - the younger, the better. She would also like to see the big banks, who make such huge profits from lending people money, funding more debt workers such as herself. And she would like to see people coming for help sooner.

"If you're unsure just what a financial document really means, then go to your local CAB. Someone there will explain it to you so you know exactly the amount you're talking about," says Janet.

"But the only answer is to budget, budget, budget. Know what you can afford and stick to that."

When people have spoken to her, she can sometimes almost see the load and worry lifting off their shoulders. She will help them for as long as they need help.

"Nobody is ever beyond the point of no recall. Everyone can be helped in some way. But those debts will still have to be repaid. This is not fairyland," says Janet.

FACTFILE

* The total UK debt is more than £1trillion - £1,000,000,000,000 - more than the national debts of Africa, Asia and Latin America combined.

* There are eight million more credit cards in the UK than there are people.

* We pay £4bn each year in unnecessary interest.

* We lose out on £3bn of unclaimed means-tested benefits.

* More than one in ten people have problems making their debt repayments

* The average UK adult owes £4,004, not counting mortgages - up 45 per cent since 2000.

* British people save only half as much as other Europeans.

* The number of consumer debt problems dealt with by Citizens Advice Bureaux have gone up by nearly three quarters over the last seven years.

* Citizens Advice Bureaux are the largest providers of free independent money advice in the UK. They are impartial and confidential.

CASE STUDY

KAREN and Patrick Ryan were only 18 and 22 when they started sliding into debt. "We were young. We really didn't know about life," says Karen. "Then I was pregnant and we needed a car so we got a loan to buy one, only a little loan, but it was so easy."

Karen gave up work to have their daughter and without her wages coming in, money was even tighter, but they carried on spending.

"I wanted things for the baby so I just bought things from catalogues and we didn't think about the interest charges. We had credit cards, mobile phones. And because we were young we wanted nice clothes and went partying and things, but really most of the money went on things for the house or the baby."

Luckily, because Patrick's in the Army, the rent on their Army home in Catterick was deducted before he got his pay, so at least they had a roof over their heads.

"But the bills just kept mounting up. Patrick worked extra hours, tried to deal with it all on his own to protect me, but I suppose we knew we'd have to pay them some day. Yet when the bills came in, we didn't do anything about them. Maybe we thought we'd win the Lottery or something."

Eventually, it all got too much for Patrick. The worry was ruining their life, their relationship. They wanted to run away from the bills and each other.

"I was 27 going on 57," he says. So they went to the CAB and saw Janet.

"She was wonderful. She made us write everything down. What we owed and what we earned."

They found to their horror that they owed around £30,000 - more than half as much again as Patrick's annual salary.

"But once we'd seen Janet, things started to get better. She spoke to some of the companies for us and organised a way of paying and she explained that some of the letters weren't as threatening as we thought," says Karen.

"Best of all, she helped us sort things out, see exactly where we were."

Since seeing Janet, they have tried to change their lives. "We ask ourselves if we really need things, don't pay top of the range any more, and changed our mobile phone contracts for pay as you go," says Karen.

Patrick partly blames his old Army lifestyle, when he was still single with no responsibilities. "Payday was always millionaires' weekend. You'd get spent up and then maybe with two weeks of the month left you'd have no money - I mean no money - to live on. You might get away with that when you're single, but when you're married, with a baby, it's very different. And then it's so easy to get loans or credit cards."

They have friends and colleagues in a similar position - juggling debts, taking out consolidation loans - a "terrible idea", says Patrick.

"But going to Janet was good. It wasn't just like getting a form over the phone and having to sort it on your own. We were face to face with someone who really listened and helped. She couldn't pay the debts for us, but she got us a breathing space, got us organised."

Thanks to Janet's help, Patrick and Karen have now got their life back on track.

"The debts are still there. They don't go away. We've still got to pay them off. But we're getting there. It will take us a while yet, but the debts are going down. At last we're getting our lives back," says Patrick.

And they have one piece of advice for people tempted by loans and credit cards.

"If you can't afford it, don't buy it."

In the end, it makes life a lot easier.