Monday, 11 January 2010

Zero-credit Emma

Zero-credit_emma

 

My Dad was an international opera singer. Until I was about thirteen, he was very successful. Yet by the time I left university, my parents had split, sold two homes and owned little more than a couple of grand between them. Ahead of our time with celebrity secrets, we'd tried everything not to let it show.

Twenty years on, I've been a market researcher, turned social researcher and now, I'm a teacher. Last year, I witnessed a pupil experiencing much the same as I had in my teens and I thought this has to stop: it's about time I blew the whistle, so here goes.

I declared bankrupt in October 2002. Alone with a small child, I quit self-employment in 2000 to do a PGCE. I'd spent two years trying to keep financial ruin at bay, making all sorts of debt offers I couldn't afford. There's not much a parent won't do to hide nasty strangers and put food on the table, so I'm not proud of my actions. 

At least one person is angry that my mess caused problems, but as I tried to explain, what else could I do? I never set out to default on a loan. I tried every which way to sell my house. Cash flow in my research business had dried up, so I didn't have the money to take my debtors to court.

A cousin lent me a couple of hundred pounds for the administration charge and I met the Official Receiver in Leicester. I remember exactly where I parked. I cannot turn a street corner there without thinking about it. Yet, the only people who noticed were the so called debt managers, aiming to turn a profit. 

My declaration was met with a deluge of letters warning me about the horrors of bankruptcy. Well, tough. At last someone other than me was trying to shut the barn door after the horse had bolted.  Finally, I was free from the anguish in which I had not acted rationally. 

Head in the sand, I had hidden from bailiffs, accepted shoddy credit to tide me over, converted valuables into cash and cashed cheques at a loss, only to succumb to the scare tactics of anyone who shouldn't have lent me money in the first place. More of my original creditors would have been paid if I'd known then what I know now about credit and debt. 

We need to recognise bankruptcy as a financial tool, not beat about the bush of urban legends. If you own a lot, you will lose it, whereas essentials are rarely sold off. That's important to know. I was so close to the breadline with a family to care for and nothing to keep us on that it really was my last option. Still, I'd never have been cornered into taking it, if I wasn't so scared.

Since discharge, I've looked at ISAs for which I'm not eligible and bank accounts that I can't open either. Wading through the fine print of products ultimately not on offer, there have been countless gateways to a credit history, suggesting that I borrow at an astronomical rate to come back to the fold. 

Zero-credit was my answer - just wait for the cash... Invariably, it came sooner than I expected and always with options; sometimes a stop gap, yet remarkably, at times, even better than I had hoped for. A younger person might prefer to rebuild a credit history, an older one to hang on to their assets. I saw taking credit as a matter of personal choice.

Then came the Credit Crunch. With the collapse of financial markets the world needed to take stock. Consumer borrowing is now inextricably linked to investments which are making a poor return, so it's small wonder that debt is interesting. Drawn in by ads that use words like trust, security and release, watch out for the con in consolidate - lenders playing on your insecurities with good cop, bad cop routines. I, for one, have had enough of dodgy debt ads, so here it is, Zero-credit to the max! 
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