TWO years ago Jim Paige was overwhelmed with £20,000 debts and living in fear.
The 56-year-old former IT worker from Lewisham, London was struggling to leave the house or answer the telephone at the height of his struggles in 2022.
His marriage crumbled and he fell into depression as a result of his financial situation.
He added: “Things were really bad emotionally – everything was dark.”
Two years later he is now debt-free and has embarked on a fresh career to help others facing financial woes.
His problems started in 2019 when the father of three decided to get private medical treatment for recurring back issues.
Jim had forged out a successful career in IT and owned a family home with his wife and children now, 8, 19, and 21, in London, as well as a buy to let property in Milton Keynes.
“But bills began to skyrocket,” he explained.
In 2020, he decided to go to Nairobi where treatment was cheaper.
But when the Covid pandemic set in he was not able to travel back and then also contracted the illness which saw his health severely deteriorate.
His tenants stopped paying rent on the home in Milton Keynes and, as he wasn’t able to work and pay bills, both of his properties ended up repossessed by the bank.
His marriage also crumbled under the pressure.
Jim says: “One thing led into another. Things really escalated and I was stuck abroad.
“My immune system had collapsed from Covid.”
By the time he was able to travel back to the UK in 2022, Jim was so unwell that he went straight from the airport and spent two months in hospital recovering from long Covid.
When he came out he was put in temporary accommodation and felt like he had rock bottom.
He said: “The bank had sold my debt and creditors were hounding me.
“The moment I turned on my phone, I would see texts come through.
“They constantly threatened to come to me, it was crazy.”
Eventually, he was connected through social services to charity Christians Against Poverty (CAP).
The organisation provides free and professional debt help to people struggling.
Jim said: “I was very fearful, everyone I spoke to up to that time was critical.
“But the relief came through when the representative came and visited.
“They weren’t judgemental and put me at ease for the first time.
“They said, ‘From this moment forward you’re not alone.’.”
The adviser went through Jim’s finances and determined that the money he was getting through Universal Credit was not enough to repay his bills.
It was suggested that he would qualify for a debt relief order (DRO). This is solution available to selected people who are in debt and have no means to repay it.
Jim was a little reluctant to go ahead as it stays on your credit record for six years. During this time, you could find you are rejected when applying for other financial products such as bank accounts and mobile phone contracts, as well as all forms of borrowing.
But he decided it was the best option forward and the DRO went through in February 2023.
At this point, creditors were no longer allowed to contact Jim and he felt his health situation started to improve.
He has now trained to be a debt coach with CAP and is due to start taking on clients next month.
He said: “I’m feeling very positive and optimistic.
“Thankfully, I’ve met people who were able to hold my hand.
“I want to improve the lives of people who are in a similar situation to what i was.
“It’s my way of giving back and knowing what I went through was not in vain.
“Anyone who is going through a tough time, needs to know it’s not the end of the line. There’s still hope and you’re not alone.”
A debt relief order is a form of insolvency, like bankruptcy or an Individual Voluntary Agreement.
A DRO is an option if you owe less than £50,000. You won’t qualify if own your home or another property .
And will need to show that you have £75 or less left over each month after paying for bills and other essentials.
You must not have have savings or a possession worth more than £2,000 – you can own a vehicle up to the value of £4,000.
The order will freeze your debt for 12 months and you will need to follow certain restrictions including a cap on further borrowing. Creditors will not be able to contact you about money owed during this time.
After this time, the debt is wiped off and some of the restrictions are lifted.
It will affected your credit rating and it could damage your chances of being able to get credit.
You are not allowed to get credit for more than £500 without telling the lender you have a DRO, during the initial 12 months.
It stays on your credit file for up to six years.
Up until April this year, you had to pay a £90 administration fee to enter a DRO – but this has now been axed to make the solution more accessible to those who need it.
You can’t take out a DRO if you have an IVA in place or if you’re going through bankruptcy.
And you can only go through one DRO in six years.
You can apply for a DRO through a specialist DRO adviser.
This professional person will have the skills and permission to complete forms, as well as give advice on DROs.
This person can then check you qualify and that a DRO is right for you.
The free debt charities, including Christian can signpost you to a specialist adviser.
Free debt charities include:
By James Flanders, Consumer Reporter
UK Finance reports that we spend a whopping £2 billion a month using our credit cards.
While that little strip of plastic makes everyday spending easy peasy, it comes at a huge cost.
According to The Money Charity, the average credit card debt sits at £2,485 per household or £1,312 per adult.
And if you’re stuck on a credit card with a high APR and only making the minimum repayments, you could be forking out hundreds of pounds extra in interest charges.
For example, if you owe £1,312 on your credit card and are charged 24.8% APR.
If you don’t make any more transactions and pay £100 a month in repayments, you will pay off the card by September 2025 but at £207 in interest.
However, by hunting around for a better deal elsewhere and switching to a balance transfer credit card with a lengthy interest-free period, you can save yourself £162.
If the same person was accepted for a 28-month-long zero-interest credit card with a 3.4% balance transfer fee and made the same £100 repayments each month.
They would pay off the debt sooner, in July 2025, and only fork out £45 towards the 3.4% balance transfer fee.
Before taking out a new credit card or increasing the amount you borrow, it’s vital to consider the consequences.
You should only borrow money if you can afford to pay it back.
It’s always vital to ask yourself if you need to borrow before committing to a new credit card, personal loan or overdraft.
If you use a credit card, I’d recommend that you always pay off your balance in full at the end of each statement period.
Lenders have a responsibility to help customers who are in debt.
If you’re in a debt crisis, your first point of call should be your lender.
They might help you out by offering you a reduced interest rate or a temporary payment holiday – so check in with your lender if you’re struggling.
