Debt diary: A serious blow

Sayara Beg wants to reach a deal with her creditors

Thousands of people in the UK are struggling with ever-increasing levels of personal debt.

BBC News website reader Sayara Beg, 36, a freelance IT consultant from East London, has been telling her story of dealing with debt.

Mum-to-be Sayara suffers a serious blow in her effort to get her debts under control before the birth and takes time to reflect on the lessons she has learned to date.

Diary entry eleven

My best laid plans seem to be coming apart at the seams.

From the beginning I have tried to be open and upfront with my creditors.

Some have been fine and accepted the plans drawn up by me and my debt counsellor.

However, some have been bureaucratic and have simply refused to countenance coming to an arrangement which will allow me to have my baby in peace.

They have insisted that they will only talk when my accounts start to fall into arrears.

It has been more than a month since I had my work contract terminated and the day when I start to fall behind my payments has arrived.

I receive two letters - one from Halifax credit card services and the other from Barclays bank, who I have my current account with and a personal loan.

They both hit me with charges for being in arrears, despite the fact that I had warned them weeks ago that I would not be able to afford my repayments.

First I call Halifax. They insist that all communication is done via snail mail and that I must make clear how much I can afford to repay each month. They will take time to mull this over and in the meantime, I fall into arrears, hefty charges are added to my balance and interest accrues.

It's a real win-win scenario for Halifax. No wonder they are making huge profits!

If Barclays take all my money then I will not be able to meet my other commitments Debt diary: entries 1, 2 and 3 Debt diary: entries 4 and 5 Debt diary entries: 6, 7 and 8 Debt diary entries 9 and 10

Barclays are giving me a real headache.

I explain, yet again, that I am only looking to postpone payments for six months during my maternity. I add that I first let them know about this situation eight weeks ago.

They say six months is a long-term debt problem and that they will continue to debit the full amount I owe them from my account each month.

They tell me that as long as I have my current account with them they will automatically take what I owe them.

This threatens the careful budget I have worked out with my debt counsellor. If Barclays take all my money then I will not be able to meet my other commitments.

This includes so called "priority debts", money that must be repaid or I risk defaulting on my mortgages.

This is a very frightening prospect.

If I want to avoid money being automatically deducted I am told I should open an account with another bank and manage my budget through that account.

What is more, I am told that Barclays may cut their losses and sell my debt on to a third party. What will this mean?

In response to Sayara's assertions, Barclays told BBC News that they "treat all cases of financial difficulty sympathetically and we would urge anyone experiencing problems to contact us at the earliest opportunity".

A Halifax spokesman said that borrowers, like Sayara, experiencing difficulties should talk to their lenders to come to an agreement over the best way forward.

Diary entry twelve

I have taken advice from a Law Centre employment adviser as to whether I can sue my former employer on grounds of sex discrimination.

I had my freelance contract terminated after revealing I was pregnant.

I am advised that if I take tribunal action, I will not be in line for legal aid.

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I have too many assets to qualify for state help.

This must be a difficult situation faced by many people. If you are cash poor, due to losing your job, how do you fund legal action?

I have until the end of July to decide whether to go for it.

I look again at selling my buy-to-let property.

I do the number crunching and due to fees and tax it just does not make sense.

I will be able to pay down a little of my debt but, ultimately, I will still be stuck in the same situation of not having enough income to meet my repayments.

I hoped that my property would be my pension and spent 10 years working hard to buy it. My current situation threatens all my hard work.

Diary entry thirteen

As the date that I am due to give birth approaches, I take a little while to reflect on the lessons I have learned since I started this whole dealing with debt process.

What advice can I offer to people in a similar position?

Work out a budget early

As soon as you realise you are in trouble get help drawing up a budget.

Spend time working out your expenditure and how you can boost your income.

CONCERNED ABOUT DEBT? National Debtline: A free, confidential and independent service funded by the Department of Trade and Industry and the credit industry. Tel: [phone] Business Debtline: Provides a free telephone debt counselling service for self-employed and small businesses, funded by banks. Tel: [phone] Consumer Credit Counselling Service: Funded entirely by the credit industry, the service offers advice to people in debt. Tel: [phone] Citizens Advice: Offers free, independent and confidential advice from more than 700 locations throughout the UK. Take our debt test

I found the advice of my counsellor a real eye-opener, he highlighted areas of expenditure I had never even thought of.

Only once you have a budget should you start on the path of dealing with creditors. Get debt advice, work out how much you can afford to repay and then start contacting your creditors.

Consider the timing of starting a family

I thought I was OK as I had a freelance contract but when this was terminated the family finances went askew.

However, if you are like me asset rich and cash poor you are very vulnerable.

If you want to start a family prepare, you will need plenty of ready cash.

This may mean selling an asset. Unless you are in the right financial position perhaps it is best not to start a family.

Cut up your credit cards

When you know you are facing difficulties, immediately cut up all your credit cards, debit cards held at banks that you owe money too and cancel all your unnecessary direct debits.

Start living with cash only or with a basic cash account, it is a major life changing experience, but you quickly realise how much money you end up saving when you actually start to hold the money in your hand and begin to think twice about spending it.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.