I feel like I’ve commented on most of the latest debt issues, findings, reports or surveys over the last 6 months or so. The UK media have been reporting, for the last 6 months at least, on people struggling to keep up with their debts, missing mortgage or loan repayments, falling into arrears and having their homes repossessed.

There are two routes of this problem; the first are the people in debt. Most of them will have gone down the debt consolidation road. This usually happens when, having built up various debts on credit cards and unsecured loans, people then struggle to keep up with all the repayments.

Often people will end up using credit cards to pay off other credit card debts and so the problem quickly spirals out of control with a ‘robbing Peter to pay Paul’ scenario. The idea of debt consolidation is, in principle, a good one, however the reality is that after successfully applying for a debt consolidation loan, usually a secured loan, most people will carrying on spending, racking up unsecured debts again.

This leads to the same situation where people try and borrow more money to pay off and consolidate the debts. This continues until, eventually, they are refused credit and cannot get another loan. At first these people will continue to apply to various loan companies over and over again in order to get a loan.

I seriously cannot believe how people in debt think that borrowing more money is their best solution when clearly it cannot be – how can you afford more debt if you can’t repay what you already owe? People bury their heads in the sand with this attitude.

However the problem is fuelled, it seems, by sub-prime lenders very willing to keep funding the people with this ‘must borrow more’ mentality.