Fred proves there is life after debt

Fred J Timmins looks a model citizen as he prunes the roses outside his modest terraced house in a market town somewhere in the south of England. Yet the innocent-looking Timmins is living under a false identity. That vital initial J in his name has enabled him to escape the financial muddle of his past and to acquire a new mortgage and a respectable financial profile to go with his new life.

Timmins has been so successful in recreating himself as a trustworthy schoolmaster that a friend recently tried to persuade him to become a magistrate. Timmins declined. Every now and then he has moments of panic when he fears that his murky past might catch up with him. Only last week he breathed a sigh of relief when he read that plans to introduce mandatory identity cards had been dropped.

"Adopting a new identity seemed like the only way out for me," he said, "but it can be a terrible strain. In fact, I have two identities, because my passport and driver's licence are still in my old identity of Fred A Timmins, but in all my financial dealings I am now Fred J Timmins. I have to exercise a bit of care to make sure I don't get my two personas mixed up."

He's not really called Timmins, of course, Fred A or Fred J. Apologies to any blameless Fred J Timmins out there whose name he has borrowed for the purposes of this interview.

The building society that recently gave him a pounds 35,000 mortgage has no hint of the debts and court orders in his past, and the building society that lent him pounds 75,000 in 1989 to buy an pounds 85,000 flat in London have no idea that after dumping his negative equity in their laps he has now taken out another mortgage.

Timmins bought his flat when prices had peaked. As its value began to fall, he lost his highly paid job in an advertising agency. Debts piled up as he used his credit cards to maintain a lifestyle that he could no longer afford. Finally, like thousands of others, he decided to run away from his financial burden.

Building societies lost thousands of pounds during the property slump. A quarter of a million houses were repossessed between 1990 and 1993. The societies would like us to believe that most of these people and their feckless successors will be condemned to a lifetime of rented accommodation. In fact, many who did a vanishing act back in those years, when paying a mortgage on a depreciating asset was more expensive than paying rent, are now beginning to think that they should have stuck it out. They are blacklisted by building societies who say their chances of getting a new mortgage without paying off the deficit from their former home are nil. A computerised scheme launched in 1993 to stop fraud now vets all mortgage applications to check for multiple applications and fibs about income or debts.

Mr Timmins proves that the safeguards can be circumvented. He began to establish a new financial identity when he was still running up debts in London. He was in arrears with his mortgage, and creditors were demanding payment. Other flats in his block were selling for only pounds 60,000, which left Fred with a negative equity of pounds 15,000. He decided that flight was his best option, but first he started to dissociate himself from the notorious debtor Mr Fred A Timmins and turn himself into the punctilious Mr Fred J.

"It was a lovely flat," he recalls, "but I had to cut my losses. A friend with a flat in north London let me use his address for mail. For my new identity I changed my middle name from Anthony to John, and gave myself a new date of birth. Then I started to build up a new credit record for Fred John Timmins. My friend put me down on the electoral roll and I had a telephone line installed at his flat under my new name. I joined the local library and registered with a local doctor. It was quite simple. The library wanted proof of address, so I showed some mail I had sent to myself at my friend's address, and the telephone bill. I told the doctor I had been out of the country for years. I got some business cards printed and joined an evening class at a polytechnic where students had to have identity cards with a photograph. On the back of all this new proof of identity, I opened a new bank account, telling the bank that I had lived in America for the past five years. I gave an aunt's address in case they checked.

"For the next six months, I put small sums of money into the bank account and took small sums out - always staying in credit. Then I applied for a small loan, which I scrupulously paid back to establish my creditworthiness. Two years later, I applied for new credit cards, giving my bank as a reference."

Meanwhile, Fred A Timmins told his creditors and the building society that he could no longer pay his mortgage or debts. He was pressed for payment. Then he had a stroke of luck. One finance house took him to court. Fred turned up with evidence of his current earnings and debts. The court ordered him to pay off what he owed at the rate of pounds 2 a month to each.

"That court hearing was brilliant. It took all the creditors off my back. The building society repossessed the flat. I don't know what they managed to sell it for, but they never asked for the difference."

Fred freelanced in advertising for a while, then decided on a career change. He now teaches science, a job more in keeping with his new, sober image.

"It was daft renting," he recalled, "so I applied for a new mortgage. The only problem was life assurance, which the building society tried to force you to take out. I knew the insurance company would want to see a birth certificate, so I said I didn't have any dependents and refused to take out a policy.

"I don't feel particularly guilty about what I have done. Money didn't mean anything when I took out my first mortgage. It simply didn't occur to me that I might lose my job and that the property market was about to crash."

As the years have passed, Fred has become more confident that his change of identity will not be discovered. Yet he admits that it would be far more embarrassing to him now than once it would have been. "When I was in advertising, everyone would have treated it as a laugh, but I don't think the headmaster and governors would be too amused. Sometimes, when I sit in the staff room tutting over the court cases in the Daily Telegraph, I think what a hypocrite I am. My most dodgy moment came when I was stopped by the police for speeding. I produced my driver's licence and then gave them my new date of birth. Luckily, I had kept the change simple - same day, same year, but different month - so I waffled about 'Oh, gosh, did I say March? I meant May.' They were a bit suspicious until I said I worked at the high school. It turned out I taught one of their sons. They even let me off the speeding charge. I can promise Plod Junior he'll never get a detention from me."

Timmins is a great success as a schoolmaster. The panache and ready wit which for a few years earned him a fortune in the glitzy world of advertising is much admired by his colleagues, who would all swear that Timmins was a man you could trust.

Should the day come when Fred is tracked down and called to account for his misdeeds, he has an answer ready. And, rather incredibly, he can justify his actions to himself. "I don't think I've done anything fraudulent by taking out a new mortgage or getting new credit cards, because I'm a changed character. I am absolutely determined never to get into financial difficulties again. I live well within my means and pay all my bills on the dot. As for my old debts, I'm still paying them off at the rate of the court orders, so what's the problem?"

The Building Societies Association take a less indulgent view. A spokesman says: "When people apply for a mortgage, the application form asks for details of previous mortgages. If someone fails to reveal a previous mortgage, whether they have defaulted on it or not, they are committing a criminal offence and could be prosecuted. It is fraud. If this man still has an outstanding debt on his previous mortgage, the new lenders could find themselves at the back of the queues, behind the first building society, for getting their money repaid. Lenders are entitled to know the full financial details of applicants. Statistically, those who have defaulted in the past are the worst risks."