On the road to Freedom

ybbon66

Hello,

We finally got some daylight ahead of us today.

To summarise, we have about 30k of credit card/loan debt and a car on HP.

We originally created a budget with £250 to pay our creditors on a pro-rata basis. We were refused by the main one, FirstDirect but they asked us for £9 more than we had offered. They suggested we speak to CCCS.

We did that Thursday after about 2 weeks wait but the budget they came up with was £448 for creditors. Not impressed by that we tried PayPlan but their budget was £420 to creditors.

What is disturbing about these plans is that they must adhere to Banking guidelines which seem very out of touch. We were told we could have £25pcm for pets yet it costs £35 for insurance alone, no contingency fund (so if anything unexpected we'd be screwed), no satellite although we have no ariel so we'd have no TV in effect and various other very short amounts - £16 a month for two adultsto have haircuts!

We looked at finishing the car HP early but we are £4K under the half-way point so that was not easy - if we had £4K we wouldn't need to do a plan.

We then went back to our budget and realised we had £300 a month which would allow us to pay FirstDirect their £130 and a bit extra for the others if required. We contacted them all today and we have now got separate arrangements with all our creditors for £270 - ie a lot less than the debt management plans.

We aim to save as much as we can and then buy a cheapie cart in about 8 months when we have made 50% of the payments to the HP and walk away from that.

Just to let anyone in a similar predictament aware, that you may find it cheaper to negotiate with the creditors yourself rather than a DMP, it;s worth a shot and it may save you a lot - £170 in our case which is enough to pay everything else and save!

Now all we need to do is stick to our budget.

N.

ybbon66

in fact we owe less on the HP than we suspected, so only 6 months before we can get rid of that 497 payment.

get_me_out

Some companies add charges for managing your debts, hence they ask for more.

CAB told me its best to deal yourself.

ybbon66

This was CCCS and PayPlan - the free charity plans so no there shouldn't be any additional charge. Their numbers were based on banking guidelines.
Had fun with Barclaycard today as they claim they had no record of the agreement. Sorted them out and absolutely stuck to my guns about amount to pay.

rubydoiwannabee

Hi there and welcome

Thanks for your post, very interesting. I am surprised to hear because normally their budget guidelines are quite generous and just to comment on your pet situation, the insurance would surely have come under your overall insurance budget rather than the amount allowed for pets, also are you sure you can't get your pet insurance cheaper, have you tried quidco, you might be able to get a cheaper policy and cashback?

Why don't you post your income and expenditure up on these boards and let the people with lots of experience of cccs and payplan, self managed dmps and just all round good money saving experts have a look to see if they can suggest further areas of savings for you.

Good luck with your plan

ybbon66

I can't believe my first post to the board was that long ago!

Well we are still very much on-track and with a large amount of daylight ahead. Currently we have 4 credit cards:

MBNA is the worst, the amount is still £6200 or something like that but horrible interest rate, FirstDirect is similar but that is reduced interest, £4700, CapitalOne is less than £1000 and Barclaycard is £1400 or so.

Our current plan has FirstDirect paid 11/2013, CapitalOne 04/13, Barclaycard 07/2013 and MBNA sometime in 2014.

Although it would be good to pay off MBNA first, the way we did the payment plans meant we are paying more on the lower interest cards which is not ideal but not much we can do as MBNA was on an introductory rate when we made the plans.

As it happens, Mint made a default notice which still is on my credit rating which makes it awkward but my new long term plan is to pay as we are, add more to MBNA if and when possible (CapitalOne and Barclaycard which total £150 pm will be put onto MBNA when paid in full) and then once FD finishes in November 2013, look to get a new single credit card with a long 0% BT and transfer MBNA onto that continuing to pay £300+ onto it.

I created an excel budget sheet (one I created, not Martins) that I have religiously filled in since we started this, and a newer one that is a basic one tracking what is left on the credit cards.

Anyway, from starting out looking at £30K or so, we are very much on track at about £13200 and looking to mainly clear by the end of 2013 and fully clear sometime in 2014. In truth, had we been absolutely rigorous in clearing everything as soon as possible, we probably would be clear now but we've been able to spend on redecorating, changing car and other things simply by sticking to our overall spending - ie we always paid what we had to pay first.

So summary:

It may seem grim at times, but stick to your plans and you will get to see daylight!
Track your spending, I use a standard double cash book to write down everything from our bank statements, and then put that to excel afterwards.
And good luck everyone, you CAN do it :T

p.s Anyone know if it's worth trying to get a lower rate from MBNA? right now I pay £200pm but £130 of that is interest and if so, how can I go about that? will they lower it if I just call and ask? They're not going to put me on a plan as I've clearly managed to meet the minimum for the last 4 years already.

poodlegal

We just tried with MBNA in a similar position to you and they said no. Could be worth a try though as every case is individual.

dazla

I have to say £16 a month for two adults to have haircuts seems perfectly reasonable to me. My barber charges £6.00 and I go once a month

Daz

ybbon66

dazla wrote: »

I have to say £16 a month for two adults to have haircuts seems perfectly reasonable to me. My barber charges £6.00 and I go once a month

Daz

Not sure we ever did that tbh, but note the original post was 2008, things have moved on since then - just realised I pay more now to FD than we paid all creditors combined when we started.

ybbon66

Oh my, I should update more often..

1 left now, still a biggie with MBNA but it is about £5K now. Paid off FD and Barclaycard in full this year. The final pay off of FD not showing in my report yet but I intend to pay off another £1-2K on MBNA in the next few months then look at a BT and pay off the rest, if I can get one, within the allotted interest free period. Either way, should be clear this time next year. Looks a lot different to starting out at nearly £30K

ybbon66

Debt free in August this year all being well. Out of the blue, FirstDirect made two PPI offers totalling nearly £2k, with that, and squeezing out to £500 month we can pay off the last card this year.

Never ever again will things get so out of hand. Also time to dig out all those old agreements to see if can pursue for more PPI as I'm pretty sure we had one or two others that may well have had it on and we haven't ever tried to claim.

Scary looking back at the 2008 original post as to how much we've got rid of - and we lose the default this year too, all good news. Hoping 2014 carries on in the same vein.