The rise and fall... Back on the up :)

emmington_2

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catmiaow

emmington wrote: »

Well... where to start? I'm 25 years old and it all began when I turned 18 and was instantly accepted for a £3k credit card with Barclayard :mad:. I ran that up quicker than it took them to accept me for it. I also obtained about a gazillion store cards at a mega 30% interest rate. The biggest one being a House of Frazier store card with a limit of £2.5k. I ran this up to the limit as well. Other store cards included New Look, Dorathy Perkins, Top Shop, the list goes on, all with limits of up to £1k. Before I knew what the hell was going on they were all maxed.

After about 6 months I decided to get a loan to pay off all of this debt that I had so quickly accrued. I got a loan with Egg for £10,000. I used the loan to pay everything off. For some reason, only known to myself at the time, I ran all of the store cards and credit cards up again whilst having the loan, which was for the purpose of paying them off.

Shortly after this I obtained a top up on my loan of £5k to put towards a deposit for a new car. It was a really cool car, brand new, and I wanted it, so all that was going through my mind at the time was that I would go to any lengths to get it.

As time went by catalogues and mobile phone contracts came into the mix as well, also with extremely high interest rates. I think at one time I had 3 mobile phone contracts on the go and only 1 phone. Because I, the spending queen, had to have the latest phone, regardless of the fact that I already had one.

I suddenly found myself being 19 years old and in the region of £45000 in debt :eek:. Oh my god what the hell was I thinking. :eek: I had a job which paid about £1000 a month. I was living with my parents and had no rent or food bills to pay but I found myself with more outgoings in debt than I had money coming in. The situation had become massively out of control.

My mum had a suspicion that I had trouble paying things and she did help me by taking control and getting rid of all the store cards and catalogue bills (the only debts that I admitted to having). She never knew the full extent of the problem. With my Mum paying off all the little stuff I found myself in a more manageable position and was able to pay stuff off little by little. I also got a promotion at work and was now earning double what I had been. I however generally always had the attitude, stupidly I know, that the money I got paid was mine and sod all of the debtors. I pay for this mistake today as my credit history is in ruins for non payment, I cannot get accepted for anything, including mortgages .

When I turned 21 the situation got pretty bad and I broke down in tears to my parents on the phone :(. They, after a very very very long lecture, sent me down £25000 to pay off my debts. Again, they did not know the full extent of the problem because I just couldn't bring myself to tell them. I am left with the debt that I have outlined below. For the last year or so I have been coasting along with this debt having obviously never learnt my lesson the previous gazillion times. I have sometimes worked mega over time and paid off up to £800 at a time on credit cards but I have not been completely committed to tackling the problem.

I am now ready and willing to tackle my debt :T and I strongly believe that by having not told the parents the full extent and leaving myself with the final amounts of £11k aprx, I will learn my lesson and never fall into the trap again. And indeed, there is a silver lining to every dark cloud.

The purpose of my post really is to update people on how easy it is to fall into the trap. Especially young people who want all the latest stuff. I had all the latest stuff but being the age I am now, I have quite literally, nothing to show for the debt apart from a massive chunk of my wages being taken away from me and mortgage rejection letters.

I am looking forward to fighting the battle and coming out the other end

Emmington


Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details[/b]
Monthly income after tax................ 1750
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1750

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 50
Rent.................................... 600
Management charge (leasehold property).. 0
Council tax............................. 83
Electricity............................. 12
Gas..................................... 12
Oil..................................... 0
Water rates............................. 2
Telephone (land line)................... 0
Mobile phone............................ 60
TV Licence.............................. 23.75
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 5
Car Insurance........................... 30
Car maintenance (including MOT)......... 20
Car parking............................. 94
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 7.59
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 2
Haircuts................................ 25
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1286.34


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 1500
Car(s).................................. 6000
Other assets............................ 0
Total Assets............................ 7500


Secured & HP Debts

Hire Purchase (HP) debt ...... 6000.....(50).......0
Total secured & HP debts...... 6000......-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Credit Card....................1250......30........18.9
Loan...........................2000......120...... .29.9
Loan...........................1500......50....... .5.4
Total unsecured debts..........4750......200.......-


Monthly Budget Summary
Total monthly income.................... 1,750
Expenses (including HP & secured debts). 1,286.34
Available for debt repayments........... 463.66
Monthly UNsecured debt repayments....... 200
Amount left after debt repayments....... 263.66
Personal Balance Sheet Summary
Total assets (things you own)........... 7,500
Total HP & Secured debt................. -6,000
Total Unsecured debt.................... -4,750
Net Assets.............................. 2,750

Well done for admitting to your debts. :j Your so lucky to have such helpful parents. Just a question have you considered cashing in your shares and paying off a loan?

Bells&Whistles

"mobile phone contracts came into the mix as well, also with extremely high interest rates. I think at one time I had 3 mobile phone contracts on the go and only 1 phone. Because I, the spending queen, had to have the latest phone, regardless of the fact that I already had one"

I know that feeling! have only just got back down to one contract and now hankering for an I-phone...which I wont be getting but am almost itching for! When I started this journey I sent my decent phone to envirophone and started using a cheap brick which I will have to keep until I am debt free now... oh well, lessons learned and all that!

Good luck with the rest of your journey!

westiedog

Well done :beer:

I bet you feel loads better now. Keep up the good work x :T:T:T

redpete

emmington wrote: »

My shares unfortunately are stuck in a ten year agreement so I can't get hold of any of the money until at least 2017. I have taken a few of these agreements out each year with my work for 3 years now and they take the money straight out of your wages so if I never see it, I won't miss it. And, it means that I am in for a lump sum of at least £3k each year from 2017.

Are you still contributing to these schemes? If so the net monthly cost to you should be included in your SOA as it is discretionary spending/saving. It would still be your decision whether to continue putting this much by each month but you need to compare the certain cost of interest on your debts against the possible return in the future from the saving (remember that shares can go down as well as up, are you sure you will get minimum £3k).

Even if you do not use the extra monthly income towards debt would it be better used to increase the deposit on a house for when you are able to get a mortgage?

BEAT_THE_DEBT

well done! Who knows why we do silly things? The main thing is you are sorting it now. Perhaps though you could get some counselling to help you understand the raeson for overspening in the first place i did and it was very enlightening!!x Good luckx:T

Kylie

Mobile phone £60 This is VERY high - can you drop to a lower contract?

TV Licence £23.75 Is this right?

Kylie

So you currently have a surplus of £460 to pay off debts each month: £50 for the secured loan, £200 min. payment on the others.

This means £210 to "snowball".
Suggest: Loan...........................2000......120...... .29.9 for the next 6 months and this will be gone.

Next: Credit Card....................1250......30........18.9 After 6 months balance would be £1070 and you can put aside £360 per month for this. So in about 9 months, this will also be gone.

In 9 months: Loan...........................1500......50....... .5.4 will have a balance of about £1050. And at 9 months you can start paying this off at £410 per month (paid off by month 10/11).

So by month 11 all your spare cash can go onto the big one which would have a balance of £5450. You will have £460 per month to pay it off.

Simples

(these are rough estimates btw - prob. some a little off)

PurpleJay

Just had to say well done you! Paying off your egg loan is great :j

It is so easy to get into debt. When I was 21 I changed my bank account and was offered 2 credit cards and without a moments hesitation I just thought great I can go shopping - no thought at all that I had to pay it back. I went on to get further cards and consolidation loans. By 24 my ex and I probably owed about 20k between us (incl his car loan - he sold the car to help fund the house deposit, unpaid NI contributions - he was self employed, consolidation loan credit cards, store cards, catalogues - we furnished our house on the never never - a suite from DFS, carpets on interest free credit and stuff from catalogues) and on top of that now we had a mortgage to pay. We did curb our spending a bit then but it was to late our outgoings were more than our incomings and my oh acted as though if he worked as hard as he could, he could go to the pub when he liked!

By the time I was 26 we were splitting up, we sold the house paid some debts with the little we made and I got a further consolidation loan for my share of the debts and went back to my parents. I had a £500 overdraft and my bank closed my account because I wasn't paying it back! Very scary at the time. It was my lightbulb moment though and I haven't got in a real mess again since (that was 10 years ago). I spent a year getting things paid off and was then able to get a mortgage as I had restored my credit rating sufficiently - :j

Well done for having your lightbulb moment and for what you have achieved so far. And good luck.

Happytogetdebtfree

Well done emmington keep up the good work :-)

property.advert

Great to hear and not wanting to rain on your parade but there is still the bank of Mum and Dad !