My First Diary

smsfrancis

Saturday 26th September 2009

Subject makes it sound like a children's book but, just like a child reading his first book, here I am taking my first real steps at debt clearance.

I guess this all came about because I was getting very sick of a continual cycle of moving my CC debt to a new card every 12-18 months, increasing minimum payments and using loans to clear the CC but always seeming to accumulate yet more CC debt... just leaving me with a larger loan and the same CC balance!

Well, I'm sick of it.

My first debts came from being at university. I graduated in 2005 and had a very large Natwest student overdraft, a maxed out student credit card and to student loan. Probably about £4k, £2k and £16k approx?

When a certain amount of time passed, Natwest said that I couldn't have the overdraft any long so I was sold a loan. This loan has been paid off by a new loan about 3 or 4 times now. I've also had tried to consolidate debt of credit cards on top of it and put a little bit on top from what I had left of my motorbike loan.

Summary is that, as of today, I have 4 years left on a £12k loan - which currently stands at about £9k, I also have £2k of credit card debt (out of £4k credit limit) and I still have that student loan - but I will talk about that later.

My wages have increased from £17.5k to £26.5k over the past four years of working and it is only recently, and through some budgeting and cost analysis, that I have been breaking even whilst paying £100 per month into a Cash ISA.

After joining this site, I realised that I should pay the £1400 that I had in this ISA off of the loan as there was a 10% interest gap between the two, this took the loan down to its current state of £9k approx.

So now I have no savings, but I do have a lower loan with lower monthly repayments, an excellent credit rating (or so Experian says) from not missing payments and there is definitely light at the end of the tunnel.

I had a car accident in January and that is nearing completion for compensation, so I should get £2700 from this if the other side accepts (should find out soon) and I will use this on the loan to reduce it nearer £6k - which will be amazing for me!

The credit card is interest free until October 2010 so I will hold off any major overpayments on this, favouring the loan instead.

Student Loan... pretty important part of this post as I've been thinking about it lots today. Basic back story is that I took a four year course, one of which was a sandwich placement, and took the full London loan on the three years and I think a small amount in the sandwich year as that's all I was allowed. I started work a few months after graduating and was straight away earning over the threshold. Had a lot going on at the time so didn't really think about it, but I had assumed that it was all being taken care of by the company as it's meant to be. Turns out that I have not made any payments to the SLC in these four years....

My philosophy before today had been that it's their fault for not chasing my employers for their money and that the longer that I got away with it, the less money that I would pay overall (until reaching 65) or that when I did start paying I would actually be able to afford it.

However, I've found out today that the type of Student Loan that I have can never become statute barred and, if they find me to be purposefully avoiding payments, that I can get a CCJ (though I think this is used more on the old loan types pre-1998 as you had to pay these yourself).

Anyways, I have decided based on this (and that I'm going to try for a new job next year so would be found anyway!!) that it's best if I contact them first and just say that I'm earning enough, you should be taking money, please do. And play it as simply as that. Should only be £80-90 per month and pay it off over the next 15 years, making me 41.

Job wise, I should be a fully qualified CIMA Management Accountant at some point next year which will see my salary increase by quite a chunk, allowing me to pay off these debts much quicker! And then start saving for a deposit on the greatest debt we ever take out... the M word.

Buffythedebtslayer

Liking the Diary Scott!

and I did exactly the same thing re bigger loans.

Next thing to do is find the payment a day thread, that is brilliant just it being there makes you aware of paying the debt off very focussing. oo and do the free scratch cards on virgin bingo and butlins (unless you can't resist lure of bingo!) 10p a day doesnt sound like much it I am finally believing that every little bit helps
Heres to you being debt free:beer:

Buffy xxx

Pippilongstocking

Waves hello - welcome to diary land

Much love - from the stripey socks clan

PS did you find the star drops

My student loan is about 14k - right now given its 0% am not doing anything about it doesn't Martin say its the cheapest money you will ever owe? I am intending next year (hope to be DF by next year except for the Student loan - scary thought - I will start saving and put the potential student loan money into a savings account)

savingholmes

welcome to diary land - at least if you get control of your money and your debts now when you do get payrises in future they will actually mean something! Good luck with your journey - with a bit of effort and determination you will get there!

smsfrancis

Thanks guys, I've formatted the diary entry (and will do the same in future) so I/we can track them!

I agree about the Student Loan, was trying to put it off forever, but it won't go away (damn rule change!) and I don't want to be told I have a CCJ and must pay it all in one go... soooo..... will start paying. (Unless you know that it can become statute barred even if income contingent?!)

Oh I did find the stardrops but I forgot my wallet. Dumb huh?

smsfrancis

Monday 28th September 2009

Today, I phoned the Student Loan Company and got my login details. Turns out that they have an address that I lived at during 2007 for a year, so the statements have probably been going there - though I don't remember one from 2006.

Anyway, I logged in and as at March 2008 (the last time they calculated interest), I owed a total of £15,792.97. Ouch!

I'm not going to really track this in my 'debt free' life style. As this site says, it's the cheapest and one of the longest loans you'll have - so just kind of sits there. It will, however, cost me between £80 and £100 per month over the foreseeable future.

I'm quite nervous about admitting to my Staff Payroll that they should be taking money from me. I still have in my head this whole Statute Barred thing, but I really must accept that these new types of income-based Student Loans will never go down that road! Accept it!!

redsquirrel80

Welcome to diary land Scott and good luck!

I don't think you will have to admit anything to payroll - when my payments became due the SLC did everything from their end via Inland Revenue and it just started coming off my wages one month, I'm sure they'll be onto it now you've contacted them.

smsfrancis

That's the strange thing, I graduated, got a job a few months later, and am still with that same company. And I've always earned over £15k since joining, and that was 4 years ago this November!

So I'm slightly in the wrong for not chasing it, but had presumed it was being taken care of. Like in the income tax line, but that's not the case I now know!

But also their own fault for not talking to HMRC and/or HMRC not sending a form to my company.

Just spoken to my payroll and they've advised that they need a form from HMRC which asks for deductions to start. Tried to ring the HMRC number at 11:30 and they were closed for the day... like.. what... I want to work there!!

smsfrancis

Thursday 7th October 2009


This month has been tough. Sure I've paid a lot off of my debt, but at the same time I have completely used up my ISA and, as such, my cash liquidity in case of emergency!

Which has happened twice in the short time since my last post. Proof that I shouldn't have done it?

First, my exam costs which I thought the company would pay for but now they won't. £380 ish.

Second, my motorbike's throttle cable snapped last night. £140 ish.

Pay day tomorrow but overdraft of nearly £400 is maxed out and no overtime logged so will be another rubbish month to come.

Woop.

savingholmes

Hi - Often when we first start trying to deal with this stuff it feels like everything goes wrong at once. You will get thro this - and gradually it should get easier!

smsfrancis

Thursday 7th October 2009


Not been on here in a while, and don't feel that I've been a very good DFW! But my personal injury claim came through recently, so have used this to clear my small overdraft and put the rest on to the personal loan.

Very pleased to have this under £7.5k at the moment. Am just waiting for Natwest to send me a letter of the revised monthly payments to see what I'll be saving each month from doing this.

Once again my exams have cost me an absolute fortune. Both in actual exam charges and in lost overtime - of which there was loads available these past couple of months!

Oh well.. greater good and all that. Exam results January 14th. E-Day. Or R-Day. Either way, a worrying day!