10 months starts now! My Debt Free Diary.

gwon

Back Story:

Hello everyone, and welcome to my diary thread. Over the past year or so I managed to amass a collection of payday loans which are now at a level that they only take the interest payments every month - enough to leave me broke every month without the principal ever reducing.

Not being able to see any kind of end in site, and becoming very depressed as I couldn't afford to eat at times, and was at a stage where I simply couldn't see a way out.

I received a call from one of those 'pay us to manage your debts' companies, who were very friendly and professional on the phone, and sounded like they could help a lot. They go by the name 'Fresh Start Finance'. While they seemed like they could help, the setup fee and the monthly % fee sounded quite high so I decided to do a bit of searching online. When I couldn't find anything about them specifically I remembered this site, and thought I'd come have a look.

I now understand that what this company were offering me was a Debt Management Plan...and while this is the best way forward for me, paying someone a big chunk of money is certainly not the way to do it! So thanks to this website, I was put in touch with the CCCS and have done the initial stages on a DMP on their website, and I'm now awaiting their paper work. So by a quick visit to this website, I managed to save a £300 setup, 17.5%/month interest payments to the DMP people AND shaved quite a few months off the end of the plan.

My Christmas pay cheque is due on Friday, this will be the last pay going in to my current bank account as these payday loan people are notorious for going in and taking money without permission. My plan as it stands, is to pay my rent the second I get paid at midnight, then the following morning remove every penny and use it to open a new bank account.

And that brings us to where I am now: a newbie in the DMP process, waiting for my paperwork from the CCCS.

And so my diary starts here:

Day 1

It's Monday the 14th December, 2009. The week before Christmas. I am absolutely broke. No money at all until I get paid on Friday. And when I say NO money, I mean NO money.

I've so far made it nearly a week with no cash, living on whatever food was in the house (a lot of toast). This week is going to be harder. This is when historically I would turn to a payday loan to get me through, but not this month. Not me.

I luckily received a Christmas Hamper last week from work, but while there's a lot in it, none of it really counts as 'food' - patte, olives etc - so technically, I think I can sustain myself, and not die before Friday but it's not going to be an easy week. I'm also a smoker, and so not being able to afford smokes is going to put me in a cracker of a mood (edit: really no pun intended here, just re-read it, and the use of the word cracker made me laugh ).

Normally being this broke would have me in tears, but the fact that I can see light at the end of the tunnel for the first time in ages, is just making me more resolute, determined to get there. So it's going to be a !!!! week, but the end is in sight.

I'll do my best to update this each day with how things are going. My aim is to be debt free in 10 months, and that is the target set out inside my DMP. It shouldn't be too much of a stuggle, but this week is probably going to be hell.

gwon

Day 1, Part 2

Just found £2 in my jacket pocket. That'll buy me bread, cheap beans, cheap pasta sauce to go with the pasta already at home..

This week just got slightly easier..

It's amazing to think how much I used to spend, and then when I see £2, I now think 'that'll actually get me quite far'

I think I actually enjoy frugal living..

gardis

Well done Gwon, sounds like you're mentally ready to tackle this beast and beat it. good luck to you.

I've got a lot of debt and although we've been steadily paying it off for a few months, 2010 is going to be the year that we crack out of the straight jacket and start living.

Being frugal gives me a huge buzz, more so than spending ever did. I hope it becomes the same for you.

Katy83

Welcome to MSE!!

Sounds like you are definitely determined, well done with that. This week does sound like it is going to be tough but just think that if you get through the weeks following this one will get easier. Be warned though this MSE-lifestyle we lead can become very addictive!

Good luck!

gwon

Thanks for the words of support. This places atmosphere helps so much, and talking to people with the same problems somehow makes it not so bad.

gwon

Day 2

The coins I found yesterday got me bread, beans, spaghetti and a jar of pasta sauce. Half the pasta sauce, and half of the pasta at home did the trick last night - and I intend on having the same thing on Thursday. Tonight is beans on toast, and tomorrow spaghetti on toast. It's tough, and I'm not exactly full at all times.. But it's certainly enough to make it.

Yesterday also happened to be good news Monday. My boss called towards the end of my shift last night, and started to explain how this had been a hard year for the company and how next year would probably also prove to be difficult.. And that as such, the bonus scheme had been severely reighned back this year, and that pay rises were non-existent....

She then went on to say that in my case, this wasn't true. I've just taken a pay rise, which will help no end with debt.

I have also been awarded a £917 bonus, which will be in my pay cheque on Friday. This means that after Christmas expenses, paying my rent and bills etc, that I should be able to take my contribution into my DMP up to a MUCH larger ammount this month, and shave a good few months off the total length of my plan

Lemon_Tree

that's great news about the bonus.

natsplatnat

YAY!! Great news on the BONUS!!! Always nice when unexpected money can be used to pay of some debt.... you never had it, so are not going to miss it!

gwon

Day 3

Payday loan companies, being the curteous and professional folks they are have a reputation for taking money via direct debit and debit card - even when you tell them you can't afford the payments, and try and make other arrangements...Even if you don't have the full ammount in the bank they take it out bit by bit and take as much as they can...

The CCCS have adviced cancelling my debit card (done) and direct debits (done). However, one of the direct debits sprung straight back up on my account (without my authorisation).

I have a meeting with the Lloyds TSB this morning at 10 to see if there's some kind of total direct debit block I can put on my account... I only make one bill payment via DD and I could easily pay that by card or giro..

If this isn't possible, I'm going to open a Citibank account and have my wages paid in there. This obviously won't be in time for this months pay (Friday) - so just in case the Lloyds can't help, I opened an Easy Access savings account online with them last night. So worst case scenario I can move my pay straight in there when it goes in and it should be safe - then I can just go into the bank when I need cash.. At least until the citi bank account is open.

Down side of this is that the Lloyds will probably charge me for any bounced direct debits - hence why I want to try and block them.

I'll report back after my meeting with how I get on.

Lemon_Tree

i have a feeling that you're better off opening a second account for your pay to go into as such companies are notorious for restarting up DD's.

good luck with your meeting.

gwon

Yeh, spot on. Lloyds tell me that they can't outright stop direct debit 'facility' on my account, so the guys can just keep remaking them.

When I suggested a second account with them, and to close the original, the woman was happy to help but suggested that the DD could 'filter through' to the new account.

As such, I went in past the NatWest on my way back to work and filled in the forms to open a step account.

My wages get paid in normally about 11pm then night before payday (ie tomorrow night), so I'm going to watch the online banking making sure there are no DD's, then move the money straight into my instant access savings account.

Then the following day, remove all the cash and put it into the new NatWest account. Following that I'll keep an eye on the empty lloyds account to cancel any direct debits that get set up (to avoid the £30 penalties). Once I'm sure my work has moved my salary over to the new account, I'll close all my Lloyds accounts.

Not too straight forward, but it should protect my money this month, and then it'll be protected every month thereon.