another debt free story

andyd2604

Hi to everyone who reads this!
This is not posted to get up anyone’s nose or to belittle anyone else trying to get out of debt, mealy a tale of how bad it can get and how you can sort it out EVENTUALLY.
It all started in 1999, I just started a new job and had never had a credit card or loan. For work I wanted a car so I went and purchaced a new one [hey I could - £13500] and my wage covered the cost of 3 years repayment, then I applied for credit cards It was fine to start with payed off the amount each month it was due and transferred the money over on 0%ers and payed this off too, then I got greedy realised that by transferring funds I had ‘free’ money on cards too that I could spend and pay back on the minimum amount for a year then pay it off at once. Except I didn’t.

No worry I thought I’ll get a loan for 2 years to cover this debt easy repayments and all debt in one place, so got a loan £7500 – easy repayments, but didn’t close or destroy the cards, (they increased your credit limit in those days when it was payed off) and still had the car to pay for... this spending and mimimum payment went on for 18 months until I figured that it was getting silly. So I took out a bigger loan to consolidate everything into one place £17000 over 5 years. But didn’t destroy the cards, I used some of the money to pay off the car loan the rest on credit cards. But didn’t cut up the cards. 5 years later spending had spiralled to the point where 90% of my salary was debt paying off, plus my student loan payments kicked in too, My total debt was £45000.
Deep breath time
Ok so what next. Simple one pair of scissors. Calculated the payments going out on the loan calculated the minimum payments on the cards started tto pay back the money. Slowly, I also decided to put a bit to one side each month that I couldn’t use was a deposit for a house I figured. And a target 50 months to get debt free.
The first rule I decided to use was that the smallest debt would get most attention – could it be split over the other cards could it be paid off all at once?
Secondly set dates for things eg work out at x pounds how many months would it take to pay off
Then made a table of cards and months
Cc1 15ppm
Cc2 100ppm
Cc3 250ppm
Cc4 150ppm
Cc5 70ppm
Loan 404ppm
This didn’t count the student loan debt as those of you paying it know it is deducted at source.
The first bonus was paying off the cc1 after about 2 months, this payment was then diverted to the next lowest card and the same procedure applied then next lowest and so on. When the loan finished the debit for that went to paying off the cards. So the same total was going out each month just to different debtors.
I didn’t go out very often, I lived on no money for some days, had the odd day when I couldn’t afford to eat and didn’t drive anywhere used by bike to get to work payed elec and gas and water and council tax too. Just.
This went on until July 2010, when I didn’t have any debt at all. I had saved £15,000 too all in the process...
Yes it hurt, but it worked.
So decided to get a mortgage. Only that debt to clear now. Overpayments a go go.

dalleDF

Well done!

andyd2604

thanks i'd never use credit again i just feel for those who have what seems no choice - i only came here for free solar panels!

Ellieseleven

Well Done to you and thanks for sharing:T

savingcaz

Fantastic, Well done and quite inspirational!!

craigp_2

Well done!! :beer:

mummum2

Thanks for sharing and a very well done to you! :beer:

MM2

JohnD76

Well done !

Isn't it a great feeling to see those debts disappear! :j

joshua_blue

nice one andy... well done :beer:

one of the dilemmas i have is this....

i have 5 cc's

highest apr: £5.8k has 21.9% apr
lowest balance: £2.8k has 7% apr

my calculation is roughly:

overpay card 1 by £100 p.m. clear in 28 months
overpay card 2 by £100 p.m. clear in 17 months

i try to overpay the highest balance card but find the fact im unable to get anywhere near clearing it in a decent timescale totally de-motivating & i have read differing views that an alternative strategy is to attack the lowest balance card 1st irrespective of apr's... then move to the next lowest balance card

any comments from more experienced debt busters

Soma

way to go Andy, a truly inspirational story :T

tryingveryhard_2

Congratulations on getting debt free! Hope that will me too in about a year!