Lisa's Debt Diary - The Beginning!

lvm

Hey MSErs!

Just thought that because I've now decided to tackle my debts, I might as well post my diary to keep everyone (including myself) up to date with my progress.

So my current SOAs are as follows:

Income after tax - £1, 350

Mortgage - £200.97
Council Tax - £306*
Gas & Elec - £46.00
Factor's Fees - £25.00
TV/Phone/Internet - £38.50
TV License - £12.43
Mobile - £15.00
Gym - £33.00

Fixed payments = £676.90

*The £306 council tax includes quite a bit of arrears but the final payment is this month (January) then I've got 2 month's break I think before paying the normal £117 per month.

I usually include a £100 for car insurance, service, repair but I paid the £600 annual insurance as a one off payment and the tax and MOT usually come up around my birthday and Christmas so they're paid for by the parents!

I also spend quite a bit on petrol as I travel loads for work but I get a premium rate so I could spend about £300 a month in petrol but get about £600 back to cover the cost of wear and tear. Now I make sure that although I pay for petrol through my current account, I have all payments go to a different savings account so I can at least have a little emergency fund for any home repairs or anything (and to pay for holiday etc).

So at the moment I've got £763.10 to pay for food, clothing, petrol.

I admit that looks not bad then here come to debts:

Virgin £3064.74 (sold to Link Financial)
MBNA £2779.05 (sold to Equidebt)
Halifax £2497.63
Capital One £651.24 (sold to Lowell Portfolio)
Alliance & Leicester Overdraft £437.75 (sold to Equidebt)

I also have 2 mobile contract debts totalling £419.

So a total of £9849.41 of debt.

I haven't made any payments on any of these for at least 2 years and because they've been passed on to other companies now there's no interest or fees now being added (according to the statements and demands that I've been sent).

Well, it's been rather stressful and I realised I had to do something about it when I got a Court Summons through the door as the Virgin debt have obviously had enough of me now!

So, I filled out the form you get offering a small payment of £20 a month and then wrote to the other 3 Credit Cards offering the same with the intent of increasing that in the future. I also asked if any interest or fees that were included in the total debt could be written off (little chance but worth a go!) That was on 17th December 2010 but haven't heard anything yet. The Income and Expense details I sent them show a monthly surplus of about £53 so they should assume I can't afford anything else.

I really really want to be debt free by the end of 2012 so if I'm able to keep aside £400 a month for the next 24 months I should be pretty much there (obviously I would still keep up the £20 per month payment to the 4 credit cards and I'll probably be able to pay the others off along the way).

So, I've taken a few steps to help myself already. I got rid of my car finance deal with Black Horse Finance on 23rd December 2010 and gave the car back (saves me £133.69 a month and the car was worth less than the settlement figure). Dad gave me his old car for my Crimbo. I'm doing the Virtual Sealed Pot Challenge and transferring anything above multiples of £20 to my ISA. Also trying to get rid of stuff on eBay/Gumtree.

There seems to be loads of joining challenges on MSE but there's not too many tips of what to do to earn a bit more cash (I've joined Quidco although with me saving money, I shouldn't actually get much on here, joined Toluna as well).

Anyway, any help or support anyone can give me along the way would be very much appreciated!

Thanks for reading x

[Deleted User]

Hey Lisa
Didn't want to read and run!
Happy new Diary
Good luck with becoming DF.
P
X

CommitedToChange

just wanted to pop in and say welcome :-D

Good luck with clearing the debts in 2011.

lvm

Thanks for your support Palema and CommittedtoChange!

I'm wonder if anyone can help with a wee question.

When I have more money available, should I be putting this to largest or smallest debt? If I start with the smallest then I'll reduce the number of creditors more quickly but then again there may be benefits to getting rid of higher debts first (I'm not sure).

I know in normal circumstances it's obviously the one with the highest APR but as I'm not paying interest, maybe it doesn't make a difference at all!

Any help would be much appreciated! x

[Deleted User]

lisamckinney wrote: »

Thanks for your support Palema and CommittedtoChange!

I'm wonder if anyone can help with a wee question.

When I have more money available, should I be putting this to largest or smallest debt? If I start with the smallest then I'll reduce the number of creditors more quickly but then again there may be benefits to getting rid of higher debts first (I'm not sure).

I know in normal circumstances it's obviously the one with the highest APR but as I'm not paying interest, maybe it doesn't make a difference at all!

Any help would be much appreciated! x

Hey Lisa
I would start with the debt with the highest APR then work your way down, The higher the APR the more it will cost you to pay back.
P
X

lvm

Well, I thought I'd write a little update to my diary!

Have now cancelled my £33 gym membership so that's a little extra saving and I've already had 6 NSDs this month (would have been 7 if I hadn't taken my Mum for a coffee earlier). Have decided to totally empty my cupboards and freezer before buying any more food.

Just got a lovely letter from Equidebt (2nd highest outstanding debt of £2779.05) confirming they will accept my £20 a month with first payment due in 2 days - so I'm in the frame of mind that if they accept this then no doubt the rest will!

Was actually preparing to send them all letters now offering full and final settlement (of a smaller amount) but will probably save a bit first then have a look in 6 months time now.

I'm meant to be phoning the court to see if Link Financial have decided to accept my offer, also of £20 a month. I'm wondering if anyone knows if a court agrees to a Time to Pay Direction (think this is what it was) is this essentially a CCJ?? I have no idea and was hoping it wouldn't have any further bearing on my credit file as it would be perfect in about 3 1/2 yrs time...

Anyway, I'm off to phone to set up my direct debit with Equidebt so at least that's one thing off my mind :-)

lvm

Well, I've had a rubbish day today :-(

Started off so well - made my first payment to a long outstanding debt and set up a direct debit with them. Only waiting on 2 others to respond to my offer.

Then I got an email off a solicitor who is representing Link Financial who are taking me to court for £3064. I offered to pay £1000 immediately then £200 a month clearing the balance within the year if they didn't go through with court. They replied saying they will accept the offer but still take me to court for it!! Idiots! So I'm now waiting to see if my Mum can lend me about £2.5k (I have the other £1k) to pay off the debt and any costs just so I can stop the court action (I don't want a decree seen as I would be 31 before I had a clean credit file - at the moment I'll be 28!)

So hopefully tomorrow I'll hear from my Mum will help me out (for the last time!)

Fingers crossed it only gets better...x

lvm

Well, I thought a little update was in order!

Since the whole court fiasco, everything has been going rather well.

My Mum paid off Link Financial who were taking me to court (£3370.60)...I paid her £1070.60 straight away and paying her £200 every month til the end of the year to pay it back.

2 other creditors (Equidebt and Lowell) accepted my offer of £20 per month so I made my first payments to them in January and have the next payment due end of Feb through DD.

I also have some small debt (£324 and £95) owed to mobile phone contract people so I wrote to them offering full and final settlement. Haven't heard anything back yet and not sure I will. Need to do the same with an A&L overdraft. It's with Equidebt and I've heard they settle quite quickly!

The other creditor I wrote to offering £20 a month was Halifax. But since writing to them, I received a letter from Wescot saying they are now collecting on behalf of Halifax (debt not sold though). So I sent another letter to Halifax (Recorded delivery) and a letter to Wescot telling them this.

In other news, I've totally cut back on all outgoings. I generally go to my Mum and Dad's for dinner or what not (and the 71p Weight Watchers meals in Morrisons are a God send!).

So although my signature says I plan to be debt free by the end of 2012, I think I'm going to plan to get rid of all debts by the end of this year. It'll pretty much mean a year living on not a lot but I'm sure I'll live. Just the though of having £1000 a month to do whatever a want with is motivation enough!

I've worked out I can pay my whole next year's C/Tax up front (£1171.91) as well as TV licence (£145.50) and I should have the cash to pay for next year's car insurance (it was £527.30 this year). It's a bummer it's due just before Crimbo though.

I have a week off work 2nd week in Feb and I think I'm going to use that week to totally clear up my flat - and possibly start looking at the possibility of renting out my spare room. It's a single room but I'm figuring I could probably try and get £300 a month including all bills (which would normally be £50 C/Tax, £6 TV licence, £19.25 Sky TV/Broadband, £23 Gas/Elec). I'm hoping that's quite reasonable. And hopefully I can find someone who only wants a short term thing (3/6 months) so that if I need my own space back at least I don't need to have the awkward "you need to leave" conversation!

So, I think that's about all from me!

Will be back soon xxx

[Deleted User]

Hi Lisa
You are totally organized!!
Loving the renting out a room thing and the price sounds reasonable - That could help you get DF a little quicker too!! :j:j
Good luck with it all
P
X

lvm

Had a lovely little letter from Arrow Global today (£95 mobile debt) declining my generous offer of 20% of outstanding balance but offering a 20% discount. No thank you Global, think I'll leave it today!

For the good news, got a letter from Inland Revenue people informing me they will be refunding £245 tax! Woo hoo! Getting the cash because I do lots of mileage for work and the amout spent should be added to my tax free allowance (or something along those lines!). So that will go straight in the bank account, increasing my fund which will hopefully be use to offer full and final settlements on my debts. Can't wait!

Managed to change my piggy bank cash of about £240 into notes at work today so that will also be heading to the bank on Monday.

Got an interview for the Cencus Enumerator job tomorrow and I feel sick even thinking about it! Although hopefully the thought of £750 for very little work will spur me on!

Will come back and update soon! xx

[Deleted User]

lisamckinney wrote: »

Had a lovely little letter from Arrow Global today (£95 mobile debt) declining my generous offer of 20% of outstanding balance but offering a 20% discount. No thank you Global, think I'll leave it today!

For the good news, got a letter from Inland Revenue people informing me they will be refunding £245 tax! Woo hoo! Getting the cash because I do lots of mileage for work and the amout spent should be added to my tax free allowance (or something along those lines!). So that will go straight in the bank account, increasing my fund which will hopefully be use to offer full and final settlements on my debts. Can't wait!

Managed to change my piggy bank cash of about £240 into notes at work today so that will also be heading to the bank on Monday.

Got an interview for the Cencus Enumerator job tomorrow and I feel sick even thinking about it! Although hopefully the thought of £750 for very little work will spur me on!

Will come back and update soon! xx

Hi Lisa
God luck with the Census interview
P
X