What happens when you pay off all your debts?

bramble1

I am currently working hard with my OH to pay off our debts. We're ticking along with our repayment plans, but doesn't feel like we're making much progress.

I need something to encourage me to put more effort into getting more money saved to pay my debts off sooner - but what happens when they are paid? I appreciate our credit won't magically be good again...we still won't be able to get a mortgage...what are the benefits (apart from no debts) to getting debt free as won't we still be bad news in terms of borrowing money? In which case....should the spare money we get go into savings to get a bigger deposit for a house so that credit ratings don't matter as much?

rdchick

That 6 years after your default dates you will have a clean bill of health, all will be forgotten (when you're out of the DMP) and you'll be able to pay in cash rather than credit - no more sleepless nights! horrah!

bramble1

Is it 6 years after we repay the debts or how to we find out what the default dates are?

The only thing i really want to do is buy a house - if we can't get credit for 6 years from our debt free date - then surely saving for a bigger deposit is better? I'm so confused!

Trajal

For me anyway, it boils down to a combination of security and lack of anxiety. This is how I see things at the moment:


Me now with debt:

Panic about your income, if you lose your job suddenly you can't keep up with repayments what will happen? Lose everything, put strain on relationship feel failure for not being able to provide and having things repossessed etc. Actually losing sleep over this.

Me in the future without debt:

Nothing needs to be repaid, if you lose your job it will be a hassle but will be able to make it on savings for a little whilst as you find a new job.

anh1904

Why the desperation to buy a house in what appears to be a falling market?

Why go through the stress and strain of buying when renting is cheaper, more flexible, and much less of a noose around your neck?

bramble1

Because rent here costs the same as a mortgage would - It's not cheaper unfortunately, I find renting very stressfull and don't really feel like i can totally relax in what should be my own home.

Plus the only thing i've ever wanted to do is own my own property. It's my life goal. Rent isn't really more flexible when you've bad credit and a dog - makes it much harder to find properties!

ElmerFudd

Best thing will be that your money will be yours and not the banks (no interest to pay- can't wait!!!).

anh1904

What happens when you pay off all your debts? I think it starts with Champagne, and some self pampering for all of the things you have foregone to get to that "debt free" place.

Not having to think about "what if" will surely be a place making any painful journey to get there wholly worthwhile ?

iolanthe07

I think it starts with Champagne, and some self pampering

So the cycle starts again..........

jennikitten

anh1904 wrote: »

Why the desperation to buy a house in what appears to be a falling market?

Why go through the stress and strain of buying when renting is cheaper, more flexible, and much less of a noose around your neck?

Because property is a bargain right now and there's a limit to how cheap it can get due to a finite amount of space and a growing population? Because some people want to settle down and feel secure? Because some people want more control over their living space?

I'm not saying that buying is better than renting, but they both have advantages and disadvantages...it's not really a question of debating that side.

Back to the original topic...I don't consider myself to be in debt, though some people would (student loan & mortgage). The advantages, from my perspective...

If I want something, I'll buy it. Obviously there's a limit because I'm not going to buy a car or a £500 pair of shoes, but if I fancy going out for a nice meal or buying a new top I will. I can be more spontaneous, if someone invites me on a night out I don't have to feel guilty, or check my balance, or only have one drink. I can buy nice things for family and friends for special occasions without needing to save up or regretting it later. I can spend more quality time with people as I can afford to go and visit them (I have friends and family all over the country).

Having money also gives you the chance to develop your own interests (and your kids' interests if you have them) further, whether it's a Zumba class, a karate course, Italian lessons - things which enrich lives further by combining meeting people with learning skills.

If I'm stressed out, I can book a holiday or theatre tickets or arrange something in advance to look forward to.

No stress and anxiety as someone else mentioned - I don't have any around money. Which is good because that means I have more for other areas :T

JimmyTheWig

iolanthe07 wrote: »

I think it starts with Champagne, and some self pampering

So the cycle starts again..........

The cycle doesn't have to start again, because...

What happens when you become debt-free? You have no more debts to pay!!
That means that the money you are currently using to repay your debts will be yours to do with what you like.
That, I would have thought, would have to be the biggest motivation.
If that's doesn't sound like motivation enough, post what you currently owe, what interest rate and how much you are paying each month and I'll see what I can do with the figures.