Debt Free Achieved! (a somewhat unusual story)

Fuzzy14

I’m very pleased to announce that I have now joined the debt free ranks. I haven’t posted here much but have frequently lurked so thanks to all who have shared their stories and provided guidance. I wasn't sure if I should post this, I’m not gloating I’m trying to be inspirational to the DFW as for the last 6 years and up until yesterday I was still one. The lesson I learned was as much as we tried to trim our spending, sometimes the difficult decisions have to be taken.

I went from £38,000 of debts in September 2012 to zero in just less than 11 months, this is somewhat an unusual occurrence and method and I doubt anybody else can do the same but you might be able to get some useful pointers.

Despite me making a good salary on £35k, working on the house and maternity leave meant we had racked up a debt of £37,959 owed to the usual suspects including family, Barclays, MBNA, Amex. I monitored it with statements on spreadsheets I know exactly how we managed to rack it up yet we were struggling to pay it back. Somehow we were always short of money at the end of the month despite the budgeting and the tightening of belts (we rarely spent money on ourselves).

I had been looking for another job for a while but nothing was coming up with the pay I needed so eventually said enough was enough and phoned a debt management company called Ashley Park. They were useless, they took money off me, they didn't pass any onto the creditors. They didn't help at all. I then contacted CCCS (now called Stepchange) who are a charity and were amazing.:T We worked out a budget, how much to pay the creditors and made a plan to be debt free in 5 years. Great, peace of mind was achieved but I still wasn't happy that it would take 5 years.

I then found a job doing agency work offshore in the North Sea in the oil and gas industry. It meant some hard choices. I had to quit my safe, comfortable salary job, it meant no financial security, it was a pretty big gamble the house was possibly on the line. Agency work pays well but it isn't for everybody. Be very careful before deciding to go down this route.

My bleakest moment came on the 4th October 2012, I had been working away from home, I had borrowed enough from the family, I hadn't eaten properly in days, I didn't have enough petrol to get back to the guest house where I was staying (paid for with a pay day loan). I managed to get some petrol on a credit card which amazingly had £10 spare to get home. I received my first (large) pay cheque the next day but I’ll always remember that moment and I won’t take money for granted again.

I worked away from home for 6 months, it was proper hard work. I missed the wife and kids, they missed me. My wife especially struggled with it. But it had to be done. I then found a more modestly paid job back home, but in the last 11 months I have earned £91,000.

I have used that money to pay off the debt (at a rate of almost £1000 per week), save up money for my huge tax bill, and took the family to Disney as a thank you for putting up with me. I now have zero debt apart from the mortgage, and one credit card with a £500 limit (rarely used and cleared every month). I’m now tucking money away in various savings accounts but I am now in the position of not being quite sure what to do now. I need to:

1) Keep putting money away for the tax man
2) Save for a rainy day as the work I’m in is very temperamental (hence the high wage) so I might be out of a job for a few months so 6 x monthly bills is a good safety net
3) I think my next step should be to pay off my mortgage early.
4) Then look at a pension as I no longer have a company one

I currently have a mortgage of £126k, 16 years left to pay and a LTV ratio of 0.72. If I use the money I've paid towards the debt and put it towards the mortgage I can have it paid off in 3 years’ time saving £35,000 in interest. I have just finished a fixed rate period, I was planning on taking out another fixed rate for 2 years and at the end of it putting a lump sum towards it.

Will I be able to take out a fixed rate mortgage (with the same lender) given that I have one default on my credit history October 2012, and despite earning a huge wage it is agency work and thus not guaranteed income? In a way it’s no big issue if I’m refused, it just means my mortgage will cost £860 a month instead of £810.

So in hindsight what would I have done differently?
I would have contacted CCCS/Stepchange 3 months earlier than I actually did. I left it too late, not wanting to face circumstances.

It would also have meant that I didn't have to quit my staff job, and my friends/colleagues. I’m happy in my new job but it was (and still is) a huge risk. The debt was costing me £700 a month to service, if I were a member of staff and debt free I’d still be comfortable.

kiwikaz

CONGRATULATIONS :j:j:j:j:j:j:beer::beer::beer::beer::beer

lilian1977

Amazing story, well done for pushing through - what an inspiration!

unimaginative_user_name

Many congratulations! It just shows what determination and a willingness to make difficult decisions can do! :T

Fuzzy14

Thank you!

It's also interesting that I've stuck to frugalness despite having a larger disposable income. I still make sandwiches for my lunch, I still shop around for energy deals, I still check my accounts for unusual spending. And I still stick to Martin's Mantra's!

Determined_diva

Thankyou so much for sharing your truly inspirational story
Well done!
DDx

Granariesgirl

Inspirational - thanks & well done.
:T

Find_The_Real

Congratulations on becoming debt free and best wishes for the future.

snookey

Thats amazing and best wishes for the future.

YORKSHIRELASS

Wow! I get frustrated when I hear people on here looking for a quick fix or a way to just magically get rid of their debts without having to change their lifestyles.

Your post is proof that if you really want to achieve it you need to work hard, really hard, and make some big sacrifices.

Well done, you are an inspiration to us all.

Muhren

That is an amazing turn around, well done to you sir!

Are there any jobs going?!