What's the worst you have heard of?

worriedwilf

Hey


Looking at some of the posts on here there seems to be far more people with much higher debts compared to a few years ago. It's not uncommon to see people on here with 60 or 70k of unsecured debt


So, what is the worst/highest case of unsecured debt you have even heard of?? A friend of mine claims that she knows 2 people who are more than 100K unsecured debt!!! Is that even possible?

FireWyrm

worriedwilf wrote: »

Hey


So, what is the worst/highest case of unsecured debt you have even heard of?? A friend of mine claims that she knows 2 people who are more than 100K unsecured debt!!! Is that even possible?

Sadly yes. I've always wondered how this was possible too, but looking at my potential unsecured debt burden, I could get myself into over £21K worth of trouble tomorrow if I wanted to. I imagine that most people can add a partner to that amount with roughly similar debt burdens, so you are looking at £40K+ without even trying.

We've seen stories of £80K+ on here in the very recent past and adding to that a mortgage, takes the total debt burden to in excess of a quarter of a million for some people.

MummyBx2

I know a fair few people with unsecured debts of close to £100k and I can't get my head around it. Ours is £30k(ish) between myself and my husband and I can't believe we managed to even get into that much mess.

Time_to_face_the_music

worriedwilf wrote: »

Hey


Looking at some of the posts on here there seems to be far more people with much higher debts compared to a few years ago. It's not uncommon to see people on here with 60 or 70k of unsecured debt


So, what is the worst/highest case of unsecured debt you have even heard of?? A friend of mine claims that she knows 2 people who are more than 100K unsecured debt!!! Is that even possible?

We started off with £82,344 of unsecured debt just over 2 years ago. This originated from a plumbing leak which flooded our house and we assumed this would be fully covered by insurance. Unfortunately when the insurance work started, it uncovered massive underlying problems with our house including dry rot, wet rot, woodworm and structural issues, none of which were covered by the insurance claim.

Every single penny of our combined salaries and our savings went on the building work for 5 months and we accrued £37,000 of credit card debt. In the end we ran out of money and the work still isn't complete, then the CC companies starting to gather around like a pack of wolves and hike the interest rates. It didn't take long for £37,000 to turn into £82,344 and for us to run out of options.

I am not saying anyone is judging but there are a lot of reasons for getting into debt and I sometimes wish we had something to show for our massive debt .... other than a house that still looks like a building site

But onward and upwards, our debt is under £29,000 now and also hope to be mortgage free this year :j

thecassman86

Time_to_face_the_music wrote: »

But onward and upwards, our debt is under £29,000 now and also hope to be mortgage free this year :j

WOW! To get from £80k+ debt down to £29k is incredible! You must be so proud of that achievement! Certainly, mortgage and debt free coming up very soon for you and i'm sure getting the house finished will be much simpler then! Congrats, inspirational story! :A

As you said too, different reasons exists for getting into debt so to assume it's always through overspending or gambling etc simply isn't correct (Not that i'm suggesting that anybody said that).

The other thing to consider is salary, i suppose. We all live to our own means (or aim to, anyway...) but if you're salary is higher then that doesn't mean you have more spare cash - it means you have a bigger house, a better car, fancier clothes and holidays - but it's still the same *stuff* really.

I guess what i mean is to think of it like a ratio. £8k of debt for somebody earning £20k/pa is no worse than somebody with £80k of debt who earn £200k/pa... But for the person who earns £20k/pa the latter figure seems fantastical. The majority of the "high debters" that i've seen on these boards also earn very high salaries.

FireWyrm

thecassman86 wrote: »

The majority of the "high debters" that i've seen on these boards also earn very high salaries.

This is true. My total debt burden as it stands today is just one fifth of my gross annual salary but feels intolerable after seeing the light a few years ago. I'm not in debt because I'm bad with money, it was more about being lazy and thoughtless over the years. It is so easy to say 'sod it, lets get a pizza' once in a while, but that then turns into a pizza a week, and perhaps more than that. Add to that a couple of bottles of wine, a night out or two and you've busted any sensible 'food' budget you might have had. This then leads to profligate food spending, you dont have an emergency fund, the car breaks, the cat gets sick, the fridge needs replacing, you leave lights on all the time etc etc ad nauseum. Over the years, it adds up and you never could put your finger on where exactly all those thousands went.

Many people I know owe far more than I would ever dare get into but I think it is all down to a perception of 'coping'. If you are coping with your debts, there is a tendency to simply ignore them and pretend they dont exist. The difference between them and me is, I know I am coping right now, but I can see the train wreck comming in the next 10 years and know I most certainly wont be coping if I dont do something drastic while I still can. I have no pension provision for instance, having sunk all of my wages into the house and family (minus what I wasted over the years) and now, I realise just how limited time to rectify the problem really is. Some people will never see until they hit that wreck straight on and slam into a brick wall while others, see as I do and are doing all they can to slow down or steer clear of it.

yamsteroo

Excellent point Cassman, any debt has to be looked at according to income.


My starting debt of £29k was more than my gross annual wages (and then some) and initially I couldn't see a way out but when I read lots of the posts on here I realise people feel equally overwhelmed by maybe £3k debt because they're already living hand to mouth with no opportunity to earn more.


It would be great if we all had out light bulb moment a lot earlier but the reality is, it's usually when we reach the stage where no more credit is available that we suddenly realise it's got out of control - and that in turn is generally linked to income.

blisteringblue

Debt is relative to income though, A £20k debt to somebody on £20k PA is in principle the same as a £60K debt to somebody earning £60K. It's your ability to repay it.

I think the general rule of thumb is if your total debt is greater than a years salary you need help. I would say 75% and you need help, but again it's all relative.

Monkeyballs

Back in the day when I was happily living in a rented flat with my girlfriend everything was super! Then when she decided to go into part time education I agreed to pay a little more towards rent and bills so she could do it...
A year later and she had become unemployed and was suffering from depression so I was paying everything!
Fast forward 5 years and after exhausting every type of credit available to me (all with the best intentions and no waste at all) I had to declare bankruptcy owing £32k and earning £8.5k
My gf and I had split up and she'd moved down south and what I was earning literally just covered minimum payments but I had to move back to my parents as it LITERALLY only covered the minimum payments, and nothing else...

I didn't learn my lesson and over the years since after taking advantage of various "credit building" credit sources I managed to get into £19k of debt but this includes half a dozen mobile contracts which I took out to sell the phone and feed a gambling problem and also several holidays with (my now ex) gf LOL but this time I have learned my lesson, oh and having a better paid job helps !!!

I've paid off a quarter of my debt in 7 months thanks to my SC DMP and hope to be completely debt free and money savvy by the time I hit 40 (April next year).

So... That's me... It could be worse though...

A "mate" of mine got a £1m recording contract with Sony 4 years ago and got a £75k advance which (despite being in debt to the tune of £55k already) blew the lot on a posh wedding, a honeymoon and a big flash car and actually managed to push himself further into debt (another £15k if I recall) only for him to trash his car, lose a foot, get dropped by Sony (some clause in the contract about his image and representing Sony meant they didn't have to pay him anything) and his wife to leave him for (cue the cliche) his best man!!!

During his brief flit with fame he basically managed to alienate everyone stole from his family to buy drugs and fall off the face of the planet.

He said it was a rock'n'roll lifestyle... He was about as rock as a turnip!

MB

thecassman86

FireWyrm wrote: »

It is so easy to say 'sod it, lets get a pizza' once in a while, but that then turns into a pizza a week, and perhaps more than that. Add to that a couple of bottles of wine, a night out or two and you've busted any sensible 'food' budget you might have had. This then leads to profligate food spending, you dont have an emergency fund, the car breaks, the cat gets sick, the fridge needs replacing, you leave lights on all the time etc etc ad nauseum. Over the years, it adds up and you never could put your finger on where exactly all those thousands went.

Wow - you've just described me there!! Do i know you??

thecassman86

yamsteroo wrote: »

It would be great if we all had out light bulb moment a lot earlier but the reality is, it's usually when we reach the stage where no more credit is available that we suddenly realise it's got out of control - and that in turn is generally linked to income.

Exactly.

Personally, i feel that they should teach kids in school about debt and finances. It astounds me that by the time we all reach 16 we've learnt about trigonometry, World War 2 and how clouds are formed and yet we're not told what APR is and how to budget accordingly.

I'd never tell anybody how to raise their children but when the time comes for me to become a Dad i'll certainly be teaching my kids about financing and swatting them up on my spreadsheet!!

Perhaps the trick to getting your LBM earlier is actually to not need one at all - we all just know from the start.