My Diary

Power_and_Pride

Good evening everyone.

I've been reading a lot of stories and diaries on this forum over the past couple of weeks however this is the first time I have posted something.

I just wanted to share my story with everyone and hopefully it will provide some encouragement and knowledge that there is a light at the end of the tunnel for people in debt.

It all started in 2011, I was nineteen years old and I had a very low paying job. I am of an era where I like to have the latest gadgets and upgraded technology (to my downfall). I decided I needed a new laptop. No particular reason, my old one was fine. I just wanted a new one.

The laptop came to about £400.00 from Argos. I didn't have any money. I saw adverts and heard about payday loan companies. I decided to take out a £400.00 Wonga loan with the endeavour to pay it back on my next payday (yeah right!). I got approved straight away and the money hit my account within minutes.

After I finished work I went to Argos and purchased this new laptop. My oh my, what a debt-ridden problem it started. Upon payday, after paying my essential bills (board, petrol, phone bill, entertainment) I had barely any money spare to repay this payday loan (I think it was about £480 now after interest was added). Instead of going to Wonga and asking to set up a repayment plan, I decided to take out another payday loan for the £480 to pay Wonga back.

This obviously started the dreaded "payday loan spiral" and on my next payday, I obviously couldn't afford to pay back this new loan, which was about £530 or something. What did I do? I took out another payday loan for the £530.

As you can probably imagine, the spiral continued and I kept having to take out new loans with new companies for larger amounts each time due to the interest and fees etc. I then came up with what I thought was a good idea (hah!). I decided to take out several mobile phone contracts (4 or 5 with different networks) for the iPhone. The idea was to sell the iPhones on Mazuma Mobile or Envirofone and use the money from this to pay back the payday loans. I would then pay the monthly mobile contract of about £30 each. This never worked either.

As time went on, I had about 9 or 10 loans with different payday loan companies, and 4 or 5 mobile phone contracts that weren't getting paid.

Overall my total debt was in the region of about £17,000 which included a £4500 TSB O/D. I buried my head in the sand for the entirety of 2012. I couldn't tell anyone about it, not even my parents. I was too proud to ask for help. It was only when my parents were looking in my wardrobe for my Christmas stocking (at the beginning of December 2012) that they found a letter from SpeedCredit advising me that if I didn't pay within ten days they would send bailiffs out. They were in utter shock, as they found other letters too.

I finished work at about 12pm on the day they found them and they sat me down and asked me what kind of mess I got myself into. I didn't even know for sure exactly who I owed money to at the time or how much I owed. All I told them was it was into the high thousands.

I wish I had spoken to them about it in the first place, rather than them getting the shock of their life when reading the letters. They agreed to let me stop paying board until it was sorted, and they also helped contribute a little amount to my Hire Purchase car (which I got before the PDLs).

It was then when I started receiving letter after letter from debt collection agencies. I must have had several at one go, ranging from Moorcroft Debt Recovery for 2 Orange contracts, Fredrickson International for 2 Vodafone Contracts, CapQuest for a T-Mobile contract, Northern Debt Recovery for payday loans, Lowell Group for Very catalogue, Roxburghe for payday loans, Motormile Finance for Santander O/D, Lucas Credit Services for an Orange contract and a few more. At the time I dreaded the post coming, I dreaded hearing the telephone ring and I had to change my number because I was getting 20-30 calls a day. I didn't think I could cope, even with the support from my family.

2013 was the worst year ever. I was still in my low paid job until about May 2013 when I started working in a call centre (horrible job but good money). I ploughed every extra penny I had into my debts. I stopped going out, I stopped all unnecessary spending and sold anything of value I had to service the debts. It was a big struggle, but with the support of my close family (didn't tell anyone else apart from parents and my sister) I managed to get back on track. After I received all of the letters of the debt I owed, and checked the corresponding entries on my credit report, I sat down with my parents and worked out a plan. They suggested I make a bill tracker spreadsheet, which lists my monthly income and all necessary expenses and then work towards paying the debt off.

With me living at home, only having necessary expenses (or what I thought was necessary) of car finance and a mobile phone contract (since my parents allowed me to stop paying board) I had quite a lot of extra money after my salary was paid to plough into my debts.

It took me a full year and a bit of having literally no life, not spending money on useless crap and not blowing it on things I didn't need, but by February 2014 I am completely debt free. Although my credit score is trashed (I had about 12 defaults registered), with having no debt I am hoping this slowly improves until after 6 years when they are wiped off.

It just shows what a mess people get into with payday loans. I racked up £17k worth of debt, all over a £400 Wonga loan for a new laptop. It was completely unnecessary. I would use the excuse that I was young, but I'm only 21 now :P.

You should never ever take for granted the help and support your family provides you. I felt for whatever reason that I couldn't speak to them about my debts, I was too ashamed, too proud. It was probably the best thing that could have happened, them finding the letters because it made me realise they would only want to help. They didn't judge me. They called me a silly fool sometimes, but that's understandable. If you ever fall into a trap like this, you should always speak to those closest to you. You don't know how it feels to have someone there to talk to to give you support and a kick up the backside.

2014 has been a great year so far. I am debt free, I have a new job as an Assistant Accountant (the irony!) and I've flown the nest into my own place with the girlfriend I've been seeing since January. It has made me man up and realise the importance of saving and the importance of proper money management.

I offered to pay my parents back for the 14 months of board (equivalent to £2800) however they declined. Instead I bought us all a holiday to New York in December which I've paid for them to go aswell as my girlfriend and I, so they can't really say no to that!

Thank you for reading.

FutureDreams

Welcome. What an inspiring post
It is so easy to bury your head in the sand and not face up to the reality or put things off until tomorrow.
Having support from family and friends is priceless and this site is amazing for so many people.
Enjoy your trip and all the best for a fabulous future.

Power_and_Pride

Thank you FutureDreams. It was a long and painful struggle but I wouldn't have gotten through it without my family.

lashie

Amazing story. Well done you, lesson learnt for sure.

What a lovely way to say thank you to your parents. I am sure they are incredibly proud of you x

Power_and_Pride

Thank you Lashie. It certainly is a lesson learnt. Now if I want to buy anything I save up for it. I will never live beyond my means again.

Thank you for your kind words.