Dealing with my debts and learned my lesson.

UrbanDanceSquad

Hi all,

Hopefully this might be some encouragement for others. However, I've been real stupid and so here goes.

Originally, I typed out a real long post which I suspect many of you would have got bored with. So I've decided to try and summarise my 20 year debt career.

At the moment, I'm aged 40 and have been in debt since aged 20. Started with a small OD for a holiday and then progressed to loans, CCs, car finance, student loans etc. Have always paid off the debts, on one occasion with the help of my parents AND then went straight back into debt again? My reasons and excuses are my lack of financial discipline, !!!!lessness, greed, spending beyond one's means etc.

As usual, when debt commitment looked to be under control I would just rack up the debt again. The last time I did that was back in 2010 when I got accepted for 3 CCs. Amex at 8k limit, BarclayCard and Capital One at 2k limits each. Within a year, all three were max'd out and I have spent the last 4 years more or less servicing the debt aka paying the minimum payment. The CO and BC cards' APR weren't so bad but the Amex card was a killer.

Back in the day when I took out the cards I was on around 24k per annum and could have paid more to pay down the cards. On occasions, I did make the effort to pay them down, but only to then later rack them up to the limit by using them to pay for holidays and gadgets.

About 2 years ago, I decided to go contracting to earn more money and although I scored a few gigs the monies earned + contract duration were not enough for me to whack the debts. I got a few short term gigs but had to be cautious about 'bench time' aka out of contract. Just as the money was rolling in the contract(s) would not be renewed. After last November, I decided to hold out for gig longer than 3 months which actually saw me on the bench for 6 months. Debt repayment suddenly became a problem and I resorted to pay day loans just to meet minimum payments on an overall CC debt of around 12k, 5k of Eurodio student loan repayments and also living costs. When those payday options were exhausted, I had to resort to borrowing money off my parents. With regards to the student loans, I was assessed whilst in contract so could not defer as easy as I could when the loans were with SLC.

To cut a long story short, I finally landed the 'long term' gig and just at the time when 'things' were approaching critical mass. I met the payday loan commitments, parental loan commitments but also had to pay HMRC commitments for the previous year's contracting. I'm not talking loads of money here, but a significant amount which had to be paid/satisfied on a certain date. Of course, my parents were flexible with when I paid them their money back, however, I paid them back. And yes, I blew away my previous financial year's Corporation Tax money in the business bank account whilst on the bench, hence the HMRC commitments which had to be met this year.

So, to clear up the 'new debt' (servicing old debt and living costs) accumulated over the previous 6 months on the bench took around 4 months of invoices. I'm now paying off the 'old debt'. Last week I cleared the balance on the Amex card which was just shy of 8k and I have requested the account to be closed. In a few weeks time, I will be clearing the debt on the CO and BC cards and will close those too. During Jan 2016, I'll be clearing off the remaining student loan debts.

I've been told my contract will be extended post Jan which is good news. However, come Jan, I'll be firmly back in the black and for the first time in 20 years. Although I have no missed payments, defaults or CCJs, the past year has been a real eye opener for me. I took a punt on contracting and the first year was hard. Yes I got gigs, but they were very specific short term gigs which put me in a tougher spot than when I was a permie. However, I held out for a longer term gig and despite the moments of dread, the gamble is starting to pay off...the debts.

Over a 20 year period, I screwed up and to the point that events would have ruined me had I not landed my current gig. The past year has opened my eyes to the danger of debt. Pity I didn't learn back in the day but I suspect things had to get to near chaos before my !!!!less brain realised that things were going to pot.

It's nearly over, and it'll be over for good!

Thanks for reading.

UrbanDanceSquad

Just an update on this thread rather than create a new one.

I have now paid off the BarclayCard and CapitalOne credit cards, just shy of £4k. I phoned them, made the payment and asked for the cards to be closed. CapitalOne were OK but BarclayCard preferred to offer me 'rate increases', smaller APR and "but sir, what if you have an emergency" to which I replied "I'll use a dividend and/or savings". So that's it and all CCs gone, which had been around 12k and whacked within a month of each other.

Next target is 5k of Eurodio student loans which will be paid off this coming Jan.

Dobbibill

Well done on clearing your debts - you should be very proud of yourself :T

I'm glad your work has turned around for you too.

quackers82

Sounds like me 33 and still in debt and have been since 18. All i wanted when i was 18 back in the Year 2000 was a Visa card on my current account with Lloyds TSB, not Visa Electron as buying online did not accept it. Guy in branch told me we don't give Visa on current accounts until you are 19, but the system is showing as you are eligible for one of our credit cards with a £1000 limit which has Visa.... something i never wanted, but was my only route at the time to a Visa card and thats where my slippery slope started.

As you do when you are young and stupid with money i maxed it, credit limit got increased, then maxed again, so just got CC after CC until i ended up with 9 cards and a loan :eek: . Hit the limits of limits in 2003 at 21, parents bailed me out paying them all off and getting one loan in their name to pay it off which i then paid monthly for.

Paid that off in 2008, 2009 due to relationship breakup i hit problems and turned to the cards and just went reckless, then by 2011 it got to £53,000 owing in debt so had to do something (again!). :eek::eek: Down to £16,000 now, hoping it all to be gone by this time next year, its just really annoying now seeing almost £1700 a month go out in debt repayment and having spent like yourself all my 20's, and half my 30's paying off debt non stop Luckily my pay increased a lot over the last 3 years, and once its paid off i should not need to get debt as my surplus without debt repayments is a very comfortable amount.

When i look back my mistake is having more than 1 debt, i.e. 9 credit cards. I should have just stopped at 1 and no more, and not used it to live off. So once its all gone this time round i will be keeping just 1 Credit Card and only using it when needed, like some hotels will only accept credit not debt cards for deposit. I don't want to repeat my 20's again!

UrbanDanceSquad

quackers82 wrote: »

Sounds like me 33 and still in debt and have been since 18. All i wanted when i was 18 back in the Year 2000 was a Visa card on my current account with Lloyds TSB, not Visa Electron as buying online did not accept it. Guy in branch told me we don't give Visa on current accounts until you are 19, but the system is showing as you are eligible for one of our credit cards with a £1000 limit which has Visa.... something i never wanted, but was my only route at the time to a Visa card and thats where my slippery slope started.

As you do when you are young and stupid with money i maxed it, credit limit got increased, then maxed again, so just got CC after CC until i ended up with 9 cards and a loan :eek: . Hit the limits of limits in 2003 at 21, parents bailed me out paying them all off and getting one loan in their name to pay it off which i then paid monthly for.

Paid that off in 2008, 2009 due to relationship breakup i hit problems and turned to the cards and just went reckless, then by 2011 it got to £53,000 owing in debt so had to do something (again!). :eek::eek: Down to £16,000 now, hoping it all to be gone by this time next year, its just really annoying now seeing almost £1700 a month go out in debt repayment and having spent like yourself all my 20's, and half my 30's paying off debt non stop Luckily my pay increased a lot over the last 3 years, and once its paid off i should not need to get debt as my surplus without debt repayments is a very comfortable amount.

When i look back my mistake is having more than 1 debt, i.e. 9 credit cards. I should have just stopped at 1 and no more, and not used it to live off. So once its all gone this time round i will be keeping just 1 Credit Card and only using it when needed, like some hotels will only accept credit not debt cards for deposit. I don't want to repeat my 20's again!

Excellent post and I'm glad you're digging yourself out of it all.

Larac

The frightening thing is, that according to a programme on Radio 4 this week, people are now taking out more loans and credit, than at any other period over the last eight years. The cycle of debt seems to be opening up again.

Having been through that 'cycle' previously and on a DMP for last 3 years, would not wish to go through that again...

AimHigh

Wow. Massive congratulations to both UrbanDanceSquad and quackers82..

Well done on digging yourselves out of truly deep holes and all the best for the future!

shaundiamonds

I can understand about contracting - it's definitely a risk that's worth it! I was lucky and landed a long term gig within 3 months of leaving last permie job (still there now actually) and the income quickly eliminated all my debts from a fairly lavish lifestyle that I always intended to pay "one day".

You always need a war chest with contracting though - as scale downs hit us first. One thing I have learned is that when a place starts to trust you and wants to renew - negotiate to extend your notice period. A contract manager taught me that valuable lesson. Also never touch your corporation tax or VAT money! Its not "Your" money and it's bordering on illegal to use it!

Another thing I've learned is that between 40-50 (I'm 39 atm) are your prime earning years if you have specialist skills that can be contracted out - so this period is a great time to ditch the debts from youth, save and invest.