My Positive Experience

BacktoBlack

Hi everyone,
I've been reading these forums for a long time and felt that I wanted to share my positive experience in case anyone else is lurking, feeling overwhelmed and anxious about their situation.

I'd been struggling to keep up with my credit accounts for years but still the creditors would up my credit limits, entice me with BNPL and I fell in to that trap that I'm sure many of us have of spending money we don't have, on stuff we don't need just because it's so easy to do.

When I separated from my husband two years ago and my household income pretty much halved I continued to try and keep up with things , taking loans out to pay other loans, using my credit cards to get by each month and needless to say this didn't quite work out in the end as interest grew and grew. Then my son going to university meant a further big drop in my income and I was in a desperate struggle to keep afloat.

I used the debt remedy tool and felt physically sick when the best option suggested was bankruptcy. I knew I couldn't take this option up as I work in a job connected to finance and I felt like maybe my situation could change in the next year or so , if I met someone who moved in or got a promotion or whatever, So I began the process with Stepchange to set up a DMP.

I cannot rate this charity highly enough. They are so helpful on the phone and although the process can be a little slow and frustrating waiting for things to get set up , having to pay just one amount per month and know my creditors have been contacted with all my income/expenditure details and so on has been such a huge weight off my mind. But really I'm not here just to sing the praises of Stepchange, I have actually been so impressed and relieved at the attitude of the collection agencies and creditors involved.

It wasn't quite as easy as letting stepchange contact everyone because of having to set up a new bank account before I could allow them to write to my current banks meant that I needed to speak to most of my creditors to let them know I was in financial difficulty and that Stepchange would be contacting them on my behalf. Now I have contacted my creditors before about reduced payment plans and explaining my income and expenditure was such a nightmare because they'd ask about other creditors and how much I was paying. Quite often they'd reject my payment offer because it was more than I could afford etc. But it was chicken and egg really as my debts were all varied amounts it was difficult to tell one creditor how I was paying another if I hadn't called the other yet... I never thought offering them all the same when I owe one 3k and another 1200 would work and it was just a confusing mess trying to sort it myself.

However speaking to them all , without exception, was way less stressful and humiliating than I expected. Something has obviously changed in the industry now (i had a similar situation after my last divorce 20 years ago) as every person I spoke to was respectful, sympathetic and polite. There was no tone of disapproval or pressure to make payments. All of my creditors explained the process and how I'd still get default letters but not to be alarmed as it's just the standard protocol for long term payment plans. Each phone call I made left me feeling lighter and less stressed than when I was burying my head in the sand for all this time and I wish I had known how easy it would be to get this all sorted a long time ago as my debt would have been significantly less.

Things I have noticed and learned from the debt remedy....

Do not feel guilty for overestimating your expenditure. You will find yourself with what seems like "spare money" after your monthly amount comes out BUT the stepchange advisor very helpfully explained that this is not spare money as such but needs to be put away for things I would usually buy on credit, such as washing machine packs up, car fails MOT , relative dies and you have to stay in a hotel for the funeral (these are my own examples of things that have completely stumped me in the past).
Keep multiple accounts with your new bank account. One for bills, one for spending and one for savings/emergencies. This has been a godsend for me as now I am not using an overdraft or paying fees left right and centre I can actually control my money and keep on top of where I am with my spending.
Speak to your creditors/collection teams. It will not be as stressful or humiliating as you expect it to be and doing so means your charges and interest will most likely go on hold, at least until they've heard from stepchange with your payment offer.
Dont assume that your debt free date prediction is accurate. Mine says I'll be debt free in 2037 (11k date £50 a monh) but I know that I will be at a stage where I can up my payments in the next few years and this will bring my date forward considerably.
Dont stress about your credit rating. I think it was a Dave Ramsey video on youtube that made me realise how unimportant the credit rating is for me right now. He says "Why do you want a good credit rating anyway? So you can borrow more money and get more in to debt" or something along those lines. This really hit home and made me realise how reliant on credit I've been all my life! Save for stuff and buy what you can afford.
Seriously look at your spending - But after you've done your income expenditure! I had a horrible habit of going into supermarkets and spending £40 each time. Now I have a strict budget and do a meat shop and a supermarket shop once a month and I am pretty much done with spending on food for the month. If I spend less than Stepchange estimate for my food budget then that is extra money to put away for emergencies or occasional unavoidable overspends.
Be honest with people about your money situation. There is no point pretending to friends you are not skint and signing up to things you can't afford to do.

KEEP POSITIVE - because nothing is ever as bad as you think it is and there is always a positive solution to every problem. Please get the necessary help if you are feeling depressed/anxious because at the end of the day your mental health is 100% more important than your credit rating.

All the best
Lexi xxx

Willing2Learn

Wow!! You've kept quiet for all that time and then open with the mother of all posts!!

Thanks for posting. It's nice to read someone's story and their thoughts on how best to cope with the emotional rollercoaster.

a_silver_lining

Well done Lexi

What a lovely post to read. It really calmed me down after a stressful day. I'm going to stop my stressing for the evening and allow myself to relax x

Best of luck with your DMP xx

D_M_E

Your last two points - Be Honest and Keep Positive - should be added to one of the stickies at the top of the forum.

Keep smiling and look forward to a better, debt free future - if it's not already arrived!

datlex

BacktoBlack wrote: »

Do not feel guilty for overestimating your expenditure. You will find yourself with what seems like "spare money" after your monthly amount comes out BUT the stepchange advisor very helpfully explained that this is not spare money as such but needs to be put away for things I would usually buy on credit, such as washing machine packs up, car fails MOT , relative dies and you have to stay in a hotel for the funeral (these are my own examples of things that have completely stumped me in the past).
Keep multiple accounts with your new bank account. One for bills, one for spending and one for savings/emergencies. This has been a godsend for me as now I am not using an overdraft or paying fees left right and centre I can actually control my money and keep on top of where I am with my spending.
Speak to your creditors/collection teams. It will not be as stressful or humiliating as you expect it to be and doing so means your charges and interest will most likely go on hold, at least until they've heard from stepchange with your payment offer.
Dont assume that your debt free date prediction is accurate. Mine says I'll be debt free in 2037 (11k date £50 a monh) but I know that I will be at a stage where I can up my payments in the next few years and this will bring my date forward considerably.
Dont stress about your credit rating. I think it was a Dave Ramsey video on youtube that made me realise how unimportant the credit rating is for me right now. He says "Why do you want a good credit rating anyway? So you can borrow more money and get more in to debt" or something along those lines. This really hit home and made me realise how reliant on credit I've been all my life! Save for stuff and buy what you can afford.
Seriously look at your spending - But after you've done your income expenditure! I had a horrible habit of going into supermarkets and spending £40 each time. Now I have a strict budget and do a meat shop and a supermarket shop once a month and I am pretty much done with spending on food for the month. If I spend less than Stepchange estimate for my food budget then that is extra money to put away for emergencies or occasional unavoidable overspends.
Be honest with people about your money situation. There is no point pretending to friends you are not skint and signing up to things you can't afford to do.

KEEP POSITIVE - because nothing is ever as bad as you think it is and there is always a positive solution to every problem. Please get the necessary help if you are feeling depressed/anxious because at the end of the day your mental health is 100% more important than your credit rating.

I like these steps. 100% agree with them. Talking to my creditors stopped my debt getting out of hand. But the key to clearing it was separate accounts. It meant I knew what money was there to pay bills including debt and what was mine to spend. I think the point re credit scores is very true- not once on the credit score firms have I seen a recommended savings account.