Debbie's Debt Free Diary

DebbyInDebt

I am 30 years old, over the years I have racked up a lot of debt - just through being careless and I am entirely to blame - but it started out small just overdrafts and I kept getting offered more and more credit and it just snowballed really. Mainly shopping, going out - really stupid material things. As it racked up and the minimum payments got bigger I began missing payments and accounts started to go into default. I ended up burying my head in the sand and ignoring it for about 3 years, which again is a really stupid thing to do and I feel angry at myself but I just felt like I couldn't cope of the face the mountain of debt I had accrued.
So it's about three years on, I am turning 30. I just moved home with parents after a horrible break-up - (they don't know about my situation) - and I have finally decided that now I really can't avoid this any longer. So my situation is I have 16K in debt- including 1 CCJ. My credit score is completely F***** and now I find my options for future in terms of renting, let alone buying somewhere are very limited. I am on a good salary - £38K Annually which gives me about £2008 every 4 weeks - so the positive thing at the moment is I have a lot of spare cash - BUT i really want to have moved out by the end of the year.
So here is a breakdown of my debts:
PRA Group(MBNA Credit card) - £2,804
Link Financial (New Day Store Card) - £333.07
Hoist Finance (BarclayCard) -  £5164.27
Halifax Credit Card - £3,320
Lowell (Mobile) - £559
Lowell (Shop Direct) - £2,563.31 **CCJ
Halifax Overdraft - £514.85
Debt Managers - £380
Natwest Overdraft - £451.35


I currenlty have £4K in the bank which I have saved over the past few months, and I can currently have 1K a month to save and put towards debts. My plan is to immediately pay off the Lowell account which has a CCJ. 
Then, and this bit scares me the most is contacting all the over creditors to setup a payment plan. Is it worth making settlement offers to some of these? It's really important for me to improve my credit score and I know that having a partially settled account will show on my report. Or should I just setup payment plans for each and begin to pay these off? I was thinking of paying the smaller accounts - less than £500 outright and then setting up longer term payment plans for the larger amounts - and pay off as much I can while still trying to save to move out and rent a property.
I'm also really concerned about being able to rent somewhere with a CCJ - and I'm terrified to tell my parents who would act as a guarantor but I just feel too ashamed to have to explain to them my situation and why I need one.

Thanks for whoever read this and for any advice and support - this really is the first time I'm properly acknowledging this and listing out all my debts like that is the scariest thing to overcome.

DebbyInDebt

So my first step was to pay off the 2.6K CCJ as  priority. I contacted Lowell who have told me that there is no CCJ for this account. I assumed the CCJ on my credit file was for the Lowell account because the amounts are the same. LOWELL told me it went to the courts but then got sent back to them and never actually ended up in a claim. Because I ignored all the letters and mail I dont have any paperwork, so next step is to call up Northampton Court tomorrow to check who the claimant is.

DebbyInDebt

Major Milestone!!
The CCJ it turns out was for the Lowell Account. Just got off the phone with them and paid that off in full - and they've contacted the agency who will mark it as satisfied urgently on my file. I'll only have 3 years for this to disappear from my file. Oh my god what a scary feeling paying it off and that huge sum leaving my account, but what a relief I feel like crying.

The lady on the phone at Lowell was so lovely as well, and all these years I've though of debt agencies as scary threatening people demanding money - or telling you off and being judgmental. She even asked me at one point if I'm planning to buy a property one day and this is the first time in my life where I thought - you know what I think I could one day.

So my Debt has gone from £16,088 to £13,525. My bank account feels like I've gone back to square one again after saving up those few thousand pounds but I know I can build it up again quickly and this has given me momentum.

To top that off I achieved a 4.5K run this morning - my longest distance so far the C25K program at Week 8 - running for 28 minutes. The last couple of weeks I've really struggled because of the heat and felt like I was going backwards and then today I smashed it!!!

So tonight I'm making a lovely curry (homemade not takeaway) and I've got a bottle of prosecco in the fridge. Then tomorrow I will move on to the next battle - my plans are:
- Tackle the overdraft accounts for Halifax and Natwest - I'm pretty sure these have been sold on but I need to find out to who. and then see if I can make F&F settlement offers or just get them paid off.
-Also through reading these forums I've found out about doing CCA requests - so I''m going to send those to all the relevant accounts - more to avoid any further court action as I don't want another 6 years of a CCJ on the clock.
- Then the CCA requests will give me some breathing space to rack up a few more thousand to then be able to make F&F offers and/or payment plans to my creditors.

One of the most horrible things about my debt journey so far has been the loneliness and bottling it up - I haven't told a soul about my debt because of how ashamed and embarrassed I am. Being able to share on these forums and read that others are going through your own journeys has really made this mentally lighter for me and not bottling it all up.

DancingInTheRain

Well done on making such a positive start to your Debt Free journey.
Wishing you every success in achieving your goals x

FOMO_overspender

You've got this! You're off to an amazing start and the fact you had £4k in savings is so positive as shows you can do it and keep it saved. Personally, I think is one of the hardest habits to crack (I am forever saving up and then going in to it and then I have 0 savings). 

Sorry if you have already done or been given this advice, but I found doing a SOA really helpful for being super critical of my spending and, of course, a spending diary. I also, personally, am a bit obsessed with YNAB (You Need A Budget) as a budgeting tool - you can get a free 34 day trial. 

Cheering you on from the sidelines! 

FOMO x

DebbyInDebt

FOMO_overspender said:

You've got this! You're off to an amazing start and the fact you had £4k in savings is so positive as shows you can do it and keep it saved. Personally, I think is one of the hardest habits to crack (I am forever saving up and then going in to it and then I have 0 savings). 

Sorry if you have already done or been given this advice, but I found doing a SOA really helpful for being super critical of my spending and, of course, a spending diary. I also, personally, am a bit obsessed with YNAB (You Need A Budget) as a budgeting tool - you can get a free 34 day trial. 

Cheering you on from the sidelines! 

FOMO x

Oh thank you so much for reading and for the support
Yes, that;s such a good idea doing an SOA -  I have done my own DIY budget spreadsheet - at the moment I'm living at home with my parents so my outgoings are really straightforward. Just £250 rent, Food Shopping, Phone Bill and a couple of subscriptions like Netflix/Amazon etc. 
I do still need set a budget for things like leisure, meals out, drinks with friends as this is is my major downfall. I'm using the Monzo app to create 'Pots' for allowances for leisure activities and including takeaways and treats in that. At the moment this is super easy because I can't go anywhere but I need to be serious about it in future to keep this going. I will check out the YNAB tool thanks so much for suggesting it

Doris17

Well done on clearing the CCJ. Good luck on your journey.

DebbyInDebt

Today I did my budget on the YNAB app - thank you for the recommendation I am very impressed with it. Some great advice as well on the website which I have been reading through - particularly around true expenses. I've setup my budget to get me started below. I know I could do a full SOA but as I'm at home i'm lucky I don't have a really complex budget with council tax, utlities, home insurance etc.
Rent: £250
Phone Bill: £50
Groceries £200
Opticians / New Glasses: £15
Haircut: £30
Gifts: £20
Holiday: £150
Fitness: £14.99
Spotify: £9.99
Amazon Prime: £7.99
Fun: £200
Total: £987
Leftover: £1,021

I know I could probably cut down a bit on the fun budget and haircut - but I want to be realistic and give myself the budget but then be conscious and try to come under budget for those things. In fun I'm including anything 'treat' like takeaways, new clothes, a new book, magazines - and going out for drinks/meals when that time comes.

I did my weekly grocery shop today - and I decided to buy as little as possible by checking everything I could use up that I've got in the freezer / cupboards. I've got loads of meat and veg in there that I end up forgetting about. So I spent just £30 on my weekly groceries - including a bottle of wine as a treat for the weekend.

Tomorrow I have a socially distant BBQ as well - and I bought a couple of bits for that - just burgers/buns some crisps/dips and some drink to bring - but I budgeted this under the "fun" section.

I've also gone through my wardrobe today and got rid of a load of stuff - they're currently in bin bags but I plan to put them on Depop and see if I can get anything for them.

My £14.99 Fitness spend is a subscription for the Kayla Sweat App - so I did a home workout today from the app which I've been doing throughout lockdown. I used to pay a gym membership but I think I will carry on using the app at home to save money. Doing the workouts keep me feeling mentally positive so I can cope with the debt stuff and being cooped up at the moment.

And for my debts, made some small progress:
I get most nervous about calling up creditors so I looked at the ones which have online services that you can set things up without contacting anyone.

Link Financial (New Day Store Card) - £333.07 - I contacted them to offer F&F of £100, they got back to me today and said they'd accept £233. I went back to them with an offer of £150 to see if I could squeeze it any lower. I've not much experience doing this but I'm going to try to be persistent and will see what they say - but £100 saving is not bad.
Hoist Finance (BarclayCard) -  £5164.27  - used the online self-service to setup a monthly payment. Just for £18 a month at the moment as it's my biggest account - I'll make small payments on this to avoid court action before I come to tackle it fully
Lowell (Mobile) - setup and online payment for £10 a month for now.

Hoping to cross off the Link Financial one and just pay that when they get back to me.
Then I'm just reading doing some research on whether to pay off the smaller or larger accounts first. If I make settlement offers for the larger accounts - there's much bigger savings to be had. For example the Barclaycard account they online service says they'd accept a settlement of 3.6K which would save me about 1.5K which is massive.

Lots to think about, but another positive day. Tomorrow's Saturday I'll probably take a little break from thinking about all this to enjoy a day with my friends.

FOMO_overspender

Glad you like YNAB - it's so far been a total blessing for me in terms of being realistic on what I know I can't cut out completely and also allocating money to 'pots' for birthday, Xmas etc so that hopefully I prevent any future debt.

Also don't worry about feeling like your fun budget etc is high - it's whatever you think is right for you! I don't have an eating out budget at the moment, but I know that when this is all over it's something I will budget for and I enjoy so I'll probably put in more than others might think to on here. It's all about knowing yourself. I am keen to pay off my debt but I also want to be realistic... if I put a small amount in for something like that, I know I will just borrow from other categories anyway!

Sounds like you had a super productive Friday. Hope you had a nice weekend and managed to have sun for the social distance BBQ!
 

DebbyInDebt

So I'm working on the Link Financial and Debt Managers accounts at the moment, I've contacted both - but I feel like it's just taking forever! It seems really difficult to get through to anyone on the phone which is understandable so I'm trying to be patient.
Link Financial (£333)
I've offered them £100 to settle the account, they counter-offered with £233. I then haggled and offers £150, they said they could only settle for £233. I had one more attempt at trying to get it down to £150 and I'm waiting to hear what they say.
Debt Managers (£380)
I've offered these a settlement of £150 and still waiting to hear back.
I found a hidden debt.
I've got a file filled with unopened mail - when going through my denial stage I'd just file the mail away and be way too scared to open anything. Well I opened them all and went through them all and organised them and also discovered a HMRC debt which was now with a Debt collector, but wasn't on my credit file. I had a bit of a panic with that, but it was only for £219 and i went online and immediately paid it off.
Then I made a spreadsheet
Going through all the mail I had unopened was really useful, I created a spreadsheet of each debt account - noting the different reference numbers, agencies, creditors, contact numbers and amounts so i have all the information to deal with each debt. I've listed them all out with the original amount, amount owed and amount left to be paid so I can keep track. I've made a list of things to do for each debt - such as making settlement offers or setting up payment plans etc.

I've enjoyed budgeting for the first time in my life
I've been doing well with the YNAB app - and I have also become a bit obsessed with it myself! I'm so conscious of every pound I spend now, and been reading their emails and advice to change my mindset on budgeting. I'm coming under budget on my food shop and my fun budget- plus started pots for those annual spends such as opticians, dentist, haircut as well as a holiday! Usually i'd spend at least a couple hundred pounds a month on new clothes all I've bought myself  this month is one £8 jumpsuit second hand from Depop, which is gorgeous - and I think I love it more than any of the other things I've wasted money on. I'm going to wear it for my Sister's wedding, which I was meant to be bridesmaid for but is now going to just be a small legal ceremony just with immediate family.
My CCJ got updated as Satisfied! On my credit report - which felt really good I'm still waiting for the account itself to be satisfied and closed, but that's not updated yet. i used to avoid my credit report like the plague but i've become obsessed with checking it every day.
Thinking about the future
Until recently, i just honestly didn't think buying a property was on the cards for me ever. And i thought I'm way too old now, at 30 in all this debt I'll never get out of let alone begin saving. But I've opened a lifetime ISA and budgeted for and created a 5 year plan to save £30,000 for a house deposit in 5 years, so I could buy a house by the time i'm 35. By then my defaults and CCJ should have all disappeared. It will be really hard as I'm not naturally very good at saving, but i believe i can do it!

2022ismyyear

Loving the diary! Keep at it you are making great progress! I think sometimes it’s not just about getting that “number” down it’s also changing your mindset and attitude towards money which has helped me massively.

I am in a similar situation to you 30, recently moved back home, managing to save well during lockdown/attack my debt and also hoping to buy a house one day! At first it all seemed too much and I was never going to be able to do this but now I’ve started I can really feel myself reaching my end goal!

Good luck on your journey!!