Digging my head out of the Sand

Hi All,
I'm new to MSE but thought I would share my story (So Far).
My issues started way back in 2001, my father passed away and I took it badly, ended up out of work for a while suffering depression, this resulted in me taking multiple unsecured Loans along with credit cards etc, being out of work I couldn't make the repayments which is resulted in a huge amount of bad debt.
I burried my head in the sand, and stupidly every few years I would have a semi lightbulb moment, come to arrangements with all the old debts, Make a couple of payments on them (resetting the limitation counter), and after a couple of months the agreements would fail, and I would be back to square one.
This same Cycle happened over the past 20 years until January 2020, I had a real lightbulb moment, decided at 36 (37 now) if I want to ever own an house I need to tackle the problem head on, so I checked every credit report to discover all of my debts, it was scary to start with, £23k, I am single so it was something I had to tackle myself.
Unfortunately I had gone through a mini lightbulb moment in 2018 which had again reset all the counters, so nothing was due to fall off due to limitation period, time to tackle it!

I contact all my debts, put payment arrangements in place for as low as possible, as it was all bad debt there is no interest going onto any of the accounts, I had 11 defaults and 4 CCJS, My credit history was diabolical, I couldn't even get a sim only mobile contract.
So with all the payment plans in place, I the started prioritising the ones I could clear first, my income after tax is circa £2200, £600 on rent, I do a lot of miles for work so have to spend around £300 per month on fuel, but the car is a company car so that is the only vehicle expense. I worked out I could pay roughly £900 per month towards debts, plus any bonus I get on a monthly basis can go towards debt, i've used this only a monthly basis to agree F&F settlements.
For the first time in my life I stuck to it, I got the debt down to £7k, then an old loan that has been passed around several DCA's reappeared in January, it has now been passed back to the original creditor (Ideal Finance - Part of think money), long story short I received a letter stating that thinkmoney are closing the Ideal Finance part of the company, as such they will be updating the credit reference Agencies in June to state that it has been partially settled (WIN).

I have cleared everything barring 2 accounts on my credit profile, final payment of one of those in April, and the other will be completed end of June, then I'm debt Free.
My Credit rating is still abysmal, but I have a new credit card (took it out purely to help build good credit history), I'm using it purely for fuel, and paying it off apart from £20 prior to statement going out, my credit rating has started going in the right direction.

If you can take anything from my story, it is that nothing will improve while your head is burried in the sand, It is scary when you first tackle years of bad debt, but it is also an exhilarating feeling watching the accounts change to settled/satisfied every month.
My plan post June is to save £12k before April 2022, hopefully by that point I will be in a position to get a mortgage of some form.

Good Luck to anyone starting this Journey, its definitely worth the hard work.

Adam
new diary august 2021
2021 Overpayment £0/£1,500
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Comments

  • Hi, well done for getting on top of this. Good luck with the rest of your journey and getting the savings in place for a home of your own :)
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
    First Anniversary First Post Name Dropper I've been Money Tipped!
    Well done on sorting this out and good luck with getting the rest of the debt gone and hopefully your house bought. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • adamj1984
    adamj1984 Posts: 57 Forumite
    Name Dropper First Post
    Thanks Guys, Much appreciated :)
    new diary august 2021
    2021 Overpayment £0/£1,500
  • adamj1984
    adamj1984 Posts: 57 Forumite
    Name Dropper First Post
    Hi Guys, 

    Just thought I would post an update, so i got myself debt free, then got offered a new job role I simply couldn't turn down, circa 20k per annum more base salary, plus bonuses, one issue, they don't offer a company car so I needed to buy one, and because I'm using it for business purposes the company policy means cars used must be 4 years old or newer.

    Could my Years of bad credit management stop me getting a new role that would potentially give me a totally different quality of life......

    So I applied for car finance, was fully expecting it to be rejected, came back as accepted IN PRINCIPLE, the reason I underlined that is because I've had accepted in principle previously and its always fallen on the final credit check, they offered me 18k for a new car, only problem, its at 24.9% interest........but needs must, i need a new car for this job, I cannot accept the job until I know I have got a car to use on.

    I'm going to go for it, nothing ventured nothing gained, but I dont want to sign up for 18k at 24.9%, thats ridiculous, and I also dont want it over the 5 years they are offering it at, 25% over 5 years is a ridiculous amount of interest, so I find a 2018 bmw 1 series for 10k, at 10k over 3 years at that interest rate it is £399 per month, about 4k in interest over 3 years, but it means I can earn an extra 60k (pre tax) over the 3 years, I'm going for it, so I put all the paperwork in, and I'm expecting it to get rejected at the final check.

    So I'm sitting watching my phone waiting for the call to tell me that unfortunately on this occasion you have been rejected, and then I see it - finance247 are calling you, so I answered, and to my shock I am told I can go collect my car - Result, something I forgot to mention earlier, I asked when applying for the finance if I could make overpayments to clear it earlier and reduce interest, and I can with no issue.

    On top of that, I have now been approved for a mortgage (albeit it only an 80% mortgage), my credit "score" has dropped significantly when the car finance went back on, but I'm expecting that to continue rising as I continue to make on time payments, the first of the remaining CCJ falls off in January, and although I know the score means nothing, that should hopefully help my credit worthiness.

    The only negative I have to post is that since my first post I have discovered an old tax debt for £2400, so I am paying that at £300 per month, that doesnt report to the agencies though - so as far as buying my house is concerned it will not affect it, I was going to hammer the car finance to save on interest, but thats crazy when I am paying £600 per month in rent, so the new target is to now save Circa £20k for deposit for my first house - according to mortgage calculators once I have good credit, based solely on my income I can get an house for up to £250k, so the plan is save £20k, buy a 70k house, and pump as much off the mortgage as feasible without penalties while my credit improves over the next 4 years, then it will be time to find something I want to live in for the rest of my life.

    Thanks for reading, I know its a bit of a novel, but just wanted to bring everyone up to date.

    Good luck in your own battles :)
    new diary august 2021
    2021 Overpayment £0/£1,500
  • adamj1984
    adamj1984 Posts: 57 Forumite
    Name Dropper First Post
    Following on from advice on another post that I have, I'm going to carry on with my diary.

    Target number - stop smoking.......day one - going full cold turkey
    new diary august 2021
    2021 Overpayment £0/£1,500
  • BellaLasagna2018
    BellaLasagna2018 Posts: 186 Forumite
    First Anniversary First Post Name Dropper Photogenic
    edited 19 August 2021 at 10:26AM
    Congratulations on the job offer and good luck with your house purchase. 

    Have subscribed to your diary and will follow your progress. I got my first -and only - mortgage at 37 and was mortgage free in 17 years. You can do it! :) 
    LBM: August 2006 - £12,568.49 ——  DFD: 12 March 2012
    MFD: 30 March 2019
     »The road to DF is long and bumpy » Greensaints 
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
    First Anniversary First Post Name Dropper I've been Money Tipped!
    Good start to stop smoking.  You can get support from the NHS by way of patches etc.

    Good luck with clearing that car loan and tax debt, improving your credit record and saving a deposit. Getting your head out of the sand while you are still young enough to turn it around was definitely a good call. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Thanks guys, I am going to do a new SOA, and put it up, I really need to stop wasting money, not just on Smoking, but I know I waste a lot of money.........
    new diary august 2021
    2021 Overpayment £0/£1,500
  • Parkyp
    Parkyp Posts: 883 Forumite
    First Anniversary First Post Name Dropper
    Wow what an achievement. Well done 👏👏
    Put what you would have spent on cigs in a separate pot, you’ll be amazed how quickly it mounts up. My friends did that and went on holiday to Vegas with the money. 
  • rigare11a
    rigare11a Posts: 101 Forumite
    Debt-free and Proud! First Anniversary First Post Name Dropper
    Hi Adam, 

    What a great diary thanks for sharing. Its really inspirational and congratulations on your new job and mortgage :) its really nice to see that's its all started to turn around for you from your previous experiences. I had a similar issue to you from borrowing from one lender to pay another and resulted in CCJ etc. All of that has now dropped from my file as was sometime ago but I now have a small debt which I would like to pay off so have started a diary here too. 

    I will follow this to keep up with your story.

    All the best 
    Rigarella
     
    Very (Shopping) £796.16 Paid in FULL as of 17/08/2021
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    Debt added since start of journey £9000 (borrowed from partner for car) 
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    My debt free diary:
    https://forums.moneysavingexpert.com/discussion/6291011/debit-free-diary-starting-august-2021-target-may-2022#latest
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