Asset Rich, Cash Poor - Me vs £130k debt mountain

DebtSurfer

Hey hey.
Missed me already? Here comes Surfer!! (making my best crazy Jack Nicholson face).

Project DeM fruition.

I did activate my nuclear plan as intended. DeM -- short for Deus ex Machina -- God from the Machine. To remind what it is, in classic drama, The Machine comes from Heaven, and God steps out of it. He solves all the entanglements of the plot, resolving the impossible to win situations.

On the little hours of my birthday's morning, I requested the amount which would cover all the debts and potential secondary interest tail. Three working days later the indication came that the money is being transferred into my bank account; on day 4 it finally arrived. 
That was not the biggest amount I saw ever -- mortgage was way bigger. Yet nice reassuring princely sum of £49,645.

I charged my phone, took my dog for a long walk, and started going to online banking apps and killing the debts one by one. Whack! Boom! Crack!
It required a day or two for all the payments to come through and all the balances to come down to zero.

I was aware of potential tail charges. Some cards -- like Tesco credit card -- will only charge you no interest when you have paid (a) previous bill on time and in full, and (b) this current bill on time and in full. Other cards are just happy with you paying the bill on time and in full once. As Barclaycard appears to be. Tesco, you should bow your head in shame. Today they dropped the tail interest; I tried even to call them to cancel this nasty £111.33 surprise, but they are just bound by policy and couldn't refund the interest. They have also sent recently an announcement they're jacking up all APR interest rates by +2%. OK --- hopefully, that'll be last interest money you see from me, greedy base-tards. 
I will not forget when you tail-charged me when others didn't -- and Barclaycard customer service actually stopped the interest for month b/c my full payment came a day later after minimum was taken on time -- but this didn't stop them from helping me.

So I planned that I'll just sit a bit in admiration of nice new zero card balances, take a few friends down the pub to celebrate my 55th birthday and the resounding success of DeM project...

--
Black Swan, or New Development

But clearly my debts were now so embedded into the fabric of the world round me, that their sudden elimination has avalanched the whole Earth around me. 

On that very day, my wife became very ill, & had to be taken by ambulance and straight into critical care. It's now day 6 and she's still in almost-comatose state. Brain confusion, lack of response, occasional convulsion, and the rest ... I'll just save her dignity. She is still in intensive care, on life support, with unclear diagnosis and therefore, prognosis.

"Who would've thunk?"
Guess my debts held it all together, and when I removed them, everything has crashed down like a ton of bricks.

The only two people I told were my sister-in-law (her younger sis, who is also a good friend of us both) and her BFF (who she is going strong with for 40 years now, and who is also a good friend for us both).
Yet obviously my son blabbed in school.

My neighbour/friend offered to help taking him to school. Once I allowed that, but later went back to normal routine.
Why?
When you child has a diagnosis, Children's services are never too far from you. They snoop, spy, collect information, relentlessly share it around, looking to catch you unawares and offer their "help" and "interventions". Don't listen to this siren call, it's "a pound to enter and 1,000 to leave". They have people called Home Link Managers in school, who hawk upon you and try to notice everything seemingly untoward. You therefore are advised to keep them at bay, calmly discharging every stupid idea they come up with.

Staying Positive

One problem gone and one could seemingly just celebrate. Well, eat the new problem now. I don't know where it ends with my poor wife. I just have to keep going, try to if not celebrate but quietly enjoy being newly debt-free, make plans. May God help us both and our son.

==

My next plans are:
1) to leave automatic work health insurance scheme (conditions are crap, I am unlikely to ever claim on it) -- done
2) to increase pension contributions at work (we have salary sacrifice scheme which also saves NI payments into pension) so that my after-pension salary will be exactly £50k -- this way full child benefit will arrive without "higher income charge stupid tax".
3) Then between paying off mortgage and jacking up pension further... I believe I'll start a) whacking off mortgage with overpayments, b) saving some to rainy day fund in instant access savings which are 3.75% at moment, and c) paying more to pension to start recovering what's been taken for Project DeM.
4) Some more plans while my credit score is steadily building up towards Christmas. It will require 2-3 months for it to get sorted, and some tail factors may hold it for a while off. That's OK, that's normal, we'll just wait it off.

What I may do: get myself a new, second-hand phone from Facebook Marketplace, as my current one only holds the charge for a few hours nowadays -- that's what happens to you when you are £60k down in debts: stagnation, things around you are deteriorating and you are unable to replace or fix them.

Brrrrrpppp!
Let's not fixate on bad memories.

Summary:
It was so worth it, to pay off all the debts instantly. My payments to cards bore £800-900 on pure interest a month, before it was gone, and £1300-1400 to pay off cards -- with latest BoE rate increases, all cards would go into "persistent debt" mode as suddenly most of the repayments was eaten by relentless interest. All this wasted money will now stay in, each month, every month, with ground shaking consequences to the better.

Just need to never lose job again. Instead, plan my next career moves, so I end up where *i* want, and not the recruiter or Fate.

"James Bond Will Return!"  

vampirotoothus

Well done on executing your plan. You will recover the money you have used in no time, based on the interest rates you would have been paying. I hope your wife's health improves V x

SuzeQStan

Wow Debtsurfer - a rollercoaster ride of an update that one!  No wonder you are reeling from it all!

those balances you have gotten rid of - are you able to close the cards & credit accounts completely so that there is no chance your wife can spend on them again?

Hope for a swift recovery for your missus 

alt80

Pleased for you ridding yourself of the debt in a way you found acceptable for you and your circumstances but I don't know if what you have also written is meant to come across as it does.

Sarahwithlove

I've finally caught up, well done on finding solutions that work for you. Not everyone will agree with the decision but you've done what you think is best. I imagine with everything else going on you will be glad to have one less stress in terms of debt. I would suggest any money left over goes into a savings account at the moment to give yourself a rainy day fund. Ideally 6 months wages. That way you will have time to find a new job should the worst happen. 

I hope your wife recovers and this becomes the wake up call she needs and she gets some help. Sadly whether you like it or not you are going to be on the radar of the school and most likely children's services. I don't know how recent your previous bad experience was but it has come a long way. More is done now to try and put support in place to help the child remain living at home. Having yourself there as well will also work in your favour but going on the defensive with them will only cause you issues. Yes be cautious but any attempts to prevent their input if they decide to get involved won't be looked upon favourably. 

dawnybabes

Hope your ex is ok, presume the hospital know she’s alcohol dependent and treating that as well.

congrats on paying the debt off. 

DebtSurfer

Wow. Didn't know I have faithful readers. Thank you all for your kind words and words of advice and caution. The plan was calculated, not just put into action willy nilly. I had to do quite some reading beforehand. I'm trying to eliminate risks at the moment to ensure that same never happens again.

Just for the sake of precision, she's not my ex yet. The situation had the potential for it. But formally for all the purposes she's my wife. The awful mishap happened at our home, thankfully I quickly noticed and called 999. In 4 minutes the brigade was there. She was taken to the local hospital. Because the other guy didn't plan for this. They reduced the hours she was spending there for now, and she was wandering about at home, ranting at him etc.

Here's a quick update for those faithful readers.

Wife's health

It may be a cliché but I do believe in talking to comatose patients. That's what I have been doing every day, for a few minutes. Told the news and her own development.

If we're thinking about her consciousness level on the scale of 0 to 10, on Day 6 she was deeply sedated and on full life support (level 1), on Day 7 they took off the breathing tube but blood filtering was still on (levels 2-3); Day 8 they took her off the filter too, after all the harmful stuff was removed. This took her to level 5 or 6.
When I visited her today (12/10), she did recognise me and our son, but was heavily paranoid at the moment and I had to convince her she's not in MI-6 secret facility where they are seeking to drink her blood. I did some main explanations trying not to scare her. She became more cooperative with nurses trying to help her (thank God!).
She hasn't yet regained the ability to speak English yet as it's not her native tongue (just like mine) and hasn't yet recovered; so her communication options are for now limited. She did remember a few things like who I am, but her brain works in roundabout ways (e.g. asking her what's 1+1 and she answers "Marriage! Of course marriage!" -- true though!). Conscience is patchy for now, yet still a visible progress.

We will see.next days. Rehabilitation starts.

Finances

Yet another card showed some interest (her Nationwide). I tried to sort it out via Chat but they want a voice call. How stupid. Why put in the Chat if for most real world things you have to still take the old idiotic phone. I'll have to think of something so they are not getting away with that £116 easily. I know I've been losing around £800 each month, but I'm very money conscious these days, unwilling to lose anything at all.

I have not a single regret on the decision to pay off the debt in its entirety at once. The interest rates have become so high and there was no more 0% balance transfers. It was going unstable and my manoeuvre space was shrinking, even for me
In a year's time, most of my cards would also enter the persistent debt -- yet another stupid regulatory adversary to fight off in this uphill battle, with remote possibility of even being forced to go the humble route of DMP which would suck the life from all my remaining active years. No thank you. Enough of the gorram humble pie.

The payoff may reduce my pension pot for now, but the pension investment performance is still nowhere near the credit cards going up and up interest rates, not even mentioning overdrafts. Meaning in plain English, what was being lost through the cards was much more than I'd gain from investing the same money.

Yes, I am aware of tax implications. Well: I haven't taken ¼ of the pot, so MPAA wasn't triggered. I am free to contribute much as I can. But now I will have significant surplus every month which I will decide where to put and in what priority. No more money lost to stinking credit cards, and God help me.

The compact 2011 Volvo is not going anywhere. I kind of grew to adore its Nordic looks, and have nowhere to flash a car at the moment, and it's really good for taking me from A to B. Again, it was a correct decision to sell the Mercedes, because 1) it allowed me to pay off 1/6 debt and 2) brought the remaining amount within that ever important tax-free ¼ where no triggers are made. All of the above has significantly reduced my money wastage and gave me the reassurance everything is going to the plan. 
So tomorrow it's going for A/C diagnostic and an MOT (saving money when done together!) -- doesn't matter how much are its residuals, but I'm going to use it until I'm comfortable with my monetary position, which could be a year, two or even more -- if the Volvo agrees with me and continues its amazing service (204,450 miles and going strong).

My own health

Was a tiring week. I missed breakfasts, prioritising my son's instead. A coupla times even missed the morning shower (took one during lunch break). It felt outrageous to have to move, move, move ahead: wake up, bring son to school, go to work, concentrate, be sure to leave work on time and not sit in, feed son, dog, cat, and try not to forget about myself.
Thankfully it's Friday now. Thursday was a day of hope re-emerging. Hope Friday is, too. I feel better, am able to concentrate better, do some great work and it's time to care about myself now. Tactical plan: * Not forgetting these breakfasts, * sleep -- finally -- * use that weekend to try and wash the ruined bed they took my wife from (not a pretty sight!) -- b/c for now am sleeping downstairs on a sofa. * adjust my daily schedule a bit.
That should take me mostly back on track.
I'll then try to recharge and run the robo-vac to make things cleaner at home.
Maybe take my son to the movies on weekends.
One week left to half-term then.

Proud though I didn't lapse the rubbish collection, dishwashers and our meals. As is said in my native country (re-phrased to sound well) -- "War is war, but dinner's at four".

"Bootstrapping" -- by my hair, raising myself out of the bog.

Chat soon!
Yours, 
"JustSurfer"

DebtSurfer

To SuzeQStan

those balances you have gotten rid of - are you able to close the cards & credit accounts completely so that there is no chance your wife can spend on them again?

If she ever recovers enough to be able to spend (yes, this is that serious...) -- no more credit card for her and no overdrafts on the debit card. Just some money on the debit card. When it's gone, it's gone. Want more? there's that other guy. Doubtful though he'll stick with her after she's been stricken like this...

I will use the credit cards but will pay them off in full, just like I was doing for ages before all this ton of sh%t dropped over me.

Why?

1. spending and paying off keeps pumping your credit rating.
2. spending and paying off prevents the cards from being attacked for inactivity, which could be: reducing limits, or even attempting to close it.
3. as my commander used to say "part with money at the latest opportunity" -- it's additional 26-56 days of dough in your account, earning interest.
4. Nationwide card for general spending (easier to track alongside current account within one app), Tesco card for grocery spending. Kinda shows the running balance, where you are on the budget, easier to see overspend and take measure. Payment by DD, only ever the Full balance.
5. purchases made on credit cards have additional protections.

To alt80

Pleased for you ridding yourself of the debt in a way you found acceptable for you and your circumstances but I don't know if what you have also written is meant to come across as it does.

Thank you for kind words. It means a lot to accept a differing point of view, too. 

I can understand where the whiff of scepticism comes from. Yes, "Man plans and God decides". True, people often can't control their spending and return to square 1, only with less money left overall.

But I didn't get into debt because I was a gambler, or I was living beyond my means, or even because my wife drank & overspent. It was due to a perfect storm of circumstances where I was kept out of work much longer than I could afford to. I'm trying to put protections in place from that side.

I'd think of DMP if I were 25. But I am 55. There's less years left.
7 years I spent sunk at the bottom of the Mariana Trench squeezed under the hated debt, the scary fishes eating me off while I was regrowing my skin. Now I am above the water, looking at the sun's reflections. Time to put that hard ground beneath me so I never, ever is sunk again -- and go from there.
But my pension money is there for me, b/c I kept paying into it and collected it like a bee. The lump sum offer is taken differently by different people. Rather than waste it on a cruise round the world, buying a flashy Merc EQE or becoming a private airplane pilot, I am using it on the best gift I could give to myself -- sweeping the pieces off the Life's chessboard where I was getting check after check, to start the game anew with fresh figure set.

This already has, and will have further, profound positive effect on my mental health too. It will have to be felt and understood in full later. So far, I'm just returning from the numb existence where the only emotions left were burning anger and steely determination growing out of it. I'm trying to grow the normal emotions back again. It will take some time.

DebtSurfer

dawnybabes said:

Hope your ex is ok, presume the hospital know she’s alcohol dependent and treating that as well.

congrats on paying the debt off. 

Technically she's not my ex. That she was seeing the new guy, didn't make it for divorce. Now I'm not sure that guy will still be there for her -- but we'll see. Right now she's got a long way out of the woods ahead of her. And the prognosis ... not good.

The hospital got a full report from me, alongside my investigation results, and this probably had some role that they found what was wrong with her.

Was no need to say she was an alco lover, they rely on precise tests and not your words, but are quite understanding when the patients say otherwise and aren't pushy so that they continue to be engaged.

DebtSurfer

To Sarahwithlove

I've finally caught up, well done on finding solutions that work for you. Not everyone will agree with the decision but you've done what you think is best.

Yes. Some musings on that are in answer above to alt80.

I imagine with everything else going on you will be glad to have one less stress in terms of debt. I would suggest any money left over goes into a savings account at the moment to give yourself a rainy day fund. Ideally 6 months wages. That way you will have time to find a new job should the worst happen. 

There could be three ways for it to go.

1. pension contributions: increase them so I get to recoup my pension pot while avoiding higher charge tax on child benefit, better yet idea -- that my next place of work to have a generous pension scheme where employer contributions are depending on yours (I had one like that).
2. savings account: I've not been using it for 7 years. Looks like meanwhile, it now gives me 3.75% AER -- not bad for starters. Not going to overload it, however, though b/c 
3. mortgage: fixed for 5 years at 3.99% APR. Not stellar, but glad I did it on time, otherwise it would be now 7% or so. Going to overpay it if I can. Currently of £979 monthly payment, £222 (22.6%) goes toward interest. Rage ensues. Reasons to overpay: (a) still better interest than savings, (b) the long effects of paying off save a lot of total interest paid, (c) my mortgage gives me the ability to underpay when I need it, I currently have £17k overpayment reserve which kept me afloat at the darkest days there, in that gloomy "Mariana Trench", squeezed below stifling debt mountain, being eaten alive by credit card and overdraft fishes. It is a savings of sorts, too, with limited access: you can access £979 a month if emergency strikes by underpaying your mortgage, but if you don't need it, it reduces overall interest again and again, (d) the long-time goal -- kill the mortgage before I'm 60, which could leave me with £2k-3k disposable income a month in theory... the sooner I pay it off, the sooner I can start building wealth. 

I hope your wife recovers and this becomes the wake up call she needs and she gets some help.

Can't imagine otherwise. Regretfully it's already not a wake-up call, but a rather critical, deeply crippling hit. She will remain on a very controlled diet even if she fully recovers, plus some meds. It won't be a life full of stars anymore. We'll see where the other guy will come into that equation. Something tells me he'll quietly back off, but I'll be glad to err on the bad side.