Credit? Never again!

Kittymumof4

Hi everyone. I wanted to start a diary at the very beginning of our journey. 

We have debts of £70k. We've been trying to keep going, paying them, juggling credit cards, hoping we can increase our income enough to cover it........ but realise we can no longer bury our heads. 

I'm autistic and our family life is quite complex, so I know this isn't going to be an easy ride, but I also recognise how much stress the debts have already caused over the past years and we need to do things differently. 

After seeking advice here I have set up a new basic bank account and am in the process of changing everything over to it. For June, we are cancelling all payments to cc companies. We have completed a SOA and will refine this as we go along. 

I am now getting organised with budgeting, using pots in our account is helping with this but I still need to iron a few things out to make sure we're in control with finances while we wait for cc accounts to default. 

We have some essentials to pay for and I plan to save for these over the next few months while still putting some money away to start building an emergency fund. 

I've joined the June Grocery challenge and will be monitoring how much we spend this month, trying to reduce grocery spending as much as possible. 

I've cancelled quite a few subscriptions that we don't need and this has already saved us around £100 p/m. 

I know that our credit rating will be trashed soon. This fills me with anxiety as we have relied on credit to live for so long. But it also brings relief as I know that we need to change. 

Due to the amount of debt we owe, and only having around £400 p/m to pay it off, this is set to be a long journey, and I'm not sure yet whether a self managed DMP or IVA will be the way to go. But for now we're making a start and will work that out later. Our income could potentially increase over the next few years and we have the possibility of taking money out of a pension in 7 years. So it's not all doom and gloom! 

I know that once we're out of this mess, there's no going back. Even if/when our credit rating improves, I'm determined not to take out credit again, not even an overdraft. It's just too easy to spiral, we've learned that the hard way. 

Sarahwithlove

Well done for taking the first steps. Hopefully as you save up the money you have available towards debts you will be able to make offers on your debts. This will then reduce the amount you owe. 

kimwp

From your posts so far kitty, I'm really confident that this is you on a strong path to financial security. 

Ordinary_Yet_Unique

How are things going? What pension provision have you in place? However, it would be beneficial to reduce debts and live within your budget before accessing pension funds. You want to leave as much as possible to fund your retirement. Best wishes with your plans.