£32000 in debt and rising. My story of woe....

dfitps

Re baby-related expenses: get the best breastfeeding advice you can right from the start, i.e. qualified breastfeeding counsellor on phone or in hospital clinic - not just nearest midwife or GP or whatever! Can make all the difference and in your case also save vital cash as well as stress and pain in avoiding problems! (That means you too not just your wife, make it something you've researched yourself as well - your support is vital in early weeks!)

Cloth nappies are another money-saver for many people, although watch out because for others they're an 'impulse shopping' trap (lots of cute ones out there!).

Best of luck to you with all of it .

jinkssick

Well done first of all, I know it must be hard to declare that your in trouble, but your already see the light at the end of the tunnel.

-Call up your CC companies to see if theyll reduce your APR, this does work.

-Like always stated pay off the highest APR% WETHER its loan or CC. Overpayments help wether its by £5 or £9 pounds a mth.

-I really wished youd have heard of the nationwide CC or debit card when you went abroad for that long. You must have paid your CC hundreds in withdrawals alone. Anyway water under the bridge.

-Reduce those phone packages, I dont like to hear people say that they get a higher bill when theyve reduced their package!!! You reduce and you dont make calls. Its as simple as that. Family or friends need to call You if they want contact. Your not exactly in a lar-di-dar situation.

-Sell stuff on ebay, anything, get the £ and pay this money straight to one of your loans or CC.

-New baby, go 2nd hand store and wash the clothes bought. Non-disposable nappies will save you a fortune.

Your first actions of going on holiday and thinking, hell we will sort it when we get back is not the right thinking so now you gotta buckle up that I know you will be fine.



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subflow

Hello everyone. Almost a year later, I thought the very least I could do for all you good people who took the time and effort to offer such kind words and advice, was update you on my current situation.

First and most importantly, 3 weeks late, my little boy Isaac was finally born on the 10th of March. A tricky birth, but is a very happy and healthy little fella. No matter how much debt you're affected by, this really pales it into insignificance. And here he is:




Back to the finances.

As you can see from the SOA I posted up initially, my debt was close to £40,000 and it was all pretty grim. I'm pleased to say that it now stands at £28,000 and going down nicely.

CCCS were great to be honest. They put together a sensible plan, and did all they could to get my creditors onboard. As was discussed earlier in the thread, as expected, HSBC were the main problem, and still are to a point.

Their plan to help me out of debt was to offer a management loan. This genius plan would have put me a further £15,500 in debt (on an amount of £17,000 owed, making the total payable to them £32,500). Not only that, but the proposed CCCS plan would have seen me debt free in 7 years. With the management loan, it would have taken 12. I honestly thought they'd made some mistake.

Upon telling them what they could do with their management loan, they basically continued to be demanding. Fortunately for me, their credit card team (to whom the large majority of the debt with HSBC was with) saw sense and accepted the DMP. This then just left me with:

HSBC Overdraft - £1500
HSBC Loan - £1728 (12 x £144 payments remaining)
Out of that whopping amount I owed, the poxy £1728 HSBC loan was the only thing post-DMP that continued to harass and hassle me. I'd still get HSBC's Indian call centre on the phone most days threatening me. The amusing part about all of this was, they'd send me letters saying that if I was having financial difficulties, then I should contact an organisation such as the CCCS! They even began asking me how much equity I had in my house. For the sake of £1782 owed. I told him it was none of his f%&king business.

They pretty much took the attitude that, because they had offered me the management loan, they had done everything they possibly could to help me out, and therefore because I had rejected this, I had to pay up. There's only so many times you can explain to an Indian call centre that you're on a DMP. To be perfectly honest, I just got sick of this, and realised the only way to stop this was just to pay the damn thing off. I worked a lot of overtime this year, as of today, the balance is £200, which will be paid in a fortnight. I'm very excited that very soon, I will have one less debt. I know in the grand scheme of things, it's not that big of a deal, but I think to anyone who has been in this situation, owing 6 people instead of 7, and one debt gone forever, is a real sense of achievement and tangible evidence that progress is being made. Moreover, the debt that's been paid is the only one that was hassling me, so I can relax a little easier now.

It’s also worth mentioning the attitude of the other companies during the transition.

As I mentioned previously, AA Loans were quite hostile and did imply they weren't going to accept the DMP, and dig their heels in. They gave me a bit of grief; however they eventually passed the debt over to Blair, Oliver and Scott. To their credit, they were polite and professional, and informed me they were happy to accept the DMP. In fact, they even said that should I come into some money, call them and they would offer me a big reduction in the debt for a settlement payment.

Northern Rock again, were quite hostile at first, but not for long, and seemed to accept the DMP at first time of asking. They remain courteous today.

Metropolitan Collection Services, who are the people managing the HSBC credit card debt are a bit militant, but as long as they don't hassle me and keep accepting the DMP payments, then fine. They got right on my case when their payment was slightly under one month, so that's best avoided.


I'd like to share how my outgoings have changed from then to now. Then in black, now in red:

The debt:

HSBC Cred Card (me) - £6300 today = £5383.20
HSBC Cred Card (wife) - £7000 today = £6565.45
HSBC Overdraft - £1500 today = £1000
HSBC Loan - £1728 (12 x £144 payments remaining) today = £200
AA Loan - £7308 (36 x £203 payments remaining) today = £6776.74
Northern Rock Loan - £9009 (91 x £91 payments remaining) today = £8676.94
Parents - £5500 (borrowed for legal fees and stamp to buy new house, moved 1 month ago) today = £0. My parents waived this to help out, although I have vowed I will pay them back one day...

=£40000 today = £28600


Income = £2000 (my take-home pay) today = £2250

Tax credits / CHB = £150 p/m

Monthly Outgoings:

Mortgage = £1100 today = £792, interest only

BT = £30 (internet connection/phone - needed for work) (today = £30, stuck on a contract

Mobile Phones = £80 (I know this is high, but unfortunately 7 months into an 18 month contract) today = £40. 18 month contract expired, negotiated twice as good tariff for half the price. Bear in mind this is the combined price for me AND my wife

Gas & Electric = £45 approx today = £75. Out of my control this one...

Council Tax = £100 (seems right, have checked banding section here) today = £same

Water = £45 today = £26. Bill adjusted.

Life Cover = £61 today = £same

CCCS = £355

Other:

£600 per annum - property maintenance today = £unchanged

£140 TV License today = £unchanged

We STILL don't smoke, and STILL don't have a car, although it would be nice!

So the reality is, there's still a long way to go, however the fundamental differences are:

The amount NEVER goes up. As interest on the accounts was frozen thanks to CCCS, the amount I pay each month is the amount the debt goes down by. Seeing that number going down spurs me on, and I do overtime to bring it down further whenever I can.
We have disposable again! We are not suffocated by the debt and have our life back. Just a more frugal and cautious one.
I don't lie awake at night worrying anymore.

I'd like other people to realise that things can get better. Be sensible, remain as calm as you can under pressure, and don't be too proud to get help.

Hopefully I can return to this thread another year down the line with further encouraging news.

mummum2

Truly fantastic achievement in one year! Well done to you and please keep us updated on further developments. Great to hear all is going well. :T :T :j

piglet39

:T :T :T :T :T :T :T :T :T :T :T :T :T

Your little boy is Gorgeous!

Your story - inspirational.

It is so good to hear back from people who have posted on the boards previously when they have been in dire straits and very very very important for newbies who are feeling frightened/desperate etc to see that there is light at the end of the tunnel.

Thank you

Piglet

Caroline73_2

Thats fantastic! What a cutie too! You should be really proud of yourselves.

jackie_w

Hello There,

what a gorgeous little boy you have.

Im so glas that you got everything sorted with the CCCS, and went on a plan with them. Just reading your post now, you can instantly feel the relief from you.

Jackie xx

Gemmzie

I do enjoy hearing updates from posters who post and then disappear. Glad to hear everything is going well and you're little one is so cute!
Good luck for 2009

[Deleted User]

Thank you so much for reporting back in. I think it is so important that people share their experiences so that new people to the site can gain hope. Your story is wonderful and well told. Your child is a beauty. I wish you the very best for the future - enjoy your new family, it doesn't have to cost money.

Hiphouse

Verbatim

Congratulations on your achievement over the year. Thanks for letting us know too, it's always good to hear success stories.