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

Dizzeepixie

:xmassmile Well done on your fantastic achievement....and what a lovely little boy. :j He's gorgeous!!

fedupandskint

I read your story for the first time today and it is a situation similar to mine in some aspects, it made me thinks about what I have to do (eg try and get a 2nd job for evening/weekend for a year or so to pay off CCs)

It was good to see you all doing well now and making headway and your son is a beautiful little boy, all the best for your futures

MrsPorridge

Just read through your diary. Thank you so much for updating. It shows it can be done. I especially loved the photo of Isacc - he's gorgeous.

subflow

Hello! Just popping back to say that I'm feeling pretty chuffed today, as my debt is now below the £25k mark. Still a long way to go, but considering I was touching close to £35k 18 months ago, it doesn't feel all-consuming, and you can really start looking forward to being debt free at some realistic point in the future.

misswissy

I've just read your entire thread for the first time and just wanted to say well done! Although things were not good for you in the first few days you posted I could tell that you were a positive person and really wanted to get this sorted. Your positive attitude has won the day and is a real lesson for others who choose the ostrich route. Take the bull by the horns and get it sorted! The only way for your and your family is up. Congratulations and let us know when you hit the below 20k mark.:T

subflow

misswissy wrote: »

Congratulations and let us know when you hit the below 20k mark.:T

misswissy wrote: »

Congratulations and let us know when you hit the below 20k mark.:T

That would be today! Feels like more of a landmark, and a reason to continue feeling positive.

It's an amount that also has a feel of an 'average size debt' as opposed to this huge whacking great debt that way exceeds any debt any persons has ever been in!

Here's my thoughts about what happens to the remaining debt from this point onwards, and I'd be interested to hear what anyone thinks.

The debt itself, as previously implied, doesn't really concern me hugely anymore. Due to the terrific work of the CCCS, it's under control and affordable, whilst still decreasing at a healthy rate (£400 per month).

What's clearly apparent though, is that the big issue lies in damage to the credit rating. To get on the DMP, lenders issued a statutory default on the various accounts. This coupled with the markets reluctance to lend anyone anything, has frustratingly left me in a position unable to get a mortgage.

I have a 2nd little one due 31st August, so the priority this year was moving to a new home, somewhere bigger to acconmodate. Hardly a shock, but were now unable to get a mortgage from anywhere. This is frustrating, as I've never missed a mortgage payment in 5 years, and suddenly I'm a big risk. Even more frustrating, is that I'll need to go from a £600 mortgage to a rental property at appprox £1200. Such a waste of money.

However, I do have £40k worth of equity in my house, so upon being sold, it seems as though the right thing to do is have a barter with my remaining creditors, clear all the debts completely, and then just sit out the time required for the credit files to repair themselves again. It's just really frustrating that I'll end up spending £1200 a month on a rental for AT LEAST a couple of years, totalling a cool £14.4k a year NOT being paid off a mortgage....

Not gonna get too down about it, it's how it is and I have to accept that. Lessons learned, need to move on.

Before I get a whole bunch of people exasperated at me spending £1200 a month renting a house, please remember it's basically the going rate for where we live and work, and I can't control market values!! Anywhere cheaper than that would be a horrid student house or in areas where you yourself wouldn't wish to bring up your children....

On the plus side, no debt, no mortgage....I'm very close to having an completely unfamiliar feeling of being entirely debt free!!

Foundational

Many congrats on the amazing progress you've made. Do you really need a bigger house just yet at such extra cost? Little one no.2 will be in with you for a while and in the early years, is having more space/own rooms the most important thing at the price of renting that you have stated. I'd be really concerned about getting back on the property ladder, and not having the deposit to do so in the years ahead. The satisfaction of paying off the remaining debt would be considerable but the frustation (as you have said) of £1200 going out each moth in rent would temper this and it would be hard to save for a deposit to buy. Plus how secure a tenancy would you have as time went by with a grwoing family? Isn't there a case for playing the long game, continuing as you are to make inroads, and continuing to build equity in your current home to help you trade up in future once the DMP is over and you're deemed to be creditworthy for a new mortgage?

Many congrats on baby due fairly soon!

Ellieseleven

Well Done and what inspiration to see what you have achieved! I am teetering on the edge of approaching the CCCS but am afraid that I will never be able to get another mortgage. We currently live in a 4 bedroom house which we will want to sell in the not too distant future so that we can downsize but at 52 I'm scared that we won't get anywhere else to live.

BTW Your little boy is gorgeous!
Good Luck to you

silver_4444_uk

Hello Subflow,

Firstly well done on your progress to date with paying down your debt. It must have been tough to decrease it so much in such a short term !

I can only speak for myself when I say that if I was in your position, I would stay where I am ( even if you are pushed for space ) for at least a couple of years, keep making the repayments and keep hold of the equity in your property.

I agree with Foundational that it may be better to focus on the long term.

The idea of paying a rent of 1200 pounds ( double what you are paying at present ) and losing the 40k equity would not appeal to me. To save 40k takes some doing in these times !

It really depends on how much of a premium you put on having the extra space.

Rgds.

Silver

bargainbetty

If you've got two little ones under the age of three, then surely they can share a room for a year or two? Perhaps even longer....

As the younger one grows out of things (assuming you aren't planning more babies) you can sell/freecycle things to keep the space clear. Why put yourself through this now, when you can wait a year or two, if not longer. Keep clering your debt, and remember it's not just you, lots of people are getting rejected for mortgages these days.

You have achieved some remarkable changes in your life. DMP's do affect your credit rating - just a fact of life. If you can survive in your current accommodation for a few years, you will be in a better position. Just sit tight, and let the kids share a room for a while.

Good luck x