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  • FIRST POST
    mikon
    Can You Live Without Credit? Please Answer.
    • #1
    • 26th Mar 10, 8:38 PM
    Can You Live Without Credit? Please Answer. 26th Mar 10 at 8:38 PM
    I am embarking on a DMP which means that the first month I do not pay the minimum amount to my creditors I will have a default marker placed on my credit file, even if they agree to a DMP payment. This will remain there for 6 yrs.

    How do I survive without credit cards I know I will have my DMP arranged to ensure I pay my essential bills and have enough to live on and feed my 2 children. My worry is how will I purchase a vehicle when my existing one needs replacing, I will not be able to get finance so therefore will not be able to replace my vehicle. The amount of miles I do means I need a reliable vehicle not just a run around.

    I will not be able to save as any excess income will go to paying off my debts.

    So how do you survive without credit. I know some people say you do not need credit but does the world not exist because of debt.

    Many thanks in anticipation.

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    Last edited by Former MSE Wendy; 06-04-2010 at 8:44 PM.
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  • Aspiring Writer
    • #2
    • 26th Mar 10, 8:49 PM
    • #2
    • 26th Mar 10, 8:49 PM
    You can survive perfectly well without credit. I appreciate your income is pretty much accounted for after the DMP has been paid, but in answer to your query about replacing your car, save up! you can buy a perfectly decent car for 1500 to 2000 . That isn't a huge sum to save really.

    The world may be built on credit these days, but look at the recession we are in now and the causes of it, do you think it would have been as bad - if it happened at all - if we hadn't lived our lives relying on credit?
    "If you are going through Hell, keep going" - Winston Churchill
  • mikon
    • #3
    • 26th Mar 10, 8:56 PM
    • #3
    • 26th Mar 10, 8:56 PM
    The one thing I am looking forward too and it sort of contradicts my original post is that I will not have credit cards and I will have to save its about time. Until now I have seen something in the shop and bought it on credit. My parents always taught me if something is worth having its worth saving up for and I guess they were right.

    It will feel good having to save and living within my means. Cutting my cloth accordingly.
  • Aspiring Writer
    • #4
    • 26th Mar 10, 9:22 PM
    • #4
    • 26th Mar 10, 9:22 PM
    mikon, im sorry my earlier post was a little harsh maybe. But it is do-able, you have taken the right step in doing your DMP, at least you have no further hassle from creditors etc,..that peace of mind alone is well worth it.

    Good Luck !
    "If you are going through Hell, keep going" - Winston Churchill
  • mikon
    • #5
    • 26th Mar 10, 9:27 PM
    • #5
    • 26th Mar 10, 9:27 PM
    Aspiring Writer. You were not harsh you are expressing the reality of the situation. I wish I had taken this step years ago. Although the thought of creditors ringing me at home and a work is worrying me and I hope they do not come knocking at my door as I have children.

    But to secure a better future for my children me and my OH need to take this step now. Next week will see us setting yup separate basic bank accounts and closing our existing accounts. I guess it will good to live within a structured budget once again.
  • nanna58
    • #6
    • 26th Mar 10, 9:27 PM
    • #6
    • 26th Mar 10, 9:27 PM
    Im an oldie with grown up family we lived perfectly well when they were small had to save for what we needed not wanted there is a difference.Once you can get into the paying thing its not so bad
    and yes i am learning again
    good luck
  • v8monkeyboy
    • #7
    • 26th Mar 10, 10:32 PM
    • #7
    • 26th Mar 10, 10:32 PM
    The OH and I manage perfectly well without credit, and have in fact, found it utterly liberating. We now know that everything we buy, we can can afford and are not getting into further debt by doing so.

    We have seperate bank accounts (my credit rating is ruined) and EVERYTHING we buy is paid for in cash. We also had to purchase a car, and believe it or not, managed to get a perfectly well maintained BMW 3 series for 600 on ebay .

    There was a time when we thought that when the proverbial shoelace broke, that would be it, but through utilising the tips on this site and really putting in some hard work, we have managed well and have managed to build up a buffer zone.

    It's hard, but it's worth it, and when you start to see the inroads you're maing into your debt, you will feel much better.

    Chin up - loads of lovely people on here to help and support.

    T xx
    • katsu
    • By katsu 26th Mar 10, 10:37 PM
    • 4,368 Posts
    • 13,707 Thanks
    katsu
    • #8
    • 26th Mar 10, 10:37 PM
    • #8
    • 26th Mar 10, 10:37 PM
    I agree. We paid 500 for a car. We've driven it for probably nearly 3 yrs. It has needed some garage work, but old cars are a bit easier to fix, if you are handy you can get out there with a Haines manual and do some stuff yourself. You go to scrapyards for parts and get mates to help.

    Our last 3 cars have all been paid for in cash. You save up for a long time towards the replacement and get what you can afford - hence the 500 car. You look at them carefully and treat them with respect. I love that little old car. It had low mileage when we got it and we've done probab ly 8-10k miles per year in her. You just need to look carefully for the right old car.
    Debt at highest - 8k Debt Free 31/12/2009 (eight years and counting )
    Original MFD: May 2036 Current MFD: 2021
  • mikon
    • #9
    • 26th Mar 10, 10:48 PM
    • #9
    • 26th Mar 10, 10:48 PM
    This site has been fantastic over the past week. I have been sheltered from our debts whilst my OH she has been worrying herself sick for the past 4 months and is now is ill as a result of the debts. She poured her heart out to me last week and I sought help from this site and National Debtline as well as CCCS.

    The thought of embarking on a DMP is daunting and worrying as we have always had an excellent credit rating and pride ourselves on paying our way in life. That is why the thought of having my credit rating trashed is frightening but the fact the we will not have to worry and not have the stress of scrimping and scraping month in and month out seems worth it. I am also worried about the stress the calls and letters from creditors will have on my wife but I guess their entitled to chase their debt and we want to pay them just the interest element means we will never clear them. So the journey we are about to embark on is daunting but in 6yrs when we are debt free we will be stronger and better people.
  • Poosmate
    I too have bought my last couple of cars for less than 350 each. The first was a dream. I worked out it's cost per month over it's life with me including purchase, mot's, tyres, any other mechanical needs (so excluding petrol, insurance and road tax). It cost me 5 (yes five) pounds per month!!!

    The second was a nightmare but it was partly flukey mot failure (brakes would not pass mot at one station but would at another so after a complete new brake system still fail had to remot at the one it did pass at) and partly my own fault (took it to the most expensive and picky mot station in town! Der!). But "Satan" runs and drives like a dream and has never let me down!

    The beauty of buying such old cars though is that when you'r ready to get another one, you scrap it and put that cash towards your next one. I'm hoping to get 100 for mine when I scrap it. So 3 years excellent reliability for 250 (plus about 600 for the hellish mot's). You live and learn though.

    Poo
    One of Mike's Mob, Street Found Money 1.66, Non Sealed Pot (5p,2p,1p)6.82? (0 banked), Online Opinions 5/50pts, Piggy points 15, Ipsos 3930pts (25+), Valued Opinions 12.85, MutualPoints 1786, Slicethepie 0.12, Toluna 7870pts, DFD Computer says NO!
  • mikon
    The problem is I am driving a 22k vehicle now private plates so to come down to a 500 vehicle will set alarm bells ringing amongst my family and friends. I know this sound stuck up my own ars* but I am one of those individual that has to maintain an image albeit the image I have been protraying over the past year has been beyond my means its difficult to readjust, its easier to go up than it is to come down. I guess my image needs to go out the window and my OH health and well being needs to be my priority.

    Sorry for sounding a stuck up pompus, I'm not if you knew me.
  • Poosmate
    Mikon, you know I've already posted on both of your previous threads so I guess you'll have some idea of what I think. But that's me. It's impossible to give informed opinions on someone's circumstances without knowing the hard facts.

    All I would ask is have you truely and seriously exhausted all other ways of dealing with your debts before resorting to the DMP?

    If you haven't already, please look at some other's SOAs and the advice that's been offered to them. There really are so many ways that you can deal with debt and absolutely nobody needs to be any the wiser about it. You have the added bonus that you have your other half on board so you'd be working as a team. Many people are doing this on their own, some have handicaps where their other half's are not playing the same game because they haven't realised the predicament they're in yet.

    There isn't an easy way out of this and I appreciate you know this but I'm pretty sure once you go on your DMP you can kiss goodbye to the 22k car lifestyle.

    It is going to take some time to readjust, I hope you get on ok with it.

    All the best

    Poo
    One of Mike's Mob, Street Found Money 1.66, Non Sealed Pot (5p,2p,1p)6.82? (0 banked), Online Opinions 5/50pts, Piggy points 15, Ipsos 3930pts (25+), Valued Opinions 12.85, MutualPoints 1786, Slicethepie 0.12, Toluna 7870pts, DFD Computer says NO!
  • mikon
    Poo

    Your replies in all my threads have been useful and helpful and have aided me in coming to the decision I have reached which is DMP. Remortgage is out of the question as is an IVA I will get around to posting my SOA for people to advise me on. I feel better just knowing that their is a possible solution rather than stumbling from month to month and I know we will never be alone as we have this forum for support.

    Thank you once again for all your advice.
  • Poosmate
    Thanks. I have struggled with debt for years so know where you're coming from. This is the first month I have money left at the end of the month since I can ever remember!

    Good luck with your DMP and I hope your OH feels better soon.

    Poo
    One of Mike's Mob, Street Found Money 1.66, Non Sealed Pot (5p,2p,1p)6.82? (0 banked), Online Opinions 5/50pts, Piggy points 15, Ipsos 3930pts (25+), Valued Opinions 12.85, MutualPoints 1786, Slicethepie 0.12, Toluna 7870pts, DFD Computer says NO!
  • jonni3000
    Mikon said:

    I guess my image needs to go out the window and my OH health and well being needs to be my priority.
    I know exactly where you are coming from! I used to have a Range Rover Vogue SE & a Porsche 997 and was very, very image conscious, but I started using MS Money for tracking my spending and came to realise (after logging vehicle spending for a couple of years) that there were other less expensive ways of getting from A to B, or should I say that I'd had enough of fuel, insurance and servicing costs getting higher and higher. I now have an A4 diesel estate - bought cash. Nobody has said anything to me about the change in vehicle, if they do I'll be honest and tell them I'd had enough of increasing running costs. I doubt you'll get any criticism for your honesty or common sense approach, particularly in the current climate. I liked driving the other cars, but I much prefer having the additional money in the bank. It was a sort of LBM, but with vehicle costs

    In answer to your original question, I don't use credit either. Got rid of my credit card in 2004, the OH still has one but it just doesn't get used. If we want something it comes out of savings. My LBM happened about 15 years ago, and the OH's about five years ago.
  • elsie52
    Mikon,

    Can we live without credit........of course we can. You budget, save what you can, and budget some more.!! The feeling when you have cash in your hand to buy something, is one I love. It's paid for, done with, and you don't owe anything for it.! This is the voice of experience. We started our DMP just over 2 years ago, owing 74k.........we now owe 33k. so have paid off 41k in 2 years, and do you know what, we must be doing a pretty good job of keeping up appearances, because not a single family member or friend know a thing about it.! It can be done. The main advice I can give you is to budget, for absolutely everything, spend your housekeeping budget wisely, learn to know the difference between NEED and WANT.! You can do it, take a bit of advice from an another "oldie" and do this whilst you are young enough to recover from it.

    Good luck


    June 2010 - 11/56 lbs Weight to lose before May 2011.

    • bertman
    • By bertman 27th Mar 10, 7:57 AM
    • 275 Posts
    • 698 Thanks
    bertman
    Hi Mikon,

    Just wanted to add my two penneth, we had to live on credit as our business failed, stock, lease payments etc. all came from CC and loans until we managed to get rid of the business. For the last 6 months we have lived by using cash and also using the tips on this website. The people on here are (mostly) really concerned for you which helps, especially in the dark times that we have all had.
    By using cash we have managed to find the value of things, also we can't overspend as when the cash has gone its gone so we budget very well now. We cook all our own meals and really enjoy it - Sundays over the winter have been fun trying new recipes and having a glass or two of wine, these meals have lasted us all week for a vastley reduced sum.
    We also don't care now what people think, we keep our house neat, tidy and clean but don't have all the gadgets everyone else has - playstations etc. We just say we don't have time for them and to be honest we probably don't, we get out more now walking, visiting places etc. with packed lunches and have really found a lot of things in the UK that we didn't relaise existed and all free - again this website is great for cheap days out.
    Sorry if this sounds like rambling on but keep your chin up, you will come out of this and be better for it - and no longer be in the hands of the banks...
    Debts as of June 2012 - 68,986.35
    Now 27,470.20
    57% of debts cleared
    • katsu
    • By katsu 27th Mar 10, 8:57 AM
    • 4,368 Posts
    • 13,707 Thanks
    katsu
    The problem is I am driving a 22k vehicle now private plates so to come down to a 500 vehicle will set alarm bells ringing amongst my family and friends. I know this sound stuck up my own ars* but I am one of those individual that has to maintain an image albeit the image I have been protraying over the past year has been beyond my means its difficult to readjust, its easier to go up than it is to come down. I guess my image needs to go out the window and my OH health and well being needs to be my priority.

    Sorry for sounding a stuck up pompus, I'm not if you knew me.
    Originally posted by mikon
    Hi Mikon,

    Can you look for a quirky car? Say you are experimenting with the fun of a small mini (for example) that rockets around the streets?

    To be honest, I'm wondering why you feel you need to maintain this image - you know if you can't afford the image then the cost (to the OH's health and your life) is too high.

    Surely your family and friends like you, not your car? If your friends are engaged in some "keeping up with the Joneses" type game, then maybe you want to spend more time with friends who aren't?

    I agree that there are certain professional issues and it may raise questions at work if you went for a rusty banger with all doors and panels different colours. If you save judiciously you should not need to come to that. After all, if your car is worth 22k then it should last ages. If nothing else, if you sold that car you could easily have a great 5k car and put some money aside for emergencies/reduce your debt.

    Good luck.
    Debt at highest - 8k Debt Free 31/12/2009 (eight years and counting )
    Original MFD: May 2036 Current MFD: 2021
    • Mags_cat
    • By Mags_cat 27th Mar 10, 9:20 AM
    • 1,392 Posts
    • 8,193 Thanks
    Mags_cat
    Can you live without credit?
    I'm afraid I have to say "Yes, all too easily".

    However, that is entirely down to my mum who worked in a bank and taught me from an extremely early age that if I didn't have the cash in my hand I couldn't afford it.

    I've never had a credit card - although I did once take advantage of a 6 month interest free deal to buy a computer to get some "free" added extras. I paid it off the following month. It actually looked for a while like I wouldn't get the interest free deal because apart from a mortgage and a very old (and extinct) mobile phone contract there is nothing else on my credit record. Who'dathunk it? I'm a bad risk!

    So thanks, mum...without your training I'm sure I'd be in a very different place right now.
  • mikon
    A Big Thank You.

    Life after credit does exist and it seems a healthier and more liberating way of life. So the sun will be setting finally on my lifestyle and will rise to a new dawn of no credit cards but a monthly budget that will allow me and my OH to live a stress and healthy future. So here we go....

    Thank you all for the advice.
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