Friday, 17 January 2014

My Journey out of Debt

I got into debt years ago and for many years that followed I ignored it in the hope it would go away.  This is the period of my life when I started using Payday Loan companies, not to pay the debts, but to buy food as my wages were just being eaten up by my overdraft.

After a few years of ignoring letters and dodging debt collectors I changed jobs.  The money wasn't much more than I was earning previously but I was happy, and it did make a difference.  I was no longer wasting money on material things to try and make myself happy, I was already happy.

I made myself sit down and open all the letters and work out how much I owed.  Obviously the original debt and years of interest did not make for good reading, it came to nearly £25k.

I listed the bills that I needed to pay every month - electricity, water, council tax, etc - and gave myself a realistic budget for food and other essential shopping to work out how much money would be left over from my wages.

I contacted all my creditors with a comprehensive list of incomings and outgoings with a suggested monthly repayment.  Some of the companies were really helpful, others not so but eventually we all came to an acceptable repayment plan.  Actually contacting the companies froze the interest at the time of the initial contact.

I was making good progress, but then got made redundant (again).  I contacted all the companies to explain the situation and only one of them was helpful allowing me to reduce my payments until such time as I was employed again, the others demanded that I retain the agreed repayment.

I was using my redundancy payment to cover the repayments and my bills as my weekly job seekers allowance of £64 did not go far, at least I didn't have to worry about paying my Council Tax as this is covered by the local council if you are on benefits.

Eventually the redundancy money ran out and I had not been able to find a job despite applying for hundreds.

I had kept in contact with my creditors all through this time, advising them when my repayments would have to stop but to no avail.

As the payments had stopped, the interest started to accrue again.  And accrue fast.

All the headway I had made was being eaten up again by added interest.

I eventually found another job so once again I made a list of incomings and outgoings and went through the process again.

My debt is now down to just under £13k and apart from one company, who have always been unhelpful and continue to be so, I have found that they are not so scary to deal with.  If I do not increase my repayments I have calculated I will be out of debt in another 5 years.  If I do find myself with more available cash, I will be debt free more quickly.

And I am looking forward to that day.

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