Debt - My Story - There is a way out

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DebtAdvice

Guest
I am hoping this thread will give some advice and help some people that may have found themselves in the same place as me. Drowning in debt and wondering if its possible to ever turn it around, this is my story and I’ll happily answer any questions and advise. As this is a sensitive subject for some I implore those that do not want to open up publically to PM me if they want, anything said to me I will keep in complete confidence!

Firstly let me state that I am a long standing member of this forum, however some people I know in real life frequent these forums and I have asked the admin of the board if I could post this anonymously. Most of my friends and family know my situation but the odd person could be a little vindictive with it so I would prefer them not to know.

So where to start…. I have debt…..a lot of debt, in total in December last year it hit £67,000, all unsecured in various forms and to top it off my wife was completely unaware!! I could go into detail about how I got to this point but I doubt it will help much, if anyone is interested then I will happily go into it but this is more about how to help yourself once you get to that point where its all consuming!

My debt is in a number of different forms, overdrafts, loans, store cards, you name it, if there is a way to get credit I have probably done it. Over the last 4-5 years those debts have increased almost exponentially as I have taken loans to pay off credit cards, maxed out the cards again, taken other loans, always chasing the debt thinking that one day I will start to see it reduce. It never does!!!!

I feared talking to my wife about it, worried about what she would do, I should have trusted her, I should have talked to her sooner. For me its being ten plus years of worry, sleepless nights, trying to work out how to make ends meet each month. My outgoings on debt were so high that I would more often than not get a message from my bank within a week of getting paid telling me I was exceeding my overdraft, I was already out of money and still had 3 weeks until payday.

In December last year it came to a head, I simply could not cope with it anymore, I couldn’t get any more credit, I couldn’t afford to pay for a weekly food shop, I had nothing! I finally spoke to my wife about it, suffice to say she was pretty angry with me, more so for lying to her and keeping it from her, but she was also very understanding that we needed to find a way out.


It was then that I spoke to Stepchange, they are a charity setup to help people who are in debt, I can’t implore people enough, if you are in any kind of debt that you cannot cope with speak to these people, they have been absolutely amazing. They went through the full details of my debts, listing each one and the value. We then went through a detailed budget of our outgoings on what we need to live. Mortgage, bills, childcare etc, everything in fine detail.


At the end of this they make their recommendation, in most cases it will be a Debt Management Plan (DMP)


With a debt management plan, stepchange take full control of your debts, they will calculate a monthly payment which you make to them and they will then pay your creditors. They contact your creditors on your behalf to tell them that you are in a DMP with them and request that they freeze the debt, stop charging interest and accept a flat monthly payment which will eventually clear that debt. I was quite surprised at how each of the creditors very quickly accepted this plan, every single one has frozen the interest and accepted said payment without issue! Of course this does mean in many cases that a default notice is logged to my credit rating but gaining any form of credit is not exactly something I plan to ever do again!


My payment to stepchange is quite high, however it is far less than the sum total of my individual payments to my creditors, by more than half!! It does not stop us from living a normal life and the major bonus of this is that my debt is expected to be cleared in 5 years. That might seem like a long time but when you have been suffering with this for over 10 years its finally a light at the end of the tunnel, I will be debt free, I will be free of this all and the weight that is off my shoulders is incredible.


My wife will now take full control of my finances, she has access to my online banking and my credit file so she can see clearly what is happening. Its incredibly cathartic to know that I don’t need to think about it anymore! I have some work to do to prove to her that I can be trusted again and she has moments when she is reminded of what I have done and I am in the doghouse again. That’s part of my penance, its still early days and very raw for her but we are strong and we will come through this together.


So to anyone out there with debts that they cannot manage, speak to someone! Do not suffer in silence, do not think that it will just solve it self, get help from people that know how to help you. There is a way out of it but only if you take that first step and ask for help!
 

MrFraggle

Distinguished Member
Not a dissimilar story except it was my partner who got into debt and a fair bit more than £67,000 I pretty much found out on the day I was diagnosed with throat cancer, treatment of which given it was stage 4 meant that my input into sorting this out was not going to be great.
Cut a long story short we pretty much lost everything including our home though we never actually moved out as it was bought by a housing association and with a protected trust deed we eventually turned things around.
What she spent the money on remains a mystery and it was not a fun few years but we got there.

On the plus side all the loans, credit cards etc were liable for the PPI pay pack so we ended up with a few quid in our pockets.
 
D

DebtAdvice

Guest
Not a dissimilar story except it was my partner who got into debt and a fair bit more than £67,000 I pretty much found out on the day I was diagnosed with throat cancer, treatment of which given it was stage 4 meant that my input into sorting this out was not going to be great.
Cut a long story short we pretty much lost everything including our home though we never actually moved out as it was bought by a housing association and with a protected trust deed we eventually turned things around.
What she spent the money on remains a mystery and it was not a fun few years but we got there.

On the plus side all the loans, credit cards etc were liable for the PPI pay pack so we ended up with a few quid in our pockets.


Sorry to hear about that, and even more so that your house ended up at risk, thankfully you didn't have to leave your home!

We did look at putting all of the debt on our mortgage, went to a mortgage advisor and discussed it, with my credit rating it would have been a second charge mortgage. Thing is the payment to that would have still be high and would have been for some 30 odd years!

Stepchange ( and there are other charities so I am not affiliated or advertising them) gave us a far better option
 

MrFraggle

Distinguished Member
To be honest I was for the most part out of it for much of the time that Edie got advice and then was referred to a body that organised the Trust Deed which I believe lasts for three years and at the end of that time you are debt free and companies do not have a claim against you.
The one company, a bank I won't name them but their name begins with a B quite simply harassed Edie, she was getting up to a dozen phone calls a day and would not stop even though we both informed them of what was happening.
Eventually we filed a complaint and took it to the Financial ombudsman who sorted them out.
 

The Dreamer

Distinguished Member
I am hoping this thread will give some advice and help some people that may have found themselves in the same place as me. Drowning in debt and wondering if its possible to ever turn it around, this is my story and I’ll happily answer any questions and advise. As this is a sensitive subject for some I implore those that do not want to open up publically to PM me if they want, anything said to me I will keep in complete confidence!

Firstly let me state that I am a long standing member of this forum, however some people I know in real life frequent these forums and I have asked the admin of the board if I could post this anonymously. Most of my friends and family know my situation but the odd person could be a little vindictive with it so I would prefer them not to know.

So where to start…. I have debt…..a lot of debt, in total in December last year it hit £67,000, all unsecured in various forms and to top it off my wife was completely unaware!! I could go into detail about how I got to this point but I doubt it will help much, if anyone is interested then I will happily go into it but this is more about how to help yourself once you get to that point where its all consuming!

My debt is in a number of different forms, overdrafts, loans, store cards, you name it, if there is a way to get credit I have probably done it. Over the last 4-5 years those debts have increased almost exponentially as I have taken loans to pay off credit cards, maxed out the cards again, taken other loans, always chasing the debt thinking that one day I will start to see it reduce. It never does!!!!

I feared talking to my wife about it, worried about what she would do, I should have trusted her, I should have talked to her sooner. For me its being ten plus years of worry, sleepless nights, trying to work out how to make ends meet each month. My outgoings on debt were so high that I would more often than not get a message from my bank within a week of getting paid telling me I was exceeding my overdraft, I was already out of money and still had 3 weeks until payday.

In December last year it came to a head, I simply could not cope with it anymore, I couldn’t get any more credit, I couldn’t afford to pay for a weekly food shop, I had nothing! I finally spoke to my wife about it, suffice to say she was pretty angry with me, more so for lying to her and keeping it from her, but she was also very understanding that we needed to find a way out.


It was then that I spoke to Stepchange, they are a charity setup to help people who are in debt, I can’t implore people enough, if you are in any kind of debt that you cannot cope with speak to these people, they have been absolutely amazing. They went through the full details of my debts, listing each one and the value. We then went through a detailed budget of our outgoings on what we need to live. Mortgage, bills, childcare etc, everything in fine detail.


At the end of this they make their recommendation, in most cases it will be a Debt Management Plan (DMP)


With a debt management plan, stepchange take full control of your debts, they will calculate a monthly payment which you make to them and they will then pay your creditors. They contact your creditors on your behalf to tell them that you are in a DMP with them and request that they freeze the debt, stop charging interest and accept a flat monthly payment which will eventually clear that debt. I was quite surprised at how each of the creditors very quickly accepted this plan, every single one has frozen the interest and accepted said payment without issue! Of course this does mean in many cases that a default notice is logged to my credit rating but gaining any form of credit is not exactly something I plan to ever do again!


My payment to stepchange is quite high, however it is far less than the sum total of my individual payments to my creditors, by more than half!! It does not stop us from living a normal life and the major bonus of this is that my debt is expected to be cleared in 5 years. That might seem like a long time but when you have been suffering with this for over 10 years its finally a light at the end of the tunnel, I will be debt free, I will be free of this all and the weight that is off my shoulders is incredible.


My wife will now take full control of my finances, she has access to my online banking and my credit file so she can see clearly what is happening. Its incredibly cathartic to know that I don’t need to think about it anymore! I have some work to do to prove to her that I can be trusted again and she has moments when she is reminded of what I have done and I am in the doghouse again. That’s part of my penance, its still early days and very raw for her but we are strong and we will come through this together.


So to anyone out there with debts that they cannot manage, speak to someone! Do not suffer in silence, do not think that it will just solve it self, get help from people that know how to help you. There is a way out of it but only if you take that first step and ask for help!

Thank you for posting your story. It's been a long time since I was in serious debt, and even then I had a plan on how I was going to pay it all off - which thankfully worked. But there was a time when my wife to be cried herself to sleep every night, thinking we were going to lose everything. Being unemployed for a few months in the middle of this didn't help!

Still, once in reasonably well paid jobs, it still took me 8 years of careful budgeting to clear my loans - I remember quite well, shopping for 7p tins of baked beans from Netto in Byker, and dried pasta (my wife is still not a fan of the stuff some 30 years later)!

So in many ways my situation is totally unlike yours, and I can only sympathise with having found yourself on this path; I suffered from quite bad eczema from the stress - and yet, as I say, my debt was planned!

But as you have said, the main thing is to get help, and open up to your nearest and dearest; it's very easy to try and keep a lid on things and 'cope' with the issues yourself - there seems to be a stigma to admitting that we (particularly as 'blokes' I think) aren't coping. It does nothing for your mental well-being, and often, sadly, ends badly.

I'm so happy for you that you've sought help, and one day will be able to look back at this dark period without breaking into a cold sweat!
 

rousetafarian

Moderator
Mod comment:
Please do not report this thread as spam as it isn’t.

Thanks
 

SDMDAM

Well-known Member
Thank you for posting your story and good to see that you have started down a path to get this sorted. Its all to easy to get into serious debt but not so easy to get out of it or to speak to loved ones or even sometimes anyone who can help. Good luck with the future.
 

Solomon Grundy

Distinguished Member
Good luck with it all. Having been in crippling debt before I know the feeling of being at the overdraft limit shortly after pay day. Its bloody awful.
 

ashenfie

Well-known Member
I'm not a fan of so called debt management plans as the out come is often a company pockets most of the money and your left with the same debt and creditors.

Unfortunately you need to take control. One good thing is that it's mostly/all unsecured debt. So the route is simply workout what a reasonable monthly budget. Use the remaining money to pay debt by proportioning by how much you owe each creditor. In most cases they will freeze the interest, Hard road but it works.. Any payday loans you can complaining saying you could not afford it and you should get your money back unless the company has gone bust.
 
D

DebtAdvice

Guest
I'm not a fan of so called debt management plans as the out come is often a company pockets most of the money and your left with the same debt and creditors.

Unfortunately you need to take control. One good thing is that it's mostly/all unsecured debt. So the route is simply workout what a reasonable monthly budget. Use the remaining money to pay debt by proportioning by how much you owe each creditor. In most cases they will freeze the interest, Hard road but it works.. Any payday loans you can complaining saying you could not afford it and you should get your money back unless the company has gone bust.

Im not sure who you have spoken to before about a DMP but in my case the full amount offered to the company comes off the balance. most of the funding comes from donations and ties ups with financial business' who are looking to recover money. With a DMP they do ask companies to allow a small percentage of money paid to go back to the charity but the full amount comes off the balance as I mentioned.

Its all well and good saying just take control but its not that simple for everyone
 

jont

Well-known Member
Thanks for the OP and glad you are getting sorted ... I've been hoping that things would turn around for me job-wise but 15 months on since my last redundancy I've run out of savings to even make my minimum payments and JSA isn't going to cover anywhere near ... so I bit the bullet yesterday and made that call - long way to go in complicated circumstances as directorships of other companies involved (no business debts there though) but first step taken ...
 
D

DebtAdvice

Guest
Great to hear you have made that first step @jont

Hopefully its showing some light at the end of the tunnel :)
 

jont

Well-known Member
So update a few weeks on ... been working with the BusinessLine guys at StepChange and seems the company directorships shouldn't be an issue :) ... also run through the I&E sheet with them and they are happy to recommend me back to StepChange for a DMP if that's what I want as oppose to self-negotiating ...

However while sorting things out I also decided to get a first pension calculation from my various pots from companies I've worked for over the years and got a v pleasant surprise with one giving me £70k lump sum and 10K per year if I took it now - which would instantly clear the outstanding debts and mean I might not have to do the DMP at all and stand some chance of saving my credit history ... need to discuss this with StepChange next week ...

Also investigating the Nationwide's lifetime mortgage/equity release as an option as no kids to leave the house to so thinking Mrs.T and I should enjoy the equity for ourselves if we can - and neither of us really want to be around doddery and drooling ...

Sorry if this is good news for me at someone else's despair but am relieved there are some options that weren't immediately obvious and certainly the StepChange folks helped me talk things through in a very considerate and empathetic manner ... so if you are worrying anyone, I implore you to pick up the phone and discuss it with them - they may help you get it straight in your own mind before needing to broach the subject with a partner/spouse ...
 

rousetafarian

Moderator
So update a few weeks on ... been working with the BusinessLine guys at StepChange and seems the company directorships shouldn't be an issue :) ... also run through the I&E sheet with them and they are happy to recommend me back to StepChange for a DMP if that's what I want as oppose to self-negotiating ...

However while sorting things out I also decided to get a first pension calculation from my various pots from companies I've worked for over the years and got a v pleasant surprise with one giving me £70k lump sum and 10K per year if I took it now - which would instantly clear the outstanding debts and mean I might not have to do the DMP at all and stand some chance of saving my credit history ... need to discuss this with StepChange next week ...

Also investigating the Nationwide's lifetime mortgage/equity release as an option as no kids to leave the house to so thinking Mrs.T and I should enjoy the equity for ourselves if we can - and neither of us really want to be around doddery and drooling ...

Sorry if this is good news for me at someone else's despair but am relieved there are some options that weren't immediately obvious and certainly the StepChange folks helped me talk things through in a very considerate and empathetic manner ... so if you are worrying anyone, I implore you to pick up the phone and discuss it with them - they may help you get it straight in your own mind before needing to broach the subject with a partner/spouse ...
No need at all to apologise in the last paragraph, this could seed some inspiration for others.
 

Lee Moles

Active Member
Stepchange were fantastic for me back in 2016 when i got into serious money issues. They helped freeze my non important repayments and manage paying it back better.

I do have a question which hoping people would advise. Part of my money issues was down to a £15K unsecured loan i took out in November 2016.

I defaulted on it in 2016 and it went onto a DMP, Where payments went from £300 a month to £100. I've been paying that since then and it's currently down to £8.8K Outstanding. I want to get rid of it ASAP.

Would you... Continue paying lower amounts over the duration to get it fully paid off or save as much as possible and offer a settlement figure for half £4.5K and get it partially settled?

Stepchange has advised that if i pay in Full, it will drop off my credit file in 2 years (after 6 years total) and i'm all good. If i get a settlement figure agreed, i'll save money but it keeps a mark on my file for ANOTHER 6 years that i couldn't repay in full. That could affect future borrowing but me and my husband did manage to get a new mortgage back last march although with a more niche lender with a higher interest rate.

What would you do?
 

RBZ5416

Distinguished Member
Would you... Continue paying lower amounts over the duration to get it fully paid off or save as much as possible and offer a settlement figure for half £4.5K and get it partially settled?
Without knowing full details, increasing the payments rather than saving should be preferable. Unless you are paying no interest on the balance, it usually makes more sense to reduce the debt, especially given the low rates available on savings.

My take of trying to settle below what you owe is that unless you were screwed by the lender at some point, then you should pay the full amount. But that's a moral viewpoint not a financial one.
 

Lee Moles

Active Member
No interest charges. I didn't want to increase what im paying now directly because then it's committing me again and with the current climate, who knows how long we are in a job for, hence why i thought to saving it aside in case.

Agree it probably is a moral thing but curious to now what others will do?
 

Miss Mandy

Moderator
Personally I'd increase the payments to get it paid off as quickly as possible. Partially settling for a reduced amount will have a more negative effect that will impact your credit file for longer.
 

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