Today sees my debt story series continue with Debt Daddy. Debt Daddy is new to the blogging scene having just started this year in 2018. He is keen to share his story and to help others to get out of debt.
What Caused The Debt
I was a very sensible 22-year-old who was completely debt free and had a good career on the go. I was a Sales Manager for the now defunct electrical retailer “Comet” and I was earning about 30k per year. This was decent for my age considering I left school at 15 and the average wage in my town was about 16k.
I got a call from somebody close to me asking if I could take a loan out for them, so they could get a car. They had a young family and as their credit was poor a car was going to cost them a lot due to higher APR. I duly obliged and visited my bank. I took a loan of about 5k and transferred it into my friends account. They paid back every penny. From that point on, seeing how easy it was to obtain a large chunk of money I decided moving forward that if I needed something I would take a loan instead of saving for it.
My impressionability coupled with the fact that every time I had my “annual review” with my bank they told me I could borrow up to 15k, I started borrowing more. I took a loan for my next car, for my flat, and I took a credit card that my bank offered. Looking back at it, my bank loved my debt.
One credit card led to another. The draw of interest free balance transfers was too good to turn down. Before I knew it, I had 5 credit cards. I also took finance out for my windows.
In the end I ended up about 28k in debt.
My Crisis Point
My crisis point came through an amalgamation of circumstances. Firstly, I left my job which paid well. This was more than enough to provide for my family and cover my minimum debt repayments (cover, not pay off). In November 2010 we welcomed our second baby into the world. Working in retail I worked late most nights during the week and almost every weekend and I had a 90-minute commute. This lack of time with my family encouraged us to move closer to my work so I could have a bit more time at home and help that wee bit more with the children before we needed couple therapy.
We moved to a farm house 10 minutes from my work. The house was beautiful. 4 bedrooms in the middle of nowhere. It was a bad move though. We left out support network behind. My wife didn’t drive so she was left on her own with no adult conversation and a toddler and a baby. My wife started to suffer with baby blues, so we tried to think how we could make things easier for all of us.
I decided a career change would be for the best and quit my job to take on a self-employed advertising sales job. The on-target earnings were attractive, and I didn’t have to work weekends. I went from earning 32K to 16K. On top of this we decided to move back home but I had no money for a deposit. My next move was the straw that broke the camel’s back. I called one of my credit card companies and requested £2,500 be transferred into my bank account. They duly obliged and I had my deposit and 6 months’ rent sorted for our next place. I knew in the back of my mind that once we had moved I would be seeking debt advice.
My Plan of Action
One day when I was out trying to sell advertising I had some spare time as an appointment hadn’t turned up. I googled “help with debt in Scotland”. A charity called CCCS seemed to offer a good service. I contacted them, and they helped me to contact my creditors and offer token payments of £1 whist I was working on a debt management plan. Every single creditor was great apart from Hitachi Capital. They were the only company who were going to force court action. Luckily, I had just received £2K from my bank due to PPI. I used this money to pay off Hitachi and continued with my debt management plan.
As I owned a property my plan was to go into a Trust Deed, but I was reluctant to involve my property if I didn’t need to. In the end the thought of being protected by my creditors, all interest guaranteed to be frozen and a quicker timescale to be debt free made much more sense.
I ended up using PayPlan Scotland ever since who have been great. The Trust Deed will be completed the middle of next year. You read about how trust deeds may affect your assets here.
My Tips on #howtogetoutofdebt
My experience with debt has been a massive learning curve. These would be my best tips for clearing debt.
If you get to a stage where you start to struggle, then don’t go through it alone. There are a host of companies and charities out there to help. Honestly, a huge weight was lifted off my shoulders when I sought help.
Research Debt Advice Charities
The advice I received from one company led to a CCJ which is annoying. Research companies on google. Trust pilot is also a good way to get reviews. Or simply call the company and have a chat. CAP and Step Change are both brilliant charities that will help you. Another fab resource is the website Debt Camel who has so much content on all types of debt issues and advice.
I honestly didn’t think I had PPI but when I was going through my loan paperwork one day, low and behold, there were payments to PPI on my loan which I didn’t agree to. I sent a standard template letter using this service from money saving expert and was sent in the region of 2K. It really is worth looking into.
I hope this inspires anyone in debt to seek help.