The Next Chapter

March 28th, 2009

Well after a little break I’m back to write the next chapter. As I wrote previously, we stopped our DMP with B&E with a consolidation loan ‘to pay off all our debts’. Well obviously it didn’t! They were just all in one name now and spread out over longer. Also secured on our flat. This was now about to come back and haunt us.

When my son was I think 6 weeks old I got a new job where I could work around hubby, so we were both still working full time. After about 1 year though we realised that we were going to need somewhere bigger to live as our daughter had her own room but we were sharing with the baby. We were running out of storage space aswell! We got the flat valued and it was worth around £110,000 with the huge rises in prices so we put it on the market. We had loads of interest and found buyers after a few weeks. The only problem we had was we could not get a mortgage to buy somewhere bigger! In fact we could not get a mortgage to buy the flat we were selling!! All because we had to pay off the secured loan! Basically we were going to have to rent, but this was going to cost a lot more than the mortgage we had been paying.

Anyway we took the decision to sell the flat and found a lovely house to rent in a much nicer area. We eventually moved in and we had actually got rid of the secured loan and made a few thousand profit after fees etc which we used to furnish the house. It took a while to get used to the idea of renting, but I still find it funny to this day that we couldn’t even afford to buy a flat the flat we were selling!! I will never again secure a loan on any property!!

At this point we decided no more credit cards and loans and we actually manged to stay like this for about the next 2 years!! We only spent what we could afford and actually did quite well. But life has funny ways of testing you doesn’t it?? We were both working and decided we could do with a new tv and sofa and we could actually afford it so why not?? We got them both on credit and they were together only £50 approx per month. But things start small don’t they? Soon we had another credit card each! You’d have thought we would now know how to be sensible, but no, the spending slowly started again! We didn’t see a problem as we were both working full time and earning good money. Then we got the biggest shock I have ever had!

I had been feeling unwell for a few weeks and been trying to lose weight, but I was putting it on, so I went to the doctors. Of course the first thing she asked was could you be pregnant? No way! I was on the pill and I was religious with taking it!! But she still did the pregnancy test along with some others and told me to phone back in a few days. Well, you would’ve thought after 2 babies I would be able to tell if I was pregnant! Well apparently not because I was! The doctor arranged for me to have a scan and off we went to the hospital thinking I could only be a few weeks gone. I went in alone and said I didn’t want to see the scan as I was thinking of terminating the pregnancy. The sonographer put all the details in an envelope for the doctor and off I went home. Of course I couldn’t resist, so I went up into the toilet with the envelope and opened it. Ten minutes later my husband had to come and look for me and found me in tears in the bathroom. I was 24 weeks pregnant! 6 months!! I had no choice but to have this baby – and to be honest I was relieved! Only problem was we had just taken out more credit and now I was going to have to stop work again and go part time. No way could we afford childcare for 3 kids!

Another major problem was I had just got a loan for a bigger car as mine was knackered. Now I wouldn’t be able to afford it! I will admit though we had great fun telling people about me being pregnant – especially the due date! The looks on their faces when they realised it was only 3 months away! People to this day do not believe I didn’t know!

Anyway life carried on and after baby was born I decided to go back to work part-time- again no choice really as we had debts to pay! We struggled on for a year, even gaining 2 more cards for transferring balances, but of course we didn’t cut up the old and soon they were all maxed out, new and old. Hubby had also acquired a loan for us to go on holiday again and then upped it to try and consolidate cards. It was soon out of control as our wages were only paing loan payments,rent, bills. We were having to raise limits on cards just to buy food and it was a vicious circle. Now I’m a little older and wiser I do blame the banks for letting us have more and more credit – surely they could see what was happening?

Anyway, come November 2005 we decided enough was enough and after seeing DFD advertising on TV we gave them a call.

Debt Management

February 13th, 2009

After the shock of finding out my hubby was going to be made redundant just before I was due to have our second child, we needed to find a way to help pay debts while he was looking for a job. I don’t know where my hubby heard of them, probably a TV ad I think, but he called Baines & Ernst and they advised him to set up a DMP. It isn’t until recently we even realised that this is what we had back then! I don’t think anything was really explained to us properly! Hubby was lucky, all of his creditors were quite happy with this and went along with the offered payments, but mine were a different story. I was about to get my first experience of creditor harrasment!

We changed our bank account as advised, as we had loans, overdraft etc with LLoyds TSB.  We stopped all payments to creditors and then sent all the paperwork and initial payment to Baines & Ernst. I don’t think we were ever made aware that some creditors might not be happy to take part in the DMP. I’m sure it was there in the paperwork somewhere, but hubby was stressed with looking for a new job and I was overdue to give birth! We weren’t exactly thinking rationally! It didn’t take too long for Baines & Ernst to sort out the paperwork and soon we were making the reduced monthly payments to them which they then distributed to creditors. They advised us to tell all creditors who phoned that they were dealing with our finances now and not to get into conversations with them. They told us to send on all post regarding debts to them and they would deal with it. This sounded fine and for a few weeks all we got were letters which we forwarded on as told.

I finally gave birth 2 weeks overdue ( to a ten pounder!!) and thought all was fine and going to plan. Then the phone calls started! I had a newborn baby, was stressed and tired, but the one company I owed the least money too decided they wanted it all back NOW! We had bought a computer on credit in my name through PC World who used Beneficial Finance and I think we had already paid for most of it only owing a couple of hundred pounds, but they weren’t happy with only getting a small amount per month. They started to phone at least 5-6 times a day. A different person every time demanding immediate payment. Every time I told them we were with B & E and they would be in contact and we could not make any more payments, but they were having none of it. During one phone call the woman – I won’t call her a lady- on the other end was actually shouting at me! You could hear my son crying in the background quite clearly and I got so upset I started to cry, she was talking to me like S*** basically. My husband had to take the phone off me and tell her in no uncertain terms where to go! After this I decided I was no longer going to answer the phone. We used to have one of those Amstrad phones which told you which numbers were calling, so anything I didn’t recognise or was witheld would not get answered. I think during this time the phone calls actually increased! They would phone and leave messages around 20-30 times a day! No joke! B & E said they were dealing with it and they were receiving thier share of the payments, so I just ignored them.

We did get good news after a month or so, my husband got another job which would start as soon as his previous job ended! This was great and believe me was such a relief! It was then that hubby decided to do something we now regret so much and was the worst thing I think we could’ve done. He decided to consolidate. I can’t remember the name of the company. I know he saw them on the telly and it was the one Carol Vorderman used to advertise. He called them and arranged a secured loan on our flat to pay off all the debts. The payments were lower than the DMP, but were spread over  15 years! We really didn’t think it through to be honest, all we saw were lower payments and no more harrasment! We even got a little extra for us to go on holiday with. All we looked at was the short term. We didn’t think about facing up to our debt problem at all. In fact we just made it worse in the long term. The one thing we did realise is that our debts had been higher than we thought. We had guessed at around £15,000, but in reality it was more like £25,000 and then we added another £5,000 on top! So now we had a £30,000 secured loan! Do you know what though? We did agree at this point not to get any more credit cards!! We just had our overdraft on our new bank account and a store card and our Next account. So we were ok – for now!

Getting Married

February 8th, 2009

I think what really started the main downward spiral of our debts was deciding to get married after having our daughter. We decided to just do it small and quite in the local register office, but my mum was having none of that! She offered to pay for a nicer venue and then my dad offered to pay for the reception, which we could get cheap as we all worked in a hotel. So our small quite wedding started to get a lot bigger from the start. I decided i needed money for a dress and other bits and bobs and the honeymoon, so I applied for a loan for £5,000. Until now I had never had a loan although I knew my other half had one. I got a phone call from the bank saying they wouldn’t give me £5,000, but they would give me £2,500 and another credit card with a £2,500 limit. Well I said fine, but to this day I don’t understand why they did this?? Was it because they knew they would get more back in interest from the card?? At this time we also got a joint bank account with a £500 overdraft. Suddenly we had spent £5,000 in less than a month!! This was added onto the top of what we already owed so things were starting to get tight again. I can still honestly say that we just ignored it and didn’t really admit what we were starting to do! As long as we got we wanted we were happy!

About a year after getting married we decided to move back down south after my hubby applied for and got a job there. We needed to sell our flat to do this, but also needed to move straight away, so moved in with my inlaws until the flat sold and we could put down a deposit on a new house. You would’ve thought that we would be sensible and save money during this time, but no, we were going to have money when the flat sold so it didn’t matter!! We were so stupid! I got a good job so we had money coming in, but it just seemed to disappear straight away. God knows what we spent it all on! Soon we realised that our flat wasn’t going to sell as quickly as we wanted so we decided to put it up for let aswell and see what happened first.By doing this we were also able to apply for a mortgage as they took into account the predicted rental for our flat. We weren’t able to get as much as we could’ve if we’d sold our flat so all we were able to look at was small flats again, but we couldn’t keep living with the inlaws as relations were slightly strained and getting worse. In the end we had to settle for a very small flat in a bad area and this was going to come back to haunt us, believe me!

So now we had about £15,000 in debt and owned two flats one of which was still empty, so we were very short of money! When we got an offer for £5,000 less than the asking price for our flat we had to take it! The annoying thing was it was only a few weeks before we moved into our new flat! If we’d waited a little longer we’d have been able to at least buy something a little bigger and better! But, well that sort of describes our life really!

At least with the old flat sold we now had a little extra money again! Again we started to pay off debts and start to feel a little more confident! I think for about a year we were fine. So much so that we even decided to have another baby as my daughter was now nearly 2. I got pregnant quite easily and we even worked out that we could afford it as maternity pay was a little better. We even saved money!! A first for us! Then the worst possible thing that could happen, happened!! My husband came home from work when I was 38 weeks pregnant and told me he was bieng made redundant!

In the Beginning

February 7th, 2009

I have only recently realised that my debt problem started a lot further back than I thought it did. I could just say it started to be a problem just before I started the IVA, but that would be a lie. It actually stared way back when I was 18 and about to go to Mexico with my fiancee – now my hubby. This was when I got my very first credit card. The card had a £500 limit which was to help with paying for trips etc. I was never going to spend all of that! Well, as we know it was soon spent and the limit raised to £1000. Soon after I gained a store card – House of Fraser. 20% off what you were buying if you opened an account. Obviously what I was buying soon doubled! At this time I had no idea what APR and interest were. I really didn’t care as people were giving me money to spend! We lived in staff accomodation and had no bills etc to pay! Keeping up with the payments was easy!

Soon we decided to move into a flat of our own. This came with the real world. Rent, bills, food shopping. Soon I realised that it was going to get harder to pay for credit. But do you know what? It still didn’t stop me raising the limits on my cards! I also found out around now that hubby had a loan and cards from before we got together. But this was none of my business, it didn’t affect me!

After a year or so hubby was offered a job up north for more money, so off we went. This time though we didn’t rent. We bought our own flat. £37,500. It makes me laugh that we wouldn’t get much for that price now!! We did both get really good well paid jobs though and soon we were actually getting the debts paid off. What could possibly happen next? Only one of the best things we ever did, but certainly not the best timing! I was pregnant! This revealed a whole new world! How much babies cost and how rubbish maternity pay was back then were just two!

By the time baby came we had managed to accquire higher credit limits and had spent quite a lot of them! The debts weren’t that bad compared to what was to come, but if we had been sensible and saved some money instead of spending it on interest, maybe we would have been better off! Hindsight – oh well! We also had a slight case of ‘keeping up with the Joneses’. Even though people like my parents (and others) were considerably better paid than us and had no kids at home we still felt the need to be able to have and do everything they did! If they had it we damn well would too!

Things weren’t exactly desperate, but we were starting to discover that if I didn’t get back to work soon we wouldn’t have any spare cash, so when my daughter was 8 weeks old, back I went to work full time. This is something I regret to this day and which was wholly down to my debts and the need to pay them. If I could go back and spend more time at home with my first baby I would do it and it is only recently I have realised this. I feel I scarificed time I will never get back because of money.

Anyway, soon debts were bieng paid again and things were getting back to normal. You would think we’d learnt our lesson? Oh no!

Hello world!

February 7th, 2009

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