It’s day one of the Yakezie challenge. I’ll be writing about my experiences of personal finance and debt through my own eyes.
There are plenty reasons to write this blog but this idea has been done before, so why bother? Sometimes, in life, powers are out with your control and all that is left is your word. I promised that should I resolve my financial problem I would indeed share my experience and knowledge with other people.
I had great support during some difficult periods. Others are not as lucky. I hope this can be a resource and support for other people through their own hard debt times.
Debt: When It All Began
As a sprightly young teenager I couldn’t wait for the days when I could call myself an adult. I loved the thought of setting my own rules, living my life as I pleased and following my dream. On leaving high school at 17 I joined college to continue my studies.
In doing so I visited my local bank to enquire about something my friends were bragging about, a “student overdraft”. WOW, free money! How could I say no?
Far from a stupid man, well I would say that, I read between the lines that I would receive £1,000 in an overdraft but that I would have to repay it once I was no longer a student. At 0% interest I was happy with this arrangement. I was also offered my first credit card with an excessive APR of 24% when I took out my overdraft. Sure I thought. After a 45 minute meeting I was £4,000 ‘richer’. A great day’s work.
What I didn’t know was that my first foray into acquiring credit was one I should have been far more cautious about. The overdraft was gobbled on beer, parties and the occasional book for my studies. The credit card was primarily used to party away my youth with friends on a holiday in Tenerife. This, coupled with my Student Loan from the Government, meant in one year I had acquired, and spent, £8,000!
Learning about Debt the Hard Way
Shortly after realising the error of my ways I increased my weekend shifts to weekend and nights. I regained control of my overdraft and credit card with hard graft and working as many shifts as I could.
In years to come I would borrow and pay back the money in a yo-yo motion, switching credit cards, balance transferring and consolidating debt to get the best deals. When you manage to financially claw yourself back once, it starts to become second nature that you will be able to always manage to repay your debt, no matter how severe it becomes.
As weddings, family and children came along the credit cards became a source of comfort, just knowing they were there for emergencies, or for life’s little luxuries eased my mind. I had a good job which paid well, so I couldn’t fathom how things could go wrong.
“Eye of the Storm”
For many months I would wake up in the middle of the night, if I could get to sleep at all, worrying about debt, questioning how would I afford the electricity bill? Where would I find the money for my credit card which is due for payment next week? Should I take out more debt to make it all stack up?
I started out in control, hands firmly on the reigns and with unsecured debt which was manageable. I admit it, I questioned how these foolish, irresponsible and reckless people could get into exuberant amounts of debt and sneered at their stupidity.
What I didn’t realise was that it’s all relative. £600 in contractual monthly payments is manageable when you are in employment and have a healthy monthly salary. But when the “wheels came off” I was paralysed by the financial problem I had solely created. These ignorant financial people didn’t seem so stupid now.
Where Did it Go Wrong?
I, like many people, thought “It’ll never happen to me”. But it did.
During the recession I lost my employment and struggled to find work. I was either over or under qualified for every job. Of the jobs I was perfect for, there were 100 applications including mine and being offered an interview was a privilege.
During the job searching the debts piled high until the final total unsecured debt bounced off the page a deep red colour stating I owed tens of thousands of pounds. I couldn’t believe it. The companies wanted their money back immediately and I didn’t have it. We were living on basic income and survival was the key; I certainly didn’t have money to pay towards my debts.
After almost a year of trying to negotiate with creditors, bailiffs, the court system and countless visits to my doctors for finance related health problems, I declared myself bankrupt on undoubtedly the darkest day of my life.
“Light at the end of the tunnel”
On entering bankruptcy I had one thought – don’t let bankruptcy negatively define you. It’s happened and I’m out the other side. I’ve learned a harsh reality about debt and I can use this to help others.
The mixed emotions of being declared bankrupt were a surprise to me. It was both the saddest and most relieved I had been for a long time. The stress almost instantly was lifted, I got a great night’s sleep and the plan to move forward was clear in my mind. I’m not typically a negative person so I’ve taken my time over writing this blog until my bankruptcy was finished, but during this time I’ve been reading and learning. Now back in employment I hope to be able to share with you my thoughts, opinions and experiences of debt and finance.
This blog Debt Advice Resource is designed to help people struggling with debt and also enable people to avoid the pitfalls which come with credit. We all have a different story about how we acquired debt and subsequently fell into the debt trap, but together we can help each other back out the other side.
Enough from me, I’m going to read and learn from my other Yakezie comrades. I’m interested to learn from their writing styles and pick up some good tips fron people more professional than myself. Wish me luck!