The Road to Debt – Part One

Getting into Debt Journey
Image courtesy of Toa55 / FreeDigitalPhotos.net

Let me introduce myself, my name is Rob and I am a 30 something living in the UK who also happens to be in a lot of debt. This blog has been designed to make me accountable to this debt, as well as to help others and also to keep me on track with paying it back.

In this latest post, I will kick things off with the first part of a series of posts detailing the road to debt. It might surprise you if I said that I have already been in debt once and made it through to the other side. The sad fact is yes that is in fact true, not only have I found myself in debt again, but this time things are a whole lot worse.

My problem with money most likely started at a young age. If I had money it would be burning a hole in my pocket and I would be itching to spend it. The same statement holds true even till today to some extent. Whether this money is through earnings or from credit it doesn’t matter, if the money is there then in my mind, it has to be spent.

The Journey Begins…

When I turned 18 a whole world of credit opened up to me. It was early 2001, the credit was flowing and at the time, the banks would lend money to anyone, even financial fools like myself. Tempted at this ‘easy money’ I took out my first personal loan and didn’t look back. Did I pay attention to the interest rate? No of course not why would I do that? Did I consider the impact the monthly payments would have? You guessed it no I didn’t, I was only interested in the cold hard cash making its way to me.

Once the personal loan money had dried up I was thinking about what other credit I could get my hands on. I seemed to be pretty good at spending large amounts of money quickly and needed another fix. It wasn’t long before I had access to more funds because several credit card lenders were more than happy to lend to me, and lend to me they did. It wasn’t long before I maxed out those credit cards too. No problem, I can always get another loan and I did which turned out to be the final nail in the coffin for me financially.

There was no hiding it, my outgoings had exceeded my income by quite a margin. I was faced with two choices, try to increase my income or stop paying my debts. Being a young lad who liked to party, I decided to be irresponsible and stop paying my debt. I wasn’t exactly sure what would happen when I stopped paying it but it wasn’t long before I found out.

The £20,000 realisation

At 20 years old I found myself in around £20,000 of debt. £1000 for every year I had existed. Being young and inexperienced with the world around me, I actually didn’t know what to expect. All I can say is that the debt collection agencies at the time took advantage of that fact and really tested my resolve. I can certainly remember a nasty voice message from Gavin at a company called First Credit. That was the first time I felt a lack of control in my life, like something was going horribly wrong and there wasn’t a thing I could do about it.

I didn’t have anything to show for this debt, except one thing. A computer joystick which I have dubbed the £20,000 joystick. I still have it to this day because it is a reminder of darker times and was supposed to represent what had happened…. I didn’t learn did I?

I thought about how I could pay this debt back and sought advice from several organisations. I wasn’t aware of organisations such as Payplan or StepChange and instead ended up talking to a fee charging company about a Debt Management Plan. I was convinced by their smooth talking and so agreed they could manage this debt on my behalf for a small fee. The first payment I made was the last one I made because that company went bust, taking my money with it. I learned a very valuable lesson. Never pay for Debt Management Plans because you can get them for free.

Starting Over

The debt management company going bust set me back quite a bit and my creditors at the time were not too happy with my lack of payments. Some of them took me to court and I got a couple of County Court Judgments as a result. It was at that point I sought help from an organisation called Payplan who were brilliant and best of all, this didn’t cost me anything. I found out about Payplan when I was working part time at ASDA and so I am quite grateful to them for that. Payplan set me up on a Debt Management Plan and things ticked over nicely for a few years. Feeling quite confident I decided I would take over the plan and manage it myself.

Having my own debt management plan seemed like a scary proposition at first, however once I got it up and running I found out that it wasn’t too bad. I made some really good progress with repaying my debts and even got a couple written off. After five hard years of making payments, I was finally debt free. It felt like a great achievement at the time having paid back £20,000 of debt and getting out to the other side. During the time I was in debt, it was quite a dark and difficult period because I was young, and I didn’t really have the same understanding of things like I do today. I felt that because of my age, some of the debt collection agencies were underhand in the way they dealt with me. All I can say about that is they wouldn’t get away with that today.

In the next part of this series, I will write about the build up to the debt I am currently paying off. I thought it was important to paint a complete picture of how I ended up where I am today, and including my first debt meltdown seemed like a good idea.

Stay Tuned for Next weeks update!

Hopefully you have enjoyed reading this post and I want to say something, from now on all the posts at Debt Advice Blog are going to be more like this one instead of some of the stuff I have put here in the past that isn’t really relevant. I have really gone off course with this blog and also with my debt, but you will find out more about that over the coming months!

I would love to hear from others in debt because knowing others are in the same situation makes things seem better and it is good to talk about debt.

Reader Question: How did you get into debt? Please share your stories below.

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