Lessons I have learnt about debt

When you are desperate to clear your debts, you look into as many options as you can.  And, those options have been repeated by well being comments via this site.   They are all top tips and good advice, however this is what I have found out.

There are many ways to help with debt and financial difficulty, some work, some don’t and some are not applicable sadly.   What I have found out is that is depends on your debt and current situation. The factors that affect how you can get help are your job, the money you earn, who you owe money to and your health.

There are only 2 easy ways out of clearing your debt, and I use the word easy as your debt will be wiped out BUT your life as a future creditor is over.  They are, of course, Bankruptcy and Insolvency.   These 2 options come with drastic consequences but depending on your life situation, it may be a great move for you.  For instance, if you were single with no kids and could start again, is losing your home to clear your debts a bad thing?  Compare that with a family faced with the same option, and the single person can look positively at it.   Insolvency is similar, but costs a fair bit of money to set up.  It is unlikely you will have a spare thousand or 3 to set it up but you CAN include tax debt and it is unlikely you will lose your home.

Tax debt, we have mentioned it so many times, but any money you owe to the Government cannot be included in any conventional debt relief schemes and loans.   I am stating this fact again so that you understand why I could not take up some of the options.

Loans – so many loans available, but in 2 categories.  Unsecured and Secured.   Unsecured is not an option for anyone with bad credit.  It is a NO immediately.  So, secured loans are an option.  The drawback is obvious, you are moving all your debt into a loan directly against your home.  The interest rates are quite high too.  For example, I looked at a £25,000 secured loan and the amount to pay back was a hefty £33,000.  Additionally, you can only borrow an amount that is comparitable with your equity.  So if you have 10K equity, you can only borrow 10K.

Bad credit equals no new credit cards, so no consolidating balances onto different credit cards with lower interest rates.

Bank loans, again if you are honest you will lose.  Sadly, I was too honest for my own good.  Mention tax debt and it is goodbye sir, good luck.  Quite why HMRC debts are ringfenced are beyond me.  Same with mortgage payment holidays or partial payments, mention what it is for and it is a NO.

Debt Charities, wonderful for advice but really geared for smaller debt problems and often solved by re-budgeting or making key changes in your lifestyle.  They do a wonderful job helping people but again, I would say this is for ‘normal debt’.

So what does work?

Well, for me, it looks like Insolvency.  However, there is only one other thing that has helped me, and that was the use of a reputable debt consolidation/management company.  I did my own research, found a good one that I will happily recommend them should anyone ask.  It was the only option whereby I could include most of my debts and debtors and have them all move into a monthly lower payment.  The company got my interest frozen for 12 months and a decent payment plan which meant, importantly, that I was still decreasing the balances.  The cynical will state you pay a fee each month, and you are absolutely right to say that.  I pay £30 month fee, now if you compare that to the combined interest of all the bills which was £136/month then it was worth it.  The extra money left allowed me to pay back 2 other loans.

To summarise, research all options and don’t go with the popular choices.  Not all of them are a fit for individual circumstances, most importantly don’t ‘panic sign up’ to things.  Honestly, if you have a tax debt like me then don’t waste your time on standard solutions, as it cannot be included.

It is a world geared towards the wealthy, if you are down and out you have to fight like mad to recover from it or get really lucky.  That is how I have found it to be.

How does it work then, free money?

So, I follow another blog.  I am not going to name the blog or link to it, for the main reason that I don’t want to drive traffic to it!   Why am I going to speak about another blogger’s blog?  Well, stick with it, I have some questions.

I have not been blogging very long, but I am aware of the different reasons for having a blog.  I started mine purely and simply to act as a window, a window to my inner happenings so that I can give, and receive, advice.  I do not review anything, or test freebies, or ask for anything.  But each to their own, their are some brilliant review blogs.  Some have made me buy things!

But, this blog I read.  It is purely to get people to give him money to clear his debts.  Do you know what though, people do!  So, here is my question – why?  I am big and bold enough to admit I got myself into the majority of my mess, not helped by the HMRC obviously, but I expect nobody else to clear it for me.  Don’t get me wrong, I hope for a lottery win weekly or cash award, or even to meet a rich lady who just happens to love me!   No, if you met me in person I am a very closed book.  On here, I can be open because nobody knows me, but in real life you would know nothing is wrong.

Back to this blog, every new post updates the readers on how much people have contributed and how much has been paid off.  There is an up to date contributions counter (currently at $768) and link to his paypal address.   How is this working?  why are people paying money into this account?   I have read all his posts, the debt appears to stem from student debt so why are people obliged to help him and not others?  I have no clue.  The one difference is it is an American blog, so perhaps people in the U.S. are more generous?

As an experiment, I added my paypal to the About Me section.  Guess how many contributions?  NONE!  But, that is exactly what I expected and nothing more.

Hence, I am confused.  How do some blogs achieve ‘free money’ over others?  I would be more inclined to contribute towards worthy causes such as severe illnesses or family trauma, but a blog about asking for help to clear debt.  No clue how that works.

What about a Pay it Forward idea?  Let’s say, for every five pounds contributed I would do a good deed as dictated by the donor? eg, help someone across the road.  Would people go for that?  Again, I think not.  And why, because those should be everyday deeds, and that is how Karma is born.  Or, the concept of Karma although I have never seen much evidence of it personally.

Rarely do I actually invite comments but, this time, I would love to know people’s opinions of why random strangers are contributing money.

1000 up!

well, I never expected this many views but it has happened.  I am now over 1000 views!  Yes, the hardened bloggers may scoff at this number but for me, I set this up as a way of communicating what I am going through, to people who don’t know me.

1000 views, and from so many countries as well.   I truly hope my posts so far have been interesting and people can relate.  There have been some great comments and some excellent advice too.  Blogging is a real community isn’t it.

Who knows, perhaps when I get to 5000 views, I will be in a better position.  That is something to aim for I think.

Some of the other blogs I have read, and indeed I follow a few, are truly excellent.  I often try and emulate them but at the end of the day, I can only write what is in my head.

Hope everyone has had a good weekend and keep reading!

Utterly exhausted

Well, it happened, I collapsed.  Not literally in the street, but when I got home.  I think my mind and body had had enough and decided it was time to take a break.

As you all know, the worry of debt and trying to run a house/looking after my children whilst doing my job has been hard.  Made even harder recently by the constant demands from my debtors.  I do not sleep very well, I rarely do in fact.  I wake far too early and cannot sleep, something I have to resolve one way or another.

Yesterday though, I had to drive over 500 miles in a day for work.  Did it but 100 miles from home I knew I was in trouble, my head was thumping and my eyes hurt.  Stopped for a while but couldn’t wait to get home, which seemed to take an eternity.  The additional hazard of torrential rain didn’t help either as I was forced to concentrate even more.

Finally got home as darkness was setting in, quite literally stumbled through the door.  I think my dog knew I was in trouble as he came straight up to me and nudged me.  It was evident a migraine was coming, only my second ever one.  I could barely stand up.

Made a decision to go upstairs for a lay down, didn’t even bother to get undressed.  The dog followed me, turned the lights out and lay down.  Woke up at 2am!!!  I had laid down at 7.30pm…what the hell happened?  My suit was creased to hell, and the dog was licking my head.  My body was aching and I was utterly exhausted.

I think there comes a point where all the front, effort, and upset takes its toll.  I am glad it happened when I was in on my own too.  Clearly it shows that you need to take time out from everything and relax.  It also demonstrates how constant hounding from people (hmrc) can push you to this brink of shut down.

It’s also very evident that if you are on your own, as in not in a full-time relationship, nobody looks out for you.   I’ve taken it as a wake up call, I need to find a way to recharge although I fear I will never truly relax until my debt is clear.

For once my ex doesn’t cost me money

Today was a day of saving money.  The major thing that comes out of debt, and the demands of those wanting the debt is that forces you to look at ways to save money.  Ordinarily I would put off looking on comparison sites as it is time consuming and somewhat boring.  However, we are where we are now..

The first moneysaver was I cancelled the gym.  I have a bit of gym equipment at home (not worth much so I can’t sell it!) so I figured if I use my bike more then it is not worth going.  That was £30/month saving me £360 a year.

The second one, I needed the ex.  I have changed the mortgage life insurance due to multiple blunders by my current provider, but it did force me to question how much I was paying.  Went on one of the comparison sites and got the same policy, with extra benefits for £21.15/month compared to my current £47.45/month.  Why did I need my ex?  well she is still on the mortgage of course and thus joint cover is needed.

Asked her and, of course, she jumped at the chance to get free life insurance.  She, of course, fails to realise this is not life insurance but insurance that pays off your mortgage if you perish.   So actually, more reason for her to drop off the planet!  Joking, the kids would be devastated..

So today I have saved £360 + £290 = £650/year.   That is fair whack, especially for someone in my precarious position.  Now it gives me the enthusiasm to look at everything else I can lower costs on.

how do mum’s know????

Weird isn’t it?  I have done absolutely everything possible to hide this nightmare from my family, and I mean everything.   Largely due to pride and the fact I desperately tried to fix this.

We all know my reasons, I hate being the black sheep of the family.  I am the only one who is divorced, who’s wife had an affair and ran off, the single parent struggling…….I could go on.

The thing is, it is down to pride but also I have always been able to fix things.  By hook or by crook I have paid so much money back and even this month I have paid off another £700 from other debts than the HMRC ones.  But I think it has been obvious from my demeanour something is dreadfully wrong.  I know I have been very quiet and generally downtrodden, and I haven’t meant to be, but when you are beaten you are beaten.

Weirdly, I spoke to a financial specialist today about IVA’s.  It is the ONLY debt solution that will allow tax debt to be included, so I was considering this and thought maybe, just maybe, I would be able to keep this a secret.

Then my mum rang tonight.

It doesn’t matter how old you are, they always know.  The normal conversation then cut short with “can’t you tell me what is wrong?”.  tried to get away with it but then she countered with “tell me about your tax debt and how I can help?”.  How did she know you wonder?  Well, my mail was redirected, she kept a couple back and opened them and was shocked at the content of the letters, or more to the point “the disgusting wording of the letters”.

However, I haven’t told the whole truth yet, I have told her I am still looking at options but I immediately felt better.

How did she know eh?  I don’t mean because she read the letters, but how did she know there was something seriously wrong?  You see, part of me is never to have a breakdown, I just go quiet and look at options myself.  I don’t think I have been massively different but obviously I was.

Perhaps, this is life telling me I have tried every option and now to go with the obvious one and get help from my family.  And I have tried everything as you know.

Decisions still to be made but a door has been opened, so if I come clean it won’t be a complete shock.

as my life struggles, a new one arrives

Through my recent few days of pure unhappiness, caused by the constant rejection from loan options, a rare glint of sunshine through the clouds.  I have another nephew!

It made me think, I am now meant to be a positive influence on yet another child.  That’s my children and my nieces and nephews, they look to me as the fun uncle.  And mostly I am.

Children have absolutely no clue what some adults are going through, and I truly think that is best.  I have learnt in the last few years that no matter how dreadful your day, you always greet you children with a smile and hug.  As long as they think everything is ok, then they feel safe.  I also think it’s an adult’s role to shield children from real life traumas, which is what I have done.

I googled HMRC harassment, so many stories of people who were driven to a nervous breakdown by it.  I am determined not to go down that route, I’m too strong for that and too proud a father.  But, everyone handles situations differently.  Personally, I go quiet and step away from my friends for a few days and try hard to regain my perspective.

This time, a baby boy is that perspective.   Just got to raise the funds to get my brother and sister and law a gift!

Why does a single parent have no power?

This is from my experience, but I would welcome comments from other single parents.   It is my experience that, despite my ex moving out 3 years ago, I have no power at all.

The first example is this weekend, I was due to have a weekend to myself and had some great plans.  But now I am having the children.  This is ordinarily fine as I love having my kids, but now I am forced to cancel my plans with little or no notice.  This has happened a lot.  It infuriates me, her social life continues with nights out, champagne bars, weekends away but what about me?  I rarely go anywhere, and if I do it normally gets stitched up.

The cynical amongst you will say “tell her no”.  But, how do you do that when it comes to your children?  Like I have said before, the children always come first so I suck it up.  But how can my life every truly move on?  I am destined to remain the children’s security and support until they are 18 whilst their mother enjoys her ‘fabulous’ new life?  It would seem so.

Example 2, I did my financial review with my mortgage company as I am still negotiating payment holidays or reduced payments for 2 months.  I should say, I have never missed a single payment and don’t intent to, it would have just freed up extra money.  Upon the review conclusion, because I have been totally honest with them about the relationship status, I  have now moved OUT of the criteria of payment holidays and are no longer eligible.  So I then asked how to remove her from the mortgage, again..a different review to see if I qualify.  So, I have paid every single solitary bill for 8 years, she has no interest in the property as has lived elsewhere for years but she still has to be included?

Honestly, I am stuck with the spectre of my ex.  I am stuck in time while she moves on rapidly.

Do you remember my post about having a plan nobody will back?  Well it is still continuing, you are simply not allowed to resolve or improve your situation, it almost makes you wish you had not put anybody’s name on anything.   I just feel completely and utterly trapped in multiple financial agreements that she has contributed absolutely nothing towards, but also need her permission to change anything.

This country is so utterly messed up, there is no support at all for single parents or empathy actually. One person moves on whilst the other person struggles with their head barely above water.

Not a happy day today.  I just cannot see a way out of all this…

oh NOW you care??

Today was an odd day, decided to spend a lot of moving money around, looking for better deals etc all for a united goal – clearing debt faster.   Some moderate success but then came the mail….

For once, no threatening letters.  Always nice to not receive threats, but what was this little white envelope?  Oh it’s a ‘helpful letter’ from my bank offering me financial advice and assistance as they have ‘noticed’ I am experiencing financial difficulties.

But hold on one minute there, do any readers remember this post about being doomed?   Is this the very same bank who refused to give me my bank charges back?  The same bank I have reported to the financial ombudsman?  Why yes it is.

You will notice this post is laced with sarcasm, sadly this is utterly unavoidable.

My favourite part of the letter was “we have noticed that you are constantly paying bank charges and we would love to organise a meeting to go through your options.”   Hmmm yes, now would that be the meeting I asked for many times and I didn’t qualify?

It’s amazing isn’t it?  Genuinely ask for assistance from the “big guys” and get told to do one but report them, well then you are the most loved customer in the world.

So, I will leave the complaint to run it’s true course AND accept the offer a meeting to plough through my bank account.  That won’t take long.

Let’s see what happens.

christmas fear begins

Anyone else worried about Christmas yet?

I have always loved Christmas, nor really sure why, it is just a happy time of year.  Prior to this year, I always managed to keep a little bit of money back in a Christmas savings account so that my children had what they wanted.  But this year…

I have not managed to save anything obviously, due to the constant demands for my money.   I have been lucky enough to win a couple of gifts for them, but the lists arrived yesterday.  Handed to me by two excited children to hand to Santa.

I read that note to Santa and felt that instant dread, as I can barely afford any of it.  However, I have never been a father who won’t do anything to provide for them.  So, it may be the time to sell one of my beloved possessions, which forms a large part of my ‘secret hobby’.  An expensive item but something I have managed to hold on to, but it may be that I have to back down and get the cash.

I haven’t stopped entering thousands of competitions in the hope I win some toys.  But it isn’t just for my children, I have nieces and nephews too.   For the first time in my life, I am not looking forward to Christmas at all.

The sceptre of Debt affects every walk of your life, it is always there.  You now constantly worry about major events, events like Christmas, birthdays, celebrations, school trips and then your own household bills, social life and so on.

I still have 2 months but I am expecting more brown envelopes soon.   Whatever happens, I will do my absolute best to make this Christmas wonderful for them.