Hey guys! The other week on Twitter I asked people what kind of personal interest piece they’d like to see on the blog, and with a pretty huge majority, being in debt won. So I’m going to share a little story about what I’ve learnt from being in debt.
I managed to get myself into debt very easily. I never went to university, so I had no student loans to worry about, but what I did have was a catalogue account, a credit card, and a business start-up. I won’t bother with the details of how and why, because it’s not relevant really, but needless to say, in late 2014 I found myself unemployed, and up to my eyeballs in and trying to ignore a massive pile of debt.
At 24 years old I was fielding countless phone calls a day, even to the point of unplugging the house phone; letters of final demand would come through the door and I wouldn’t bother opening them, I just stuffed them in a folder to ‘deal with later’. My business had failed, it was winter on Skye, and I had to sign on to scrape by.
I suppose I was lucky during this period of my life that I could lean on my family. My little brother especially was very generous and would lend me money, buy me dinner, and pay for fuel so I could attend job interviews and my meetings at the Job Centre. Eventually, I had to sell my car, and get in touch with a local debt counselling service.
I look back on it now and realise how much it affected me. I was crabby and stressed and very easily upset. To be honest, I was scared. Scared because I couldn’t see a way out of all the bailiff threats and angry phone calls; scared of what it might mean if I opened and read each of the letters. When I first started debt councelling I realised just how bad things were – the only option I had at the time was to go bankrupt. I received about £50 every two weeks, which was nowhere near enough for me to start paying back my debt in any amount my creditors would accept. On the 22nd April 2016, after months of paperwork and applications, I was declared bankrupt. Yes – it was a very long process!
The silver lining was that my debt counsellors took all my frightening letters away with them, and they wrote to each of my creditors and stopped the phone calls (mostly). Other than all the stress of finding work, submitting paperwork to the debt people, and having to stick to a budget (which I had never done before), things started to very slowly get better.
As of the 22nd October, I’m now a discharged bankrupt. My debt has been written off, I have no credit accounts, no catalogues, not even a monthly phone bill, and it’s been a much bigger weight off my mind than I thought it would be.
What I’ve learnt from being in debt is simple: the entire system is designed to trap you. I got a credit card at 18 to start building a credit rating so I could get a mortgage before I was 30. That doesn’t work. But equally, you can’t build a credit rating without first getting into some form of debt. It takes minutes to get a credit card or catalogue account, but literally years to pay it off (or in my case have it written off).
My bankruptcy will appear on my credit file for up to 6 years, meaning I’ll be 32 when I can finally apply for a mortgage, or finance of any sort. I have finally learnt to budget, spending a few afternoons every month working out my exact income, listing all my outgoings, and prioritising additional expenses, and then allowing myself a weekly budget for food, fuel, cats and such like.
I’ve also learnt that everyone, including me, is really bad at ignoring things and hoping they’ll go away. Newsflash people – it won’t get better or go away just because you’re standing there with your fingers in your ears and eyes tight shut shouting “LALALA I can’t hear you”. Pull up your big girl pants and deal with it.
The last thing I’ve learnt from going bankrupt, more so than being in debt, is that it’s really not the end of the world. I’m debt free at 26, will be able to buy a house in my early 30s, and live a very good life within my means. How many 20-somethings can actually say that in this day and age? It’s a big scary word, but as one whose lived the reality, I promise it’s not as scary as people make out. There’s a stigma attached to being bankrupt that people struggle to get past, which while understandable, is pretty archaic and outdated.
To anyone struggling with debt I would say this: you’re most definitely not alone, and there are plenty of companies who can help you. I know it’s scary, but don’t ignore the problem. Read the letters, pay off what you can, and if you’re not wanting to go it alone, get in touch with a debt counselling service. They can really take a lot of the stress away from you. Then, once you’re out of debt, try your hardest not to get back into it! I know it’s a cliche, but it is possible to live without a credit card!