How I went from £36k in debt to being back in black

Today we’re honoured to welcome Lisa, also known as @CoffeeCurls, to MoneyAware. From the lows of being in severe debt to finally paying the debt off with help from StepChange Debt Charity, this wonderful article about her own debt experience was originally posted on her own blog. It’s well worth reading.

Debt file

If you’re in debt and feel that you need some help, I hope that reading this will reassure you and offer some useful suggestions. It depicts how I went from being £36,000 in debt and on the verge of depression and bankruptcy, to being ‘back in black’.

In the summer of 2004 my husband left me. He left suddenly (the night before our youngest son’s 3rd birthday). I had no warning of this and, although people find it hard to believe, I had absolutely no idea that it was going to happen.

At the time, bankruptcy was completely taboo. I have to say if it happened to me now, rather than then, I would have given serious thought to going bankrupt. Even in 2004 (when the after-effects of bankruptcy were much harsher) every debt advisor I spoke to told me to file for bankruptcy.

I knew we had debts, money had been somewhat scarce for several years as he had been frequently ‘off sick’ with a bad back and depression. I’m ashamed to admit it now but it just became a way of life.

Only a small amount of debt ever got repaid

We had re-mortgaged the house several times, once to consolidate all the debts, except that when the money came through he managed to convince me that he NEEDED some tools (although only expensive ones it seems), that he DESERVED a PlayStation, an Xbox and some games, and some new clothes, and we NEEDED a brand new lawnmower.

His attitude to money was always bad. Even when he wasn’t working he would think nothing of spending £5 on a PlayStation magazine and then say that we couldn’t afford branded nappies.

I stood at the checkout in Tesco more times than I care to remember with flaming red cheeks when my debit card was rejected, having to then try and work out how much to ask the checkout lady to take off before the card was tried again.

Once when I stood there having given back bubble bath, washing powder and tea bags, I was still £1.27 short. As I looked at the rest of the shopping trying to work out what else I could live without, the man behind me paid the difference. I was so embarrassed that I don’t even know if I thanked him.

My mum set up a bank account

She started paying £20 a month into it and said it was for me to treat myself with. I didn’t tell him about it. It didn’t seem deceitful as I only ever spent the money on food shopping anyway. Once when I went to withdraw the £20 to use for shopping I was stunned to see there was no money available – when I checked further I saw that the £20 had already been withdrawn.

I asked him about it, he said that found the card in my purse and we’d needed milk so he took the money out. The pin was my birth date – he had guessed it. From then on he would wait for that £20 to land and whip it out straight away. He often drove to the cashpoint at just gone midnight to make sure that he got the money.


Below is a list of the debts I was left with (and how much it actually cost me to repay them). This is just from the paperwork that I can find now. I think there were more:

  • Nationwide negative equity £12,000 (paid £4,600)
  • Halifax overdraft £1,555.54 (paid £1,150)
  • Barclays business overdraft £1,840.69 (paid £921)
  • Barclays overdraft £974 (paid £750)
  • Barclaycard £2,292.35 (paid £1,375.41)
  • Debenhams store card £2,635 (paid £2,355)
  • Dorothy Perkins store card £1,435 (paid £910)
  • Capital One Visa £879 (paid £425)
  • Capital One Visa £1,529 (paid £1,100)
  • Business loan £5,000 (paid £2,000)
  • Woolwich overdraft £1,841 (paid £1,400)
  • Alliance & Leicester Loan £1,428.71 (paid £800)
  • M&S store card £893 (paid £715)
  • Thames Credit £932 (paid £800)
  • Welcome financial services £781.20 (paid £781.20)

As you can see, even with just the debts that I can remember, I was left with £36,016.49 of debt. By negotiating with each creditor it only cost me £20,082.61 to pay off. (Although I’m pretty sure the total amount I spent paying off debts was closer to £28K so there must be a few that I’ve missed.)

It took me 6 years – the last debt was cleared in February 2010

My divorce solicitor told me that I wouldn’t be able to assign any of the debts over to my ex. She advised me to go bankrupt. In retrospect I should have sought more advice on this. The Citizens Advice Bureau (CAB) were very helpful, utterly non-judgmental and helped me set up a payment schedule, paying £1 a month to each company.

StepChange Debt Charity agreed with CAB. I was embarrassed about speaking to them as I thought they would ask me what I’d spent the money on but they didn’t, they just listened and helped. It was like a weight being lifted off my shoulders having someone listen to my dreadful secret and not deem me to be a bad person.

I didn’t answer my home phone for several years unless I was expecting a call, as most of the time it was a debt company chasing money. I still find it hard to answer it even now. Some companies are OK to deal with but some are terrifying.

What makes it even more complicated is that most companies sell on debts, meaning that it was almost impossible to keep track of who I had paid what to – I’m quite sure that I repaid some of the debts twice! For example – the £1,840 debt to Barclays was at one point being chased by five different companies. FIVE! All five companies claimed theirs was a different debt and that I HAD to deal with them.

Sometimes they phoned, sometimes they wrote, sometimes they sent bailiffs round but mostly it was a combination of all three methods. Like most of the debts, this particular one was a joint debt so I gave all of them my ex’s details too. However they very blatantly told me that it was easier to pursue me for the debt as he was hard to get hold of!

Under the rules of joint and several liability the debt companies had the legal right to pursue me for the entire debt. They chose to do that as because as a mother of two young children I was an ‘easy target’, threatening phone calls and visits from big scary men terrified me.

Learn from your mistakes

Now, six years on, all my debts are repaid and my credit file is clean. I can’t tell you how happy I was recently to see that my credit score is now 999!

I would also suggest taking precautions (not that kind…) when you enter into a new relationship. Think very carefully before opening a joint account – do you really need a joint one?

Don’t put credit in your name if it is for someone else, however much you love them. Would you be happy to accept the debt if they left you with it? That may sound cynical but it isn’t. It’s sensible, it’s practical and it will protect you.

A frightening number of people go bankrupt more than once – don’t be one of them. Live within your means, be proud of knowing that you can afford what you buy and teach your children the value of money.

My main message is ‘live within your means’ such a simple concept, yet so many of us fail to do it. Don’t ignore your debts. They truly don’t go away they just get bigger and more unmanageable.

Here are my tips to get you started on the road to debt recovery:

  • Get a copy of your credit file – this is a huge step towards taking control, yes it will probably tell you things that you don’t want to know, but do you know what? The debts are there whether you acknowledge them or not!
  • You can get a free trial from Experian, Equifax and Call Credit so you can view your credit file
  • Get an A4 ring folder and some dividers and make a file for each debt, then make an appointment to see a debt adviser
  • DO NOT PAY ANYONE TO ‘SORT OUT’ YOUR DEBTS! Talk to a FREE advisory service like StepChange. Either phone them or email them ASAP. Tell them you are experiencing financial difficulties. Tell them your income and your outgoings and make sure you include everything that you have to pay out for. They will help you.
  • If you have some money to repay a debt, don’t offer to repay the full amount – always offer a reduced settlement figure – 99% of the time they will either accept it or negotiate.

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Posted by in Living with debt