Crippling debts left us fighting for survival

14 November 2014

Being £40,000 in debt isn’t a nice place to be. This was the situation we found ourselves in last August and it hit us like a ton of bricks.

I had recently left my job in the City to become a stay-at-home-dad to my youngest daughter Chloe. What with rising travel costs and excruciating childcare fees (which my salary only just covered) as well as after-school care for my elder daughter, it made financial sense for me to leave and look for another way to bring in some money. Also, with my other half in a secure-ish public sector role quite close to home, it made sense for me to be the one who quit. 

Things felt like they were improving slightly, until one day in late August when I went to the cupboards to work out what to cook for dinner – there wasn’t much food at all. Even that didn’t seem like the first tremors of an impending disaster because we could simply pop to the shop for supplies. But I checked our bank account and discovered there we only had a few pounds to our name – and that was the last part of an ever-increasing overdraft.

We were in trouble. 

Direct debits had come out, we had hardly any food, no cash in the bank, and things were bleak. For the next week until payday, we struggled through. We had to make the best of a bad situation and we did just that.

The one good thing to come out of this awful situation was that we had our wake-up call. For the last five or six years leading up to that point, we hadn’t been very savvy with financial matters – that was going to change.

Once payday came, we sat down and laid everything on the table. Not only were we struggling but after looking at our overall financial situation we were also in £40,000 worth of debt.

Credit cards, overdrafts, loans, redundancies and a number of bad financial decisions had led us to this point of no return. We really had buried our heads in the sand for a number of years and debt had been increasingly mounting up.

Sitting there that day we decided to get our act together. We began to put together a complete picture of our financial situation. It wasn’t pretty and it took some time but once we had finished we could see what we had coming in, what we had going out and what we owed to various companies and debt collection agencies.

The next step was to reduce our outgoings. We used comparison sites to get a better deal on energy and insurances. We set ourselves a strict but realistic budget for food and vowed to cook from scratch and not have anymore takeaways.

Finally, we got in contact with every single company we owed money to and set up a payment plan we could afford. It was a tough thing to do, repeating the same information to debtor after debtor, listing our budget and how much we owed to others. It was quite humiliating and also, in a strange way, humbling.

Thinking back to that situation fills me with dread, even now, but I don’t mind that. We fell into the situation where we either survived or we didn’t. We decided to survive.

With so many people in debt, I expect my story isn’t rare but perhaps talking about it is. All I can say is for all those years of being in denial about our situation, the relief to finally admit we were in trouble and to start taking back control of our finances and our lives was the best feeling in the world. 

The best part is that, if you’re in that situation, you can do it too. Good luck.