Squeezing the shrinking debt!

“History has demonstrated that the most notable winners usually encountered heartbreaking obstacles before they triumphed. They won because they refused to become discouraged by their defeats” – Bertie C. Forbes

A year ago we truly got a grip of our finances and decided to put our house on the market and went through the motions of having it valued and then went about tidying it up and making the place sellable. We duly spent money on the place, put it on the market and by late November last year; had sold, had an offer accepted and had our new mortgage application in place. We were hit with the bomb of the building society’s calculation of affordability and despite the fact that we had never missed a payment with any of our creditors; were told – “You can’t afford a mortgage due to your outstanding borrowings”.

We were then faced with staying in a huge house, that we couldn’t sell and we’re locked into a property and that we were going no where. The sums are incredible and my outgoings per month make up 82% of our income before we pay for food, transport, clothes or fripperies such as a hair cut! They are so excessive as I have been paying debts back at three times more than the minimum rate to pay off what I owe as quickly as I can. We’ve calculated that our next affordable holiday will be in 2015! However there is really good news.

Due to overtime and over payment I now owe HBOS £2137 (July 2009 I owed the £7300!!)
I owe Fiat Finance £6424 (January 2009 I owed £9999!!) – I owe Lloyds personal Loan £13,556 (July 2007 I owed £25,000) – So – I used to owe £42,229 and now it’s £22,122 – I have paid off £20,107.

It’s been another tough week. I felt forced to go to work even though I’ve had a hacking chest infection. We’ve cut back on everything we possibly can and then the car started leaking water and the repair is not covered by the warranty and we don’t know where we will get the money to fix it. I hold onto a date in my mind where I will start to feel a big difference from my frugality. Think of this…………..when you watch the opening ceremony of the London Olympics – we will have paid off the last of our debt repayments; I’m holding onto that thought as I need to be optimistic!


12 thoughts on “Squeezing the shrinking debt!

  1. ooh OUCH. that is a painful story. (can you rent out a room in your big house? have foreign students come and stay and learn english?? I know someone who does that…..) am sure you have thought of all the ideas… or rent the whole lot out and go and live as a housekeeper or something some such drastic measure…??

    But hearing what you have done – you have done AMAZINGLY well. What an incredible achievement. I love reading your blog by the way!! keep on going. Will be your cheerleader if you like.YAAAAY go you


  2. You are doing a fantastic job! Keep it up it will be so freeing. Its such a hard thing this finance management, and can be so demoralising. You are an inspiration, make me feel a bit optimistic. Hope you are feeling a bit better.

    Vicky x


  3. Debt can be crippling. My dad has always told me and my sister never to borrow money from anyone, least of all the banks. His argument has always been that once you have gotten yourself into debt you would struggle with it all your life. I have a healthy respect for money. I would not even let myself take out a loan. My motto is: if you can`t pay for something you want with cash, don`t even be tempted to have it. I`d rather go without if I can`t put my hand in my pocket and pay for it there and then. But, for you to have managed to pay off a large amount is quite inspiring. Life is hard enough as it is, and debt just adds another heavy burden on your shoulders. I wish you luck in paying it all off, eventually.


  4. Think of what you have achieved so far, you are doing a great job. We are in the process of changing mortgage providers as we are currently with the Skipton – I will so no more about them, ahem. It is so difficut sorting out debts, so any little saving is great but what you have done so far is terrific. Well done.
    Twiggy x


  5. Its darn tough Jane. Yet,you have done amazingly, wow!! Not many of us could have paid off such a massive amount of dept so fast. I take my hat off to you and your other half.


  6. You should be very proud of how far you have come. I know it is hard to keep up the pace of paying it down. As my former boss used to say “keep it in the middle of the road”.


  7. That phrase, “not covered by the warranty” must be particularly hard to stomach, but try not to let it take the shine off your debt-busting achievements.
    You will have the last laugh.


  8. There is a saying that you can reach any goal by appplying two simple steps:

    1) Start.
    2) Keep going.

    Well, you've done the first one and you are going well with the second one. You strike me as a resourceful and tenacious woman, and I don't think you'll fail.

    You have made real and measurable progress towards your goal. Believe me, now is the right time to do what you are doing. You are setting the foundation for a secure financial life, and I know that in years to come you will be so grateful that you did this.

    Once you have 'murdered' your debt, you will be able to look again at moving to a smaller home. The mortgage deals will be easier then, too, with a bit of luck. Ironically, because you had high debts that you are paying off so well, you will end up with a gold-plated credit score and they will all be falling over each other to lend to you!!

    Yours in encouragement,



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