From £10k to less than £3k debt in a week! How an unaffordable purchase has helped me wipe £7k debts

What’s good everyone??

Writing this it feels like an absolute age since I last updated the world on my situation & it has been!

Mainly due to being lazy! Working most days, then coming home to write a blog always felt like it was a chore, but that’s not the case at all as I love writing these things and sharing my journey with everyone

And now seems like the perfect time to get back onto the blog and update the world after what has been a huge week for myself on my debt free journey

Let’s rewind to this time last week, I was sat with £9825 in debts! Fast forward a week later and my debt is sat at just £2567!! A huge £7258 difference and a big weight lifted from my shoulders

So, how did I go from nearly £10k debts to less than £3k debts in a week!

Unfortunately it’s not some crazy scheme or amazing life hack that I can market and sell. It’s actually due to making an affordability complaint against my car loan company & the result of going further to the financial ombudsman

Back in 2019, after reading an online blog about affordability complaints I decided I would put one forward to Moneybarn about my own car finance

For the duration of the agreement I had struggled to always keep up with payments 1. Because of numerous other debts & payday loans throughout, & 2. Because I was heavily gambling a lot of the time

Initially Moneybarn declined my complaint, saying they had taken all relevant steps, checked all the necessary paperwork and taken my situation at the time into consideration

For the record the only checks that were carried out at the time I took the policy out was that they took a copy of 2 of my payslips

When I bought the car I originally found it, emailed the dealer, and within a couple of hours had the finance agreement in place and was on the way to collect the car

So after failing to get my complaint looked at properly via moneybarn and waiting a few weeks after their response I decided I had nothing to lose and decided to send it to the financial ombudsman service

For those who have not been to the FOS before, you are put into a queue in which you wait for your complaint to be picked up by an adjudicator who will then look at your complaint from both sides before making a decision on what they believe should happen!

Both parties can then accept the outcome or send this to an ombudsman for a final ruling

My case was picked up back in January and after a few months of back and fourth emails and calls with an adjudicator giving them payslips, old statements, credit files etc they came to a decision

At the time of the decision I had already paid the full price of the car and then some & the decision was as follows

• Moneybarn would pay back any over payments above the capital of the car along with 8% simple interest

• Moneybarn would transfer ownership of the vehicle to myself

• Moneybarn would remove any adverse information from my credit file

Let’s just go over the agreement:

The car was priced at £7210.00 with the agreement being made over 60 months

I put £0 deposit down, and monthly payments were around £246

The interest was something around 39.4% if I remember correctly and the total cost of the vehicle/ agreement came in at £14,755.67

Which when I look at it is crazy!! I was paying the price of the car in just interest alone

At the time of the decision from the ombudsman I had paid around £9755

Once everything had been calculated, I was given a redress of £2748

So how did I go from almost £10k debts to under £3k debts? Let’s take a look at what I owed and how I used the cash from the redress

1. Car – £5000 (wiped & ownership transferred)

I had around £5000 left on the agreement but that has now been wiped clean, and I am the owner of the vehicle which is amazing as this is now an asset of mine

Let’s look at the non car loans, I had 2 with Lowell, & 2 with Moorcroft

Non Car Loans:

1. Lowell 1 – £600 (£300 agreed)

2. Lowell 2 – £850 (£500 agreed)

3. Moorcroft – £850 (£10 per month)

4. Moorcroft – £110 (Paid Off)

New Total – £850

The Lowell debts I spoke with them and agreed a lesser figure than that of the original debt to pay these off immediately. I also did this with moorcroft but as they offered a fairly small discount I decided to pay off 1 of the debts and the other is on a £10 payment plan with the outlook to pay this off quicker where possible

We then had the credit cards, both of which were at their max limit but have now been paid off. I’ll be closing the vanquis account once payment clears and only using the capital one card on essentials

1. Vanquis – £250 (Paid Off)

2. Capital One – £250 (Paid Off)

Finally we have the main debts that are left! Debt to family, of course this was the least of my worries as although I am paying these back there is less pressure than that of a debt agency

1. Family: £784

2. Mum – £933

Total – £1717

Misses: £150 (Paid off)

Outstanding Debt Total: £2,567

There we have it, an outstanding amount of just £2567. Whats also important to note that my monthly outgoings have become less, giving me more disposable income at the end of each month & more money that I will look to save, invest & create more streams of income with

The plan moving forward is to now look at becoming fully debt free by the end of the year, paying off the remaining family members & the moorcroft debt too!

I’ll also be looking to sell my car this year and upgrade to a 5 door! A 3 door with a child just isn’t the one.

It’s been a crazy week and I’m glad the outcome went the way it did, moneybarn agreed with the outcome straight away and payment was made within 10 days which was great

The next thing will be to see how my credit file looks once the information had been removed and how I can improve my score going forward

But I’ll be more active on here creating more blogs this year about how that improves, what I’m doing to save and any side hustles I start which I currently have a couple in mind

Also with gyms now back open there will be more fitness related posts and more of what’s going on at the time in life

For now it’s great to be back! I hope you have a fantastic week! If your thinking of looking into affordability complaints check out the debt camel page by searching “Debt Camel” on Google

Stay Safe, Stay Positive, Stay Working Hard

Published by Drage162

Hi Everyone, I’m Jack, I’m 32 from the UK and welcome to my blog Follow my journey as I travel through different stages in life creating a better future for myself and my family Along the way you can take a look at my weight loss progress including how I’m achieving my goals, my weekly reviews & my future plans I’ll take you through my finances! The good, the bad & the ugly as I work to go from £9500 (as of Feb 2021) in debt with no assets to debt free and something to show for myself I have ups and I have downs, days I feel like I can achieve everything and days where I’m not motivated at all but I’ll document that and look to inspire you guys to achieve your goals too Let’s smash 2021 and make it the year we really take control of our lives and set the foundations for an amazing future ♥️

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