February 2014 Debt Repayment Update: Are You Sitting Down?

Happy Friday! Hope you’ve all had a good week? I promise I will bring back Friday’s Fab Links soon but it’s that time of the month again where I get to report our progress on getting out of debt!

Well, I have three little snippets of debt news to report this month: the first is very dull and boring; the second is pretty darn good and the third piece of news is quite frankly astonishing. Buckle up your seatbelts!

The dull and boring debt news

We’re still taking over our debt management plan, it’s taking longer than we thought and therefore we haven’t managed to make any more extra payments towards our debt. This brings our debt total down to £32,995.39.  Not all that exciting especially when we compare it to last month’s debt total figure of £33,242.89. At least we’ve dropped down into the next thousand pound bracket though!

The pretty darn good debt news

We’ve managed to save £500 this month, which will go towards the debts when we get our paperwork sorted out. That’s £900 saved towards the debts if we include the £400 from last month! This month’s savings have come from me taking on some extra work (day job not side income though) and we’ve been even more strict with our food shopping budget than usual.

The quite frankly astonishing debt news

In the UK, there’s been a pretty big scandal over the last few years in relation to banks and credit card companies mis-selling Payment Protection Insurance (PPI). The hubby and I have been plagued by annoying PPI claim companies for a long time now by phone, email and text.

For ages we ignored the automated phone calls we kept receiving because we didn’t think we had any PPI on any of our loans or credit cards. Then towards the end of last year, I read this on Money Saving Expert about the mis-selling of PPI. The information I found here confirms that some creditors added on PPI without the customer being made aware. Gasp! 🙂

So after Christmas, I decided to investigate as to whether we did indeed have PPI on any of our past loans or credit cards. I looked into this myself rather than using a PPI company to do this for us because I thought the process seemed straightforward enough – I also didn’t like idea of a PPI company taking a commission should they manage to dig up any mis-sold PPI.

After a few letters backwards and forwards to all the companies we had loans or credit cards with over the past 10 years, we found out that the hubby had PPI on a credit card and loan with the same company (Egg) before he entered into his debt management plan. We didn’t know about this, so we immediately disputed the PPI by going through a PPI claims process. (I’ll be writing another post soon as to what I did to investigate the PPI myself).

Well, guess what? It only turns out that we were mis-sold PPI!! On one of those products at least – the other one is now going to the Financial Ombudsman for further consideration. The astonishing fact that I am reporting back to you is this: the hubby and I are apparently going to receive a PPI refund for several thousand pounds!!!!!

I won’t detail the exact amount that we are due to receive yet because we won’t be in receipt of it for another few weeks and I don’t want to jinx anything (yes I’m superstitious) plus it all seems rather surreal. I will say though that it’s 4 figures and not 5. 🙂 Once we receive this refund, it will immediately go straight off the debts along with our recent savings of £900.

Full and final settlement offers

I am hoping to make full and final settlement offers on some of the debts within our debt management plan with a view to clearing a proportion of them. What this means is that I’ll be asking some of our creditors to negotiate with us to agree a reduced offer in order to clear some of the balances. I’m sure not all of you will agree with this but I hope you can put yourself in my shoes for a moment.

The hubby and I have been in debt for a long time and almost three years ago, we had no choice but to enter into a debt management plan because we were struggling to put food on the table. Most of our debt was of course our own fault and as I hope this blog shows, we have seriously learned our lesson about borrowing money!! But we did also run into some unfortunate circumstances with the hubby’s business which led to more debt beyond our control further down the line.

We want to be fair to our creditors but also to ourselves too. We’ve been charged all sorts of fees and interest in the past despite informing our creditors that we were struggling. They didn’t think twice about taking money out of our bank account when we were in the early stages of our debt management plan (this meant I had to buy food for the family one particular month on my credit card).

In fact as per this post, it turns out that one of our creditors mis-sold us PPI which means that we were paying extra payments unbeknown to us on top of the loan amount. If we hadn’t had the PPI, we might not have ended up in quite as big a mess as we did.

This is a chance for us to really help ourselves get rid of some of our debt so I hope you can understand why I want to negotiate some full and final settlements when we get this PPI refund through. I don’t know at this stage what I can expect from this sort of negotiation but I’ll be reporting back the details as and when. At the very least, our debt total figure should be dropping more noticeably over the next couple of months.

On that bombshell (I’m still reeling from it), I hope you all have a lovely weekend and I’ll be back on Monday! 🙂

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Huge thanks to Messy Money for including my post about Secret Debt and The Emotional Stages of Debt: Passion in the Carnival of Financial Camaraderie last week. Also a big thanks to Project Ikonz who mentioned my post Five Practical Steps Towards a Debt Free Life. If anyone else mentioned me, please let me know so that I can thank you!

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Image © A Disease Called Debt