Sheffield mum pays off £15,000 in credit card debt through content creation

The Star, Sheffield

Single Sheffield mum, Alex Wren, 25, has shared how she paid off £15,000 in credit card debt by creating social media content about her council flat renovations.

Transcript

00:00At 22 I was in over £10,000 worth of debt, essentially made me bankrupt and the only

00:04option I felt like I had was to take out an IVA. So let me tell you what this is and whether I

00:08regret that decision or not. So at the end of 2022 I was nine months pregnant, had all these

00:13debts whether it was from credit or from loans and I was about to go on maternity leave earning

00:17about £600 a month and I knew I couldn't afford to keep paying these minimum monthly payments and

00:22bring a child into this world and this is where I found myself getting into an IVA. So if you get

00:26accepted for an IVA they look at your income and they decide how much that you can pay per month.

00:31So it essentially wipes off all the other debts and you just pay this monthly sum for five years.

00:35When you open the IVA all these debts that you put into it, all those going to default and obviously

00:39defaults stay on your credit score for six years as well as IVAs. Every year they do an annual review

00:44so if your income goes up you have to pay more. As soon as I signed that and this had got sorted it

00:49gave me peace of mind and for almost two years that was perfect for me. But then my income quite

00:53suddenly changed and I realised that it's better for me to just pay off the full thing because they

00:57were going to drastically up my payments else. With an IVA you can't take out new credit or like

01:01car finance, things like that unless you have permission and an IVA tanks your credit score.

01:06Despite the fact that I paid it off 20 months in it will still remain on my credit score for a total

01:10of six years which is the reason that I do regret it. It was the best decision for me at the time.

01:14If I could have predicted the future I wish I could have just held out for that extra year or so

01:19because it would have meant that I'd have been able to get a mortgage a lot sooner than what I am able to do

01:23now. If I want to get a good rate mortgage I'm going to have to wait until at least 2029.

01:27Debt should be talked about, debt shouldn't be a taboo subject. Many of us have it and so many of

01:31us have a bad credit score and I know a lot of us feel ashamed and embarrassed about it because

01:34that's exactly how I felt. If you are in this kind of situation you don't know what to do you want to

01:38learn more about these type of things that are step change and citizen's advice that can give you

01:42great advice on it. If you have any questions about IVAs or anything like that please let me know.

01:45You've took one out before, was it the best decision you made or do you wish you had more information?

01:49I was in 15k worth of debt at 21 and I worked super hard to get out of it only to be back in

01:55debt again. So let me tell you about it. Back in January 2022 I was in debt and I didn't feel like

01:59there was a way out because I just had a baby and I just didn't have enough money coming in to pay it

02:03off. So I took out an IVA and was paying £100 a month and that was meant to be for five years.

02:08But a year ago now my circumstances suddenly changed quite drastically and I was able to pay that IVA

02:13off in full and the moment that I paid that off I thought to myself I will never ever be in debt

02:17again. So the fact that I'm suddenly paying £6,000 off again is a bit of a shock and I want you to

02:22tell me if you think these are my fault or not. Part of this amount is a British gas bill and the

02:26majority of this bill was already in the IVA but part of it wasn't allowed to be just because of

02:31the date. So it's meant I've been paying that off monthly but that does come to an end in August.

02:35And then the bulk of this amount is DWP and essentially over a year ago now I became self-employed and I

02:40essentially didn't understand that every money that comes into this business account was my money to

02:44declare. Because at the time I was still on Universal Credit and when I got started out it was really

02:48fluctuating. So I paid myself a wage and then Universal Credit was topping it up and this was

02:52going on for like five months. And when I was finally earning a stable amount of money I closed my claim

02:56and got hit with a five grand bill. I am currently paying this off monthly because it's not making a

03:01big difference in my monthly finances. I don't know whether I should just bite the bullet and pay it

03:05all off in full. Let me know what you would do and let me know if you've ever been in a situation

03:08similar where you got out of debt and then unexpectedly ended back in it.

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