It was terrifying to see the state of my finances written down in such a specific way: I owed more than £37,000 on four different credit cards, had a £37,000 loan and maxed out my £2,000 overdraft. In an article in the Guardian I explained how I had set up a social enterprise – and ended up £76,000 in debt.
A year on, it feels no less embarrassing and surreal. Despite a debt management plan which I started a year ago, I feel I’ve barely made a dent in the headline figures. Unless my fortunes change dramatically, like many others, I’m looking at over a decade living with debt.
I set up a social enterprise in my spare time as a journalist. Starting it cost me tens of thousands of pounds – which I didn’t anticipate – and I had to spend up to £500 more a month to run it. Named PressPad, it matches established journalists who have a spare room and live in a big city, such as London, with media interns who live outside that city.
Last year I raised £45,000 from crowdfunding. But the money had barely cleared into our bank account when Covid hit. As PressPad is a host-mentorship service – think Airbnb meets LinkedIn – and relies on young people being hosted in the homes of experienced professionals, it wasn’t possible to run it during the pandemic, completely undermining our business model.
So we changed direction – using a government grant – to provide an online support programme that reached more than 7,800 young people during the first three and a half months of lockdown. We built a website, so that when hosting is possible again, we will be more efficient.
But that was business. While PressPad was able to ramp up support because of the timing of a crucial grant, I was in a very different relationship with my personal finances.
Before I faced up to the severity of my situation, I knew nothing about debt repayment schemes. While it’s only a year ago, my memories of how I found the company I’m now signed up to, Debt Support Service, is hazy.
I was in such a panic I probably clicked on its website in the early hours of the morning, unable to sleep, constantly Googling for a way out.
It offered me the chance to declare bankruptcy, although that was not an option for me, and I forwarded its final written repayment proposal to my parents to check out. The benefits of the scheme are clear: you stop being dragged into further debt; most of the threatening and scary communications from banks and credit card providers are intercepted, and you’re given a dedicated individual you can talk to and be honest with about your repayment capabilities. You feel as if things “under control”.
On the downside, without any access to personal credit, you feel, like millions in this position, as if the day-to-day budgeting amounts to a tightrope exercise. You’re freed from the pressures of debt and yet simultaneously constrained by them.
The repayments, while intended to be manageable, provide slow progress. Every month, I pay…
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