Happy New Year!

My last post to this blog was almost 18 months ago...I am now DEBT FREE!!!!

How did that happen?...

My ex-wife and her partner of a few years decided the time had come to move in together.  There was talk of them moving into our house but understandably it proved to be too small for all of them along with his children and so they decided the best thing to do would be to sell the house and rent together.  My guess is that they either didn't want to commit to buying a house together or the cost of a property that would be large enough was out of their budget.

For anyone who finds themselves in a similar situation, you have my sympathy!

Put bluntly, any couple going through a divorce will find they have zero help from anyone in helping them agree on the split of assets and debt.

If you are unable to agree on terms between you then the only way forwards is to go to court and let a judge decide.  However, and this is the kicker, a judge will not entertain this until you have gone through  mediation...which cost money.

Having done some googling, I realised that most mediation sessions will cost around £150 and it's generally agreed that most couples will need "multiple sessions".  This can run up a few hundred pounds worth of bills quite quickly and while not a lot, if you have zero disposable income to spend on this, it's a non-starter.  Also, it's mediation - they won't tell you what is fair, they will try and get you to see the other person's point of view but they have no powers to make any decisions.

For my part, I found the internet a huge resource of information and help.

I managed to find out that basically there is no template that a judge will use to determine who gets what or how assets or debt are divided.  They will look at each party and the situation with the children.  They will take into account income and expenditure along with potential future earnings...when I start reading things that are very abstract like this, I know it's going to end up being a long, drawn-out process.

In the end, I agree with my ex-wife that the house would be sold and the mortgage and joint debt paid up.  Any proceeds would be split 70/30 in her favour.

Did I think this was fair?  No.  Did I think I was entitled to more than her?  No.  Did I think I was entitled to half then?  Yeah, I kind of did.  Why?  Well from my point of view I had always been the "bread winner" and my income had been our main income.  My ex-wife had always held part-time jobs with hours fitted around our children.  So while I provided the finances (I'd say 85% of our income was my salary) she provided the parental care - it's how a lot of families operate.  I don't believe that this entitled me to 85% of the house, but I don't believe it should only have afforded me 30%.

There was also the debt.  We had at one point in time approximately £60k worth of debt.  Because of my earnings I was obviously able to secure more lending than she was.  As a result, the majority of the debt was in my name.  This debt hadn't been accumulated on lavish holidays or expensive cars - to be fair, a large chunk of it had been spent on renovations of the house...a driveway, a new bathroom, a new kitchen, a conservatory and flooring for example.  There had also been the cost of paying for cars.  We never had a car that was younger than 8 years old.  Most of our cars were purchased for under £1500 and quite a few were much cheaper and turned into money pits!

So why in the world did I agree to a 70/30 split???...

Put bluntly I know what my ex-wife is like.  She's a lovely person and doesn't have a malicious bone in her body but she's a worrier and has absolutely no head for figures.  When you take this into account I realised she was insisting on 70% not to get at me, but because she was worried about her finances and how giving up the security of a home to move in with her partner would pan out.  Granted it was their decision, but I had been suggesting she sell the house for years - pointing out that the cost of the mortgage was crippling both of us and not allowing us to pay off our debts etc.

I saw this as a good opportunity for both of use to be debt free.  I knew that since we had separated we had both struggled financially and life was passing by, kids were getting older and the idea of being in debt for another 10 years each was horrible...and it was likely going to be longer than that if you add on the costs that come with being parents.

So, the situation was we either don't agree and go to mediation which neither of us could afford or we try to reach agreement so that we could both move on with our lives.  I knew she wouldn't budge below 70% through her own fears and I figured that at least if I got 30%, it would be enough to pay off my debts and leave me with a few thousand left.

So the house sold, I paid up my debts and treated my kids to some new clothes and a few lavish meals out which is something I had never been able to do.  I bought a few things for myself that I had wanted over the years but was never in a position to purchase.  In the end, my ex-wife ended up with around £10k more than she was expecting....say what!?  Well, remember I said she had no head for finances, well it turns out that despite me explaining how the sale of the house would pay off the mortgage and joint debts, she still assumed she would have to pay her half of the joint debt.  So perhaps if she was better with money and facts and figures she would have realised she didn't actually need 70%  :(

Am I bitter?  Slightly, yes.  However, it was my choice to agree to the 70/30 split and I am now debt free and I've loved that - Not having to check my bank balance before I put petrol in the car, or having to workout how to feed myself and my 3 kids for a weekend on only £8.50 (been there numerous times!)

In terms of paying off my actual debts, I had a choice.  I could just pay up the full amount owed or try and negotiate a reduced amount.  Now, if you have an account that hasn't defaulted then I would suggest paying up the full amount - this will go a long way to repairing your credit score!  But what if you already have defaults?  This point get's interesting.  Basically, when an account is defaulted it can only stay on your credit fiel for 6 years.  So I looked up my credit score via Noddle.co.uk and discovered that 2 of my creditors had defaulted my account over 3 years ago.  So even if I paid them in full, I would still have a rubbish credit score because of this.  If I made a reduced "full and final" payment then it would show on my account as being "settled" BUT with an outstanding amount.  Either way, it wouldn't affect my score as the accounts were already in default - so that's what I did.  I managed to reduce 2 of the payments after phoning them up.  I think I saved myself around £800.

So I've now been debt free for around 3 months.  My credit score has risen albeit only slightly and I'm still considered to have a poor score but this is purely down to the 2 defaults I have on my file.  These will both expire in approximately 2.5 years at which point I should have a nice healthy credit score again.

So what about the future?  Well, Unfortunately I can't see that I'll ever be in a position to get back onto the house ladder, but then a lot of people have never been a home owner.  I now have much more money each month, which means I can take my kids out, treat them to more and have a much, much better life myself.

I could hold on to my bitterness about the way the split worked out but at the end of the day, I like to believe in Karma.  I did what I did for the right reasons and money isn't everything.