It IS possible to get out of £30,000 worth of debt. Step by step, here is how I paid off the credit card bills and giant overdraft I had racked up

Debt and January go together like gruel and the workhouse, and many of us are feeling the post-Christmas pinch.

But this year I’m almost in the clear. A bit of painless cutting back for a few weeks and I’ll be back on track. The fact is, I’ve learned my lesson, and I’m no longer in thousands of pounds of debt.

Some years ago, it was a different story.

I’d got into such a financial mess I was forced to sell my home – a five-bed Victorian semi in a lovely suburb of Manchester. As a self-employed writer, I’d made the mistake of not saving enough to pay my tax bill and relied on credit cards to get by when times were tough. 

When HMRC called in the full debt, I had the choice of going bankrupt or selling up, and since the former would mean zero chance of getting another mortgage or loan for at least six years, I chose the latter.

But in order to pay off the credit cards and the giant overdraft I’d accumulated – all in all, I owed north of £30,000 – I took several other steps. Here’s what I did to get out of debt entirely.

I thought long-term and consolidated the debt

If you owe money to several creditors, it’s sometimes possible to take out a loan with a more favourable interest rate to pay them all off. That’s what I did, via my bank – though various agencies offer the service. I then only had to pay back the bank, which agreed to manageable terms. Settling my bill with the taxman and getting the private companies off my back was a huge relief.

A consolidation loan can hurt your credit score in the short term, but long term, if you repay on time, it can improve your rating.

Painful but necessary: selling my house

Most of us don’t go as far as selling our homes – but as a last resort, it’s an option. It was obviously a wrench, but also a process that taught me the meaning of home: it’s not a particular house, but where your loved ones are. If you do sell up, you’ll need to move quickly. Repaint in neutral colours, declutter, and take advice from several estate agents, not just one.

Other assets are far easier to shift. Downsizing your car or selling off inherited jewellery is painful – but not nearly as agonising as the terror of being in debt.

Hit up your local charity shops 

Now given thecool rebrand of ‘thrifting’, back then wearing ‘charity shop clothes’ carried a certain amount of stigma. I didn’t care about that though. I’d always enjoyed a rummage, but now I stopped buying new clothes altogether and relied entirely on my local charity shops for outfits. I learned to love the treasure hunt, and found great satisfaction in washing, mending and de-bobbling to make my picks look brand new.

The big supermarket swap

Loyalty cards are good, but nothing beats a super cheap supermarket. I admit, I once turned my nose up at Farmfoods and Iceland – but frozen food works out a great deal cheaper than fresh, even if you factor in the electricity needed to preserve it. I’d buy my tins, teabags, condiments and frozen fish and veg at Farmfoods, and my fresh produce at Aldi or Lidl. No more Sainsbury’s for me – and I saved at least £30 a week, or more than £1,500 over a year.

Diving into my wardrobe – and eBay

Vinted didn’t exist when I was selling clothes, but eBay did. I sorted out all my coats, shoes and dresses, saved the ones I couldn’t bear to part with, and sold the rest. It didn’t make me a fortune, but it brought in a few hundred pounds when I really needed it. It helped that I had a habit of shopping in designer sales back then – people will pay a great deal more for a label.

Rustle up cash with a side hustle

I used to read tarot cards at university, and when I needed a bit of extra money to cover the bills I set up a Facebook page offering online readings. I had many enquiries, and earned well over £1,000. The downside was the long hours it took on top of my day job. If you need extra cash, however, think about the existing skills you have and whether you can leverage them to sell or teach online.

Getting creative with holidays and restaurants

Holidays were not an option for a while, and nor was eating out. To have fun, I came up with ‘Travels in our House’. Every couple of months, I’d spend up to £20 on creating a destination and accompanying food at home.

I made a Bedouin tent in the attic and we ate Middle Eastern food. Once, I bought a roulette set for £1 and took us to Vegas in the lounge (burgers and a tequila sunrise cocktail). We had the Orient Express in the hall, and 1950s Paris in the kitchen. With the right lighting, music and imagination, those evenings really felt like a trip somewhere else. And better still, I had the memories, not the bills, afterwards.