Where do I start?

Zebra

I'm trying to help a friend sort out her debt issues - she's finally admitted she's got a problem and seen the error of her ways ie buying things on credit because "everybody else does" :mad:

Things aren't as bad as for many on here but I could do with a few pointers.

I've paid off her utility bills for her - British Gas were threatening to disconnect her for £280 :mad:, and also a Nat West credit card bill for £370.

This leaves an Argos credit card for £1300 (currently at 0% but I'm not sure how long for - something we need to find out!).
Plus about £8,000 owed to Halifax (loan and overdraft).

She's cut up her credit cards - only a symbolic gesture I know but an important first step, and phoned Halifax to try and come to an arrangement - they were threatening her with a Debt Recovery Agency.

I've downloaded the Budget Planner so we'll have a go at that this week.

I've got a few other things on the to do list - switch utilities to diect debit, cancel Sky subsciption etc.

The main problem has been that her Income Support was wrongly stopped about 12 months ago (she is a single mother on Incapacity Benefit), and she ignored all the reminders, intending to pay them when the benefit was restored - which it now has been.

I also intend to buy her Martin's Money Diet book, but I wondered if there were any other things I could do to support and encourage her - she's not computer literate so I havn't pointed her to this site yet - something I hope to do once we've got a plan in place.

RAS

Hiya

Welcome to DFW.

What a friend - think there will be a few DFWs who wish they had a fairyzebra in their cupboard.

I will post up some more links in a minute but here are a few thoughts.

First make sure she has a basic bank account that is not associated with the halifax so her money does not get appropriated.

Secondly, the priorities are rent, CT and utilties. Credit cards etc can whistle if necessary. When she can pay, pay the most expensive debt first, but try to make a £1 per month contribution to them all.

She needs to see one of the debt charities, see here http://www.moneysavingexpert.com/loans/debt-help-plan#help for help with managing her debt and budgetting.

If she is not computer literate, she will be at a huge disadvantage when she wants to go into the job market. She does not need to have a machine these days as her local library will almost certainly have several and she can access them free of charge. So march her there and get her to sign up for the basic classes. My local does how to switch it on and use the mouse, basic e-mail, basic internet and basic documents (and photos).

Some ideas here http://www.moneysavingexpert.com/protect/make-money for ways of increasing your income. Apart from mystery shopping most do not affect your benefit entitlement.

Have a look at the Money Saving Oldstyle board for ways of living very cheaply.

And when you get her on-line, get her joined up to www.freecycle.org, like e-bay but she would get the goods for no cost.

Zebra

Thanks for the support RAS.

She does already have another bank account into which her benefits are paid. Once we have completed a budget planner I was thinking of setting up a standing order to pay an amount into the Halifax each month to pay the mortgage and the loan.

We'll settle the outstanding utility bills asap and then switch suppliers or change to monthly direct debit. I'm not sure what the current situation is with CT - I think she's entitled to a discount but not 100% sure.

I think now that we have turned the corner and her benefits have been reinstated, we can control the situation and don't necessarily need help from a debt charity.

She already has a pc and internet access which is used by her school-aged son, and hopefully I can encourage her to use it too.

Once we're on the road to recovery we'll have a look at other ways of saving / earning a bit of extra money.

MYLITTLESISTERLOLA

money diet book is fab, read it from cover to cover at least twice ( reminds me must dust it off for another refresh) would highly recommend it, she will learn things about companies that will make her hair stand on end, I know mine did. When I first read it I had worked in a bank for 6 years and thought I knew everything about credit but boy was I wrong !! Good Luck

Zebra

Thanks m-l-s-l I've just ordered it from Play.com so hopefully it will give her a bit of encouragement and one or two things to think about.