Can anyone offer any suggestions?

matthewking26

Hi, I am in the process of amicably splitting from my partner and moving into a house on my own. All my expenses will thus multiply and I’m not sure what to do about the following.

It will cost £1225 to move into the new house, 550 rent, 550 deposit and 125 agency fees

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Income pm after tax, pension, student loan repayment, N.I contributions
1150

Outgoings pm
550 rent
100 council tax
50 housing benefit overpayment, £1800 owing
196 loan 1 – 4125 owing, was 9400 originally
130 loan 2 – 3500 owing, was 6750 originally
50 credit card 6.3% life of balance, owing 2463 – limit £3240
25 credit card 2, 0% until next month, owing 2608, limit £2800
10 mobile and broadband contract, tied in until October
10 landline
125 childcare
10 - petrol
25 - food, nappies etc
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1281 Outgoings total before food, petrol etc

My car insurance will be £225 due in March (cheapest available) or £23pm (270 for the year)
I am £600 into a £1500 overdraft in one current account
I am £100 into a £700 overdraft in my main current account
I have two other credit cards with 0 balances
A tesco card with a £2500 limit I've had for 1 year and 6 months
An alliance and Leicester mbna card with a £2500 limit i've just got last month

I have two sets of questions.
1 – given that I have no choice but to increase my debt each month to survive, how can I do this as little as possible until the loans are paid off in two years and then hopefully can chip away at the credit cards?
Should I gradually spend on the credit cards? Should I cancel the two I’m not using, knowing I may need them as time goes on to survive.
Alliance and Leicester won’t do a balance transfer from Virgin as they are both MBNA cards so the standard APR will kick in next month.

How do I best pay for the house move and car insurance? I need the car due to location of workplace and childminder.
Should I just stop paying the loans? Try to extend the terms? Ask the banks to accept reduced payments? Will each of those options be as bad for my credit rating?
Should I keep paying into the pension, knowing that is £100 a month I could really use but knowing it would cause bigger hardship later on in life?

How in the name of blinking flip do I survive? I have a 15 month old son who will be spending 50% of his time with me. My ex will have her half of childcare costs covered by child benefit and child tax credit as she has been a low earner (£3000 a year compared to my £18,000), the costs of her having time off on sick leave with mental health problems has lead to the current situation. (She was not earning enough to pay N.I and therefore wasn’t entitled to sick pay.) but it was my debt that was increasing. Before that I had got £21,000 debt down to £14,000.
I am earning too much to get tax credits on my own or housing benefit but will get 25% council tax discount (down from £125pm).
I applied for a loan with A+L today to consolidate the two loans into one (£8300 over 5 years, 167pm, total 9300 of interest at 8%) but I’m not optimistic about being accepted due to commitments and having two credit cards unused.
I suffer from Asperger’s syndrome and am in the process of applying for DLA related to this, but again am not optimistic of being accepted.
Any help would be appreciated as this is making me sick with worry, especially for my son who I don't want it to affect. I can't really see a way out of this one. Sleepless nights aren't just being caused by him at the moment!

ragstoricheswannabe

hiya, im not going to be much help but could you not ring the tesco cards and ask for a good deal to transfer balances to them?? some will give low interest rates for the life of the balance............

there is a website that you put all your details into and will tell you what you are entitled too, not sure of the address but its on here somewhere if you do a search.

good luck, more peeps should be along soon with better advice than me....
love rags
xxxxxxxx

beanielou

Hi there.
I really think you need to check out your situation with one of the debt charities.I dont really think its an option for you to just keep increasing your debt every month.

matthewking26

I rang up Tesco and asked if they had any offers to persuade me to keep the card. They offered to reduce my APR on purchases from 16.9% to 7.9% for six months.
Barclaycard offered to do 0% balance transfers until Nov 09.
So I have done the following:
Moved 2470 from Barclaycard to A+L (0% until Feb 2010)
Once processed I’ll move the virgin debt to Barclaycard (0% until Nov 09)
Then I’ll have Tesco card at 7.9% for six months for emergencies
Also Virgin card with zero balance, can either cancel or see if they have any offers too.
HSBC have consolidated my loans, increasing length of debt but allowing me enough money each month to survive.
It will be £9230 over 5 years at 192 per month at 8.9%, total payable £11,547.
Their conditions were that I used part of it to pay off existing HSBC loan and part of it to clear HSBC overdraft then they’re removing the overdraft, and no chance of another overdraft or other borrowings from them for at least 6 months.
So each month now instead of two loan payments of 196 and 130, I’ll have 192 going out but for much longer.
So income each month will still be 1150

Outgoings will be
550 rent
100 council tax
50 housing benefit overpayment, £1800 owing
192 loan
50 credit card 1
25 credit card 2
10 mobile and broadband contract, tied in until October
10 landline
125 childcare
23 – car insurance
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1135 Outgoings total before food, nappies, petrol etc

So I’ll still have a deficit each month, but that can hopefully very slowly build up on the credit card whilst the loans and other credit cards are paid off.
Thanks for the suggestion to contact the tesco card.
Anyone have any other suggestions?
I’m earning too much to get tax credits.

Also I contacted CCCS and the debt helpline.
CCCS suggested defaulting on the loans then negotiating reduced payments.
The debt helpline sent an automated reply saying they aim to to be in touch within 7 days. but are very busy.

matthewking26

And rather bizarrely according to entitledto.co.uk
I'm entitled to nothing.
My ex, earning £4800 a year will be entitled to:
4067 tax credits
1460 council tax benefit
6882 housing benefit
960 child benefit

Total per year £13369

So with benefits per year her income will be the same as mine
Should I consider quitting and taking a low pay job to be in the same financial position?

RAS

Why are you paying childcare and nappies?

really you cann0t go on like this. You need to talk to one of the debt charites urgently. http://www.moneysavingexpert.com/loans/debt-help-plan#help

sparklymessygirl

What type of accommodation are you renting? I'm thinking that £550 is a bit steep for a single person? Could you rent in a cheaper area/ smaller place?
Get a lodger?
Sparkly

horsechestnut

Can your ex get Gov. help with childcare? This would be a help to you.
Look on this site for ways to up your income and money saving tips to make what you have go further.
Do you have any loyalty cards? Tesco, Nectar, Boots etc.
I use my Tesco points to buy my R.A.C. Breakdown cover for my car. Other people use their points to buy Christmas/Birthday presents.