Young Couple with no income and small debt

ixworth

My son and his partner (and baby) have been strugglin along on his small income since they had their baby in January 2006. They were paying off debts my son racked up when 18 or 19 years old (about £6000), and now my son finds himself unemployed and unable to find anything in their meagre budget to spare for his creditors.

The two main creditors won't budge on their monthly demands even when presented with the financial facts; HSBC are being particularly vicious and applying unpaid DD charges and unauthorised overdraft charges left, right and centre.

The other creditor took my son to a court 200 miles away from where he/we live despite being in discussion with him at the time about possible repayments to prevent this. Also, although fully furnished with my the details of my son's finances this doesn't appear to have figured in the court ruling to repay the entire sum back immediately. This DR is now threatening to send bailiffs around even if he continues to make repayments as agreed because they want to increase the repayments. They haven't got much, a telly I bought him for Christmas and a cheap DVD player, and a 10y/o car I got him off of eBay and have subsidised as much as I can to keep it on the road and legal. We live in a village 10 miles from the nearest town where the job centre, job interviews, benefits interviews, hospital etc. are all located, and public transport is virtually non-existant so they really need independent transport.

They're terrified that bailiffs are going to bully their way in and take what little they have, sell it for peanuts and then come back in case they've replaced the telly.

My son has heard that even though he doesn't owe a lot of money, he could still declare himself bankrupt. He's been told it will only cost him £300 or so which I've promised to pay if necessary. He's been told that a receiver will be appointed but probably won't take their few possessions away including his old car (worth about £200) and that after a year he'll be debt-free.

Is it really the best way for him to go though? I'm not sure what else he can do as the creditors won't even listen to him. His credit history is stained already with the CCJ, and bank loan and store card defaults.

I'm filling this in for my son as he isn't too good with reading and writing (nor maths actually). I just wish I could help this young couple (and my beautiful grand-daughter) more but I have another child who is very quickly racking up debts with the approval of the government as she is starting university.

This seems like small beer after readig all these people owing tens of thousands of pounds but owing £5000 or so is still very worrying when you have no money at all.

Thanks

An SOA showing their situation...

Monthly Incomings:
Salaries £0.00
Benefits £825.00
Total £825.00

Monthly Outgoings:
Mortgage/Rent £250.00
Council Tax £120.00
Gas £20.00
Electric £20.00
Water £20.00
TV License £11.00
Phone £10.00
Food/Groceries £300.00
Car Insurance £50.00
Petrol £40.00
Storecard debt £25.00
Managed loan £80.00
Payment vs CCJ £22.00
Total: £968.00

lizzie12_2

Sorry to hear the situation your young son is in. Good of you to post for advice to help them out.
Cant help much in the way regarding the "Nasty Mob" calling as not been in that situation..... but there may be lots of people who will come forward later on.
We do a monthly shop for 3 and just getting it under £200.
I tend to do lots of mince dishes which I can freeze, lots of other ideas on the other boards - others may folow with the links for you.
Good Luck with all this. Perhaps lead your daughter to this site also for the tips.
Take care, this must be very draining for you, but am sure they will come through this....we did.x

wigginsmum

They're spending a humongous amount on groceries, I'm afraid. I spend £120/month for 2 adults and an occasional teenage stepdaughter. Could one of them read the OldStyle forum on here to learn how to cook economically from scratch? If they could knock £130 off their grocery bill and get it down to £170/month, they've got enough to pay the debts at the current rates.

beanielou

From what you say bankrupcy is certainly an option.
Why dont you contact CCCS/payplan/CAB to go over situation with them?
Food for 3 seems very high at £300 pm
Are they not entitled to housing/council tax benefit.They need to check this out
hth

Queen.Bess

Hi Ixworth (just down the road from me!), well done on posting on here and getting help and support for your son and his family!

I agree with the shopping budget, is it because jars of readymade baby food are being bought? I know babies need their 'mush' but the food can be homemade with a blender and then frozen in icecube trays and defrosted when required. Disposable nappies can be expensive, so maybe have a look into reusable ones? Suffolk has a Real Nappy Network which may be able to help and they do low cost loans to help buy the nappies (check out their website).

Another which might be reduced is the car insurance. Have you tried the comparison websites such as confused.com. There might be savings there, even if it's only £5 a month.

Keep checking out the other threads on this site for ideas to help! I wish you and your family well!

Murtle

Hello and Welcome to MSE

2 points.

1. Are they getting all the benefits they are entitled to? There is a website you can use to check this, http://www.entitledto.co.uk/

2. These areas are very high and could be cut back on.

Food/Groceries £300.00 - I spend less then this for 2 adults and 2 cats, and we both work full time, so don't have huge amounts of time to make all things from scratch
Car Insurance £50.00 - this is high as well, reduce it to the minimum possible.
Petrol £40.00 - what are they using this for? Do they NEED to be using it? Even for the period whilst your son is unemployed if they could save the money and use it pay off debts.

Good luck

M

oh yes and point 3 - there is information around on people claiming back unfair charges laid on by banks. Not an immediate help, but something that your son and you could look into completing to reclaim the money?

lil'H

hey and welcome, and can I say I am so impressed with your attitude, if only all parents could care so much about their children, it seems your really there to help without just bailing him out entirely so big up to you!:beer:

Echoing what others have said, make sure the benefits are up to the full amount they are entitled to, and groceries are certainly an area where money can be saved, it's about the only obvious one I have to say! Get all the advice you can, and make sure your son is really pushing to find whatever work he can. Even if it is only the odd bit, the first £20 he earns each week shouldn't effect their benefits and would help keep on top of things. I don't know much about bankrupcy but I'd say that perhaps as they are young and unlikely to be looking into mortgages etc for some time, hopefully they will be able to get themselves back on their feet by then.

Do keep us informed I'm really interested to see what happens for them

lil'H

bonnie_2

surely if on benifit, they would get their rent and council tax paid for them.

msmicawber

In addition to all the good advice above to reduce spending and hopefully increase income, I see that no one has advised contacting CCCS or Payplan. Please advise your son to contact one or the other of them tomorrow to assist.

joolz43

If all the debt is unsecured a bailiff cannot come and take anything away.

I think you and your son and his partner need some proper advice here, perhaps as previously mentioned ring the CCCS or payplan. I found CCCS really helpful.

ixworth

Thanks for the support and advice. I'm really looking for practical advice for them regarding the real-life affects of bankruptcy and how to handle debt in the interim (i.e. before they get to bankruptcy court). Also what happens during and after the actual bankruptcy.

Interesting point someone made about working without affecting rights to benefits. This always seems to confuse people and particularly in this case how would this affect any bankruptcy. There does seem to be a common view that going to work for minimum wage where you have to spend money to get to work etc. can leave you out of pocket compared with simply claiming benefits. My son wants to get back to work but would rather it be something that is likely to last (most of the jobs he's had recently simply disappear after a few months), lead somewhere, and not actually leave him financially worse off.

To answer a couple of your queries/points.

Their benefits figure includes their council tax and housing benefits.

The £300 pounds for food/groceries also includes non-food purchases and items for the baby (clothes etc.). Their regular weekly spend at Tescos is currently around 45-50 pounds with another £15-20 spent during the week on additional food and things the baby needs. They've only recently got into the situation they find themselves in but will undoubtedly tighten their belts as they learn how to.

The car is an essential as anyone living in a rural area today will testify. Without it they can't even get into town to see the CAB, JobCentre, Job Interviews etc. nor could they visit the supermarket and would instead have to spend even more money shopping in the village shops. The car insurance is high because my son also got himself done for driving under the influence when he was 18 and insurance companies take a dim view of this. The company he is with is Privilege who came up with an online quote over £1000 less than most of the other companies.

They are going to claim all the benefits they are entitled to, I will scour great sites such as this to see if there's anything that they haven't been told about.

I'm impressed btw by the report that you can live on £120/month for food/groceries. Even if that figure is meant to include food only that works out at a little under £28/week for two adults. £4/day for breakfast, lunch and dinner for two doesn't seem a lot but I suppose sausage/mash, spam+chips, spag bol etc. can all be made for a couple of quid or so, and lunches of omelettes, sandwiches, beans on toast etc. aren't going to come to much more than a pound or so. Just goes to show how much slack there probably is in the normal weekly shop; I feel guilty now thinking about how much I spend. Of course cleaning materials, things for the baby etc. will swell this bill but perhaps I'll take my son shopping with me and diplomatically educate him.

btw: It's evident that you do need to be careful when taking and giving advice on here. Bailiffs can definitely visit and remove goods for debts that aren't secured. My son has a CCJ against him that demanded immediate repayment of over £1000; as he hasn't paid this there could definitely be a visit and removal of goods.