Untangling the mess

pamstretched

Due to debt crisis there are no clear lines between each other money.

I am currently putting Income & Expenditure together to get some help. We have been advised
One budget for everyone - but this is impossible

So I am doing individual budgets.

Q. If I have been contributing to the household due to a financial crisis i.e. I am not legally responsible does this money need to be in I&E.
I have done the budget but it keeps getting thrown back as the expenditure is much higher than the income. I cannot sustain the help indefinately so trying to establish self support.

Suggestions are possible housing benefit help and fuel charity help
I need to fill these forms in but feel I should omit my contributions

Please advise

Brighid

Hi

Who wants to see your income and expenditure and why? I imagine this is key to whose income you include (and also the share of expenses that is included)

For example - if its OH's credit card being chased, I'd say just OH's I&E are needed.

If its for your own use - include everything, and then post it here.

I don't know for sure, but I know others will know if you can give all the facts.

Brighid

pamstretched

The I & E are for a number of purposes but in th main it is to try to get some calm into the household, and hopefully running it without my financial contributions.

My mum feels its a case of getting more funds and has been advised to get help from the council (housing benefit), Gas Charity (clear a large bill) and pension credit.

I think she is rich compared to other pensioners - on paper. She has never received benefits or help and I am certain she won't be getting any but she insists (via her friends and my siblings) that we should at least try as most of her friends get these benefits.

I see a healthy income but she is left without shopping money because of very high debt payments which we have been harrassed into paying. eg. she was paying £380 per month for a bank loan

This weeks' Requests The court, a Gas Charity, Debtors, and The Council. I would be concerned about them not being the same

The responses should be her income only but not sure if family help should be included as it then might be set in stone as her income if not she could be accused of hiding income

pamstretched

Rough estimate

Income £1,300 per month
Expenditure £ £1824

This is cutting everthing to the bone

theoretica

If you don't live with her then I don't think any contributions from family should be included. These are gifts and so should not be relied upon.

dancingfairy

Hi - you need to sit down with her (if you can) and get her to do a thorough budget - she needs to include everything - bus tickets, christmas presents, anything she pays for yearly - everything and I mean everything. Once she has done that she can see where to go from there.
There is a very useful budget planner called an SOA at makesenseofcards which I will post the link for in a minute to account for everything.
Edit: Link here:
http://www.makesenseofcards.com/soacalc.html
Then it's a case of prioritising:
1) everything to maintain a roof over her head and regular bills - this includes rent/mortgage, gas/electric, council tax, clothes and food - no debts in this bit.
2) any priority debts - these include gas/electric/water - mortgage arrears and council tax arrears.
3) any unsecured debts - things like credit cards (unless they have CCJ's on them in which case they come under no.2), unsecured personal loans, catalogue debts etc.

She must pay 1 first, then 2 - if there is anything left she can pay things in cateogry 3.
I would suggest that you get her to do this and then get in touch with CCCS or National Debtline or her local CAB to talk through the options.
I would not include your income as this is a gift and is only temporary. She may or may not be entitled to benefits - as you have realised some are means tested and it is irrelevant how she actually spends her money for these I believe as it is done on income.
Depending on her circumstances - ie how much 'spare' she has after steps 1 and 2 above and whether she has any assets ie owns a house etc etc then there are many options that may be available to her.
A shortlist of possibilities include - a debt management plan (dmp) through one of the charities
An IVA
Bankruptcy
A DRO (mini bankruptcy)
Selling the house and downsizing etc

Whatever happens she should speak to a free impartial organisation and avoid anyone that advertises on the tv/papers to 'solve all your debt problems' etc. If for some reason she doesn't get on with one of the ones I've suggested then try another one as they sometimes give slightly differing advice. At the end of the day they can suggest what is best for her but she should make sure she understands all the implications of the options so you knows exactly what she is signing up for and the consequences.
You and she should not be presurised into paying things if she can't afford it - she may have to take a hit on her credit rating.
There is a website called entitled to which will give her an idea what benefits (if any) she is entitled to.
It may also help for her to think through why she is in this mess - not so everyone can have a go at her but hopefully so she can see what not to do in future.
I am sure if you feel able to share the budget planner (SOA) on here people will be able to give you more advice regarding which option(s) may be bet for her.

Best of Luck
df

jamesd

Family help isn't part of her income. She should be discussing this with one of the debt relief charities or her local CAB (probably best). One advantage of doing that is that it is standard practice to cease debt collection for at least a month when notification from a debt help charity that they are assisting someone is received and communications should then be made via the charity rather than directly. Creditors may not like this but she is in a position to insist. She could temporarily offer token payments of £1 to all unsecured creditors, if she can afford that, pending the advice of the debt charity.

The council might be reluctant but it's useful here for them to know that you are assisting her in sorting out her affairs and are working with her to get debt advice because that will show them that there's something changing and might encourage them to give time to get things sorted out.

She is correct that she should get her entitlement to benefits checked. It may be that she is not entitled and all that's needed is adjustment of debt repayments to an affordable level but there are plenty of mistakes made with benefits and getting it checked by say CAB is a good idea.

It seems that you're making progress getting things sorted out for her. It'll take more work but it looks as though it's heading in the right direction.