Not sure what to do?

lost_mum

Hi I am after some help and was wondering if some of you lovely people could help me. I got into a bit of debt through no fault but my own spending too much then I just stopped paying when things got too much stupid yes I know. I moved about 3 years ago without telling the people I owed money too where I went so as you can imagine last year they 'found' me so have been paying back my debt with them my total debt is just over £10,000 some of that is the overdraft that we are always in.
Now here is my problem my DH got a letter from a debt on friday of £5000 he also has another debt of at least £6000 they havent contacted us yet but that is what it was at 3 years ago,so in total we owe at best guess £21,000.

This is where I could do with your help the 1st thing on friday I did was contact cccs to go through a budget and what we can afford to pay back and where to cut back at the moment we arent working and there is also 4 children when we went through ours money it was worked out we could pay back £185 a month at the moment (we also owe water so that is an extra £50 on top that will take 2 years to pay back) so now I dont know what to do that will take just over 9 years to pay back the person on the phone said we are at the point of the cut off with a D.M.P plan working and going bankrupt.

Its just starting to really get me down its not like we have holidays drive or a designer clothes I just feel like such a failure and a bad mum things are braking and need replacing and just dont know where the money will come from we also need to look into moving but again this costs.

If you got this far thanks so to my questions are
1. do we contact the debt that hasnt found us so we know where we stand with everything we owe.
2.Do we do a D.M.P for the full time,go bankrupt or stay with the D.m.P for 6 months then asses again for the way to go.

Thank you for any words of help

SlopingBird

lost_mum, I afraid I can't offer any financial advice, but I just wanted to say, please don't despair. Lots of us have been there and come out the other side. Children are expensive, life throws unexpected expenses at us just when we least need them and worse, when we take our eye off the ball, the interest starts piling up on those debts. You are not a bad mum because you are struggling to make ends meet - if that was the case, we'd all be bad mums. My advice is don't run, get the best financial advice you can - and it sounds like you are already taking the right steps - and follow all the money-saving advice that's available on this site. If it's any consolation, ten years ago I had a house repossessed (ex lived there, changed locks, refused to co-operate with sales, etc and after 18 months our mortgage company finally lost patience and repossessed. At the time, I thought it was the end of the world but I continued to work hard, paid off an agreed % of the outstanding amount and gradually built up my credit rating again. Eventually I took out another mortgage and now I own about 50% of my home. It takes time but you can take control and rebuild your financial security, honestly. Take care, won't you - and stop blaming yourself. SlopingBird.

dancingfairy

Hi - what's the situation with the house? do you own or are you renting? what are you planning to do? This may well figure in your decision to go bankrupt or not.
You may want to pop your SOA (budget) up here so people can give you some suggestions. Do you feel like the amount CCCS have suggested each month is realistic for you? Don't forget things will change over 9 years - you may be paying out for childcare right now, wages will hopefully go up but on the other hand so will rents/mortgages so you may be able to reduce the term of a dmp.
I think all you can really do is research the pros and ocns of each options and then choose what you think is best.
df

bottleofred

Hi lost_mum,

You could post your statement of affairs to get help and advice on how you can save money, which can then go towards the debts. http://www.makesenseofcards.com/soacalc.html
Going Bankrupt may well affect your housing status if you own your own property, so get good advice before doing that. I think you will have to pay to go Bankrupt too, as the companies won't make you Bankrupt when there is a chance they might get some money back.

Good luck

Red

lost_mum

Thank you all for your reply at the moment we are in private rented house but we are wanting to move out of this house for a number of reasons 1st there seems to be more and more going wrong with it 2 windows in the front room wont open 1 of which they wont fix as they need to replace the whole window!!! there are other smaller things going wrong too also when we 1st moved in here it was an estate agent with lots of other properties and other bits now he has this house and another(the other looks worse that here)

I will post my SOA we get paid a lot either weekly,fornightly or every 4 weeks will use they x4.3 to make monthly.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 4
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 1851
Other income............................ 0
Total monthly income.................... 1851

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 65 we are on a meter for both
Gas..................................... 65
Oil..................................... 0
Water rates............................. 83 includes £50 to pay debts
Telephone (land line)................... 0
Mobile phone............................ 48 thats for 3 mobiles
TV Licence.............................. 12
Satellite/Cable TV...................... 100
Internet Services....................... 0
Groceries etc. ......................... 520
Clothing................................ 150
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 44 we dont drive but need to be able to get to appoints we walk most places
Childcare/nursery....................... 0
Other child related expenses............ 44
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 30
Total monthly expenses.................. 1801


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
apex...........................5000......110.......0
mbna...........................2000......24........0
argos..........................1000......30........0
sky............................5000......0.........0 we havent contacted them yet
baraclys.......................6000......0.........0 this is a guess they havent found us
cat............................500.......22........0
Total unsecured debts..........19500.....186.......-


Monthly Budget Summary
Total monthly income.................... 1,851
Expenses (including HP & secured debts). 1,801
Available for debt repayments........... 50
Monthly UNsecured debt repayments....... 186
Amount short for making debt repayments. -136

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,500
Net Assets.............................. -19,500

Lemon_Tree

hi and welcome to the world of MSE.
Only a couple of things i would point out are: cut down on your satalite/cable tV. We have sky with broadband and phone lines and it's cheaper than what you pay. Often if you ring up threatening to cancel your packages etc they'll offer you a deal for a period of time.
The other things are, you're going to have to cut down your clothing budget a lot, i know you have 4 children but £150 a month is a lot of money. My sister also has 4 children and she doesn't spend half as much as this when she includes shoes and hers are growing like weeds constantly.
Finally you could probably reduce your food bill, you're best of doing this gradually but once again you could easily cut down £100 a month just by being careful or testing out lower brands. You will be able to clear your debts, especially if you stick around here. Good luck.

These measures will help you get to a starting position where you at least have enough money coming in to pay your outgoings. I'm sure there will be more people along who will be able to help you as well.

Culex

As you do not own your house, nor own a motor car, nor apparently any other assets, it might be best to go for bankruptcy.

snookey

Hi do you need three mobiles Maybe just have one for emergencys. Also try buying clothing second hand, great deals on ebay. I buy almost all my daughters second hand and lots of them are hardly worn. Have you tried selling on ebay Im sure with four children you would have surplus toys and clothing. Try planning your meals and batch cooking so you have meals to hand. Look at the amount you spend on snacks and ready foods. Try ordering your shopping on line it means Im not tempted by other things , ie, Asda clothing always finds its way alongside the grocerys, lol.
See if you can find a mobile hairdresser who can do all the family haircuts, usually a lot cheaper. If the kids dont like cheaper brands , keep the original packets and fill them up and they wont know. Try moneysupermarket Iv found it really usefull. It even shows you how you can save more money on your shopping by swapping items. Look on freecycle before buying something as you may be in luck.

GeorgieFTB

lost_mum wrote: »

Thank you all for your reply at the moment we are in private rented house but we are wanting to move out of this house for a number of reasons 1st there seems to be more and more going wrong with it 2 windows in the front room wont open 1 of which they wont fix as they need to replace the whole window!!! there are other smaller things going wrong too also when we 1st moved in here it was an estate agent with lots of other properties and other bits now he has this house and another(the other looks worse that here)

I will post my SOA we get paid a lot either weekly,fornightly or every 4 weeks will use they x4.3 to make monthly.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 4
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 0 - anyway to up this, mistory shopping, survey sites, see the up your income board, avon/betterware etc
Partners monthly income after tax....... 0 - see above
Benefits................................ 1851
Other income............................ 0
Total monthly income.................... 1851

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 65 we are on a meter for both - if you have no arrears it might be worth looking at your standing charges/whether you are paying off someone elses debt - sounds silly but this happened to me they had to change the settings
Gas..................................... 65 - ditto
Oil..................................... 0
Water rates............................. 83 includes £50 to pay debts
Telephone (land line)................... 0
Mobile phone............................ 48 thats for 3 mobiles - this needs to be cut down, see if you can drop tarriffs if still in contract
TV Licence.............................. 12
Satellite/Cable TV...................... 100 - this needs to go! how much do you actually watch?
Internet Services....................... 0
Groceries etc. ......................... 520 - you can cut this down, batch cook, meal plan, drop brands, look at the old style board for ideas, what they don't know about cooking an a budget is not worth knowing!
Clothing................................ 150 - this needs to be cut down, unless the kids are growing at a foot a month they will just have to get used to 3/4 length trews:D
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 44 we dont drive but need to be able to get to appoints we walk most places - is this the cheapest you can do this? Are there weekly tickets etc that would work out cheaper?
Childcare/nursery....................... 0
Other child related expenses............ 44 - what is this can can it be cut down?
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 60 - this will probably need to be cut, agree with everyone that only the kids are bought for, look for presents during the year...
Haircuts................................ 30 - if you have boys invest in a pair of clippers and DIY, go longer between cuts, go to the local college
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 30 - do you really save this? you have no cash listed as an emergency fund, its a good idea though
Total monthly expenses.................. 1801


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
apex...........................5000......110.......0
mbna...........................2000......24........0
argos..........................1000......30........0
sky............................5000......0.........0 we havent contacted them yet - if you are going into a dmp or bankrupsey then you will need to get in contact
baraclys.......................6000......0.........0 this is a guess they havent found us - ditto
cat............................500.......22........0
Total unsecured debts..........19500.....186.......-


Monthly Budget Summary
Total monthly income.................... 1,851
Expenses (including HP & secured debts). 1,801
Available for debt repayments........... 50
Monthly UNsecured debt repayments....... 186
Amount short for making debt repayments. -136

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,500
Net Assets.............................. -19,500

You can get your expenses down quite a bit which would give you more money to throw at your debts, depending on how old your kids are you might want to get them on board as they are going to feel some of the changes.

Before you go too far down a bankrupsy route you might want to look at moving as you might not be able to get another place after.

As you've already spoken to CCCS you should have a good idea which route is good for you, there are many on here that have managed to clear really large amounts of debt by being careful.

Gx

Hannah_10

I am sorry that I haven't got time to read the replies and the SOA I saw as I scrolled down, but I will say you should see Salt'n'Vinegar's first post "learn from my mistakes" with regard to being a bad mother/ bad person. He puts it so very well.

https://forums.moneysavingexpert.com/discussion/2673537

The other very quick thought I had was why was bankruptcy the only alternative option? If you whole income is currently from benefits you should be able to pay token £1 a month payments to all creditors (of which a quick glance at your SOA says you have 6, so £6 month then) until your situation improves.

My appologies to anyone who has already said the above.

lost_mum

Thank you all for your help
I realised that I never added my overdraft on there too which is now on the flat rate of £7.50 a month no matter what.

just a couple of pointers the mobiles are all in contract that is for 3 of them the older 2 have a mobile each and me and dh share as I was never using mine, I cant cut them down but have made sure that you can never go over the plan.

I joined the grocery challange a few weeks ago but I think I went in too low so will look at getting this down even just £10 a week and go from there.

The £44 is for childs pocket money for the months.

The public transport is the cheapest I can get we have a fair few things coming up that we have to get to that we just cant walk too.

The saving was for things that will need replacing soon,so we dont get into even more debt.

@Hannah_10 we were given the option with ccs of a debt managment which would take 9 years at least to pay off or bankruptcy we are on the edge of both being good to us. No one has ever mentioned about the token payments as we are on benefits I am not sure if its because we get J.S.A, tax credits and child benefit they just go through what we get and work out what we can pay