facing up to debt for the first time & need a hand holding

forgetfulelephant

Hi

Im facing up to the fact Im getting worse and worse into debt and its got to the point I cant afford to repay the monthly min payments.

Ive got two small children and have just put myself through a degree - my partner works and has a good job but we have no disposable income and rather stupidly, I have been living off of a credit card / over draft etc rather than actual money.

What do I do?

Ive written a list of all the people / companies I owe money to... do I phone them / write to them?

Any tips or pointers would be fab

also, debts to councils for over payment of benefits in the past, and over payments of tax credits - how do I deal with these?

I dont have a job, or claim benefits - we dont receieve any help with child care from family or working tax credit, Im hopefully starting an evening job next week which will help me earn some thing

help

Foggster

Hi there
First things first.
Have a read of this https://forums.moneysavingexpert.com/discussion/107280 then do your SOA and post it back on this thread.

There are some wonderfully wise people here who will be only too willing to help you and advise you all along the "road to recovery".

xxxxxx

irnbru74

Hi,
I was in a similar postion with credit cards a few years ago and this is what I done - I started by working out what money I had incoming and then outgoing money - (all companies ask this)
and then worked out what mimimum payment I could make to each debt.
I phoned them and to be fair most of the were understanding and helpful. It was the best thing I every done, because instead of worrying every month, I knew that I was making a regular payment (however small) and wouldn't have to dodge phonecalls etc
some companies froze interest/reduced interest and accepted a nomimal payment which was reviewed every 6 months.
I am now in a much better position financially and am back to making regular mimimum payments and off arrangements, I know that my credit rating is poor, because of the arrangements I was put on, but hopefully that will slowly improve. This site is great and hopefully someone more knowledgable than me will come along to assist you. Just wanted to tell you what I done and let you know you are not the only one in this postion.

Little_Miss_Uni-Debt

Hi,

Well done on starting to look at your debts. You've done the first step, with writing down who you owe to. Next, are your debts years old or recent and reasonably up to date?

I'd get accurate balances and interest rates for all your debts that you can. Be careful with contacting companies that haven't heard off you for a while, especially debt collection agencies or companies that have stopped chasing you for old debts, this may give them cause to start calling/writing to you. You can hold off contacting these just yet until you've investigated the situation further.

Get all the info you can find. Go to this site http://www.makesenseofcards.com/soacalc.html enter in your incomings and outgoings and post the results up here.

We can then see what your situation is and those with similar experiences can offer advice.

Keep us updated!

forgetfulelephant

ive phoned the people, including tax credits, im waiting to hear back from people but i owe about 10k

my only income is child benefit (for two children)

I currently dont work - but have got a job two evenings a week which will give me about £50 to live on, including

insurance car £53
insurance house £11.33
BT £33.74
Moorcroft debt recovery £10 (16 payments left)
Vodafone £44
HMRC £20 (over payment of tax credits)

forgetfulelephant

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 200
Partners monthly income after tax....... 0
Benefits................................ 134
Other income............................ 0
Total monthly income.................... 334

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 33.74
Mobile phone............................ 45
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 160
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 0
Car Insurance........................... 53.15
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 15
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 11.55
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 438.44


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 4000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
barclaycard....................4000......10........0
student account................2000......0.........0
next account...................355.......140.......0
Council........................3000......20........0
Moorcroft PLC..................160.......10........0
HMRC...........................3025.39...20........0
Total unsecured debts..........12540.39..200.......-


Monthly Budget Summary
Total monthly income.................... 334
Expenses (including HP & secured debts). 438.44
Available for debt repayments........... -104.44
Monthly UNsecured debt repayments....... 200
Amount short for making debt repayments. -304.44

Personal Balance Sheet Summary
Total assets (things you own)........... 4,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,540.39
Net Assets.............................. -8,540.39

Tixy

Have you so far been able to keep up with repayments?

Sounds like you need to work out a budget and then see what is left to make offers to your unsecured creditors.
First you are going to need a new bank account with a bank you don't currently owe any money to and get any income/benefits/wages from new job being paid into that.

Do you and partner have joint financial products/ bank accounts etc? do you own or rent?

forgetfulelephant

Trixie, to be honest - no I havent but while I was a student and getting studnet loans etc I was paying bits off and had some sort of income.

Now im just sinking

I have an old bank acount with HSBC I could use, its got about 43p in it...

shall I phone child benefit people and move that into my HSBC account then?

Tixy

What is the money owed to the council for? Have they agreed to just the £20 payment? Whilst you have priority debts such as the council you should really only offer token payments to your consumer credit debts.

Its always best to write to your creditors rather than do things by phone. Once you have your income safe and not going into the account with the overdraft I would suggest sending this holding letter offering token payments for this month - http://forums.moneysavingexpert.com/showpost.php?p=21937969&postcount=51

Then I'd probably get some advice from one of the debt charities on a way forward, as unless you can get some income coming in, or partner can afford to support you more then you are not even going to be able to afford the basics like groceries etc.

Is partner aware of the debts? do you keep your finances seperate? could he take over payment of some of the items you pay for in the shortterm? Is a car essential? could you sell and get £4k towards your debts/living costs and save yourself the ongoing running costs?

dancingfairy

You can't possibly pay even the essentials on what you have coming in - you need to check urgently whether you are entitled to benefits - you must be enetitled to something? surely?
If not then your husband will need to support you more and pay more of the household essentials - even if it means he has to come to some sort of arrangements with his creditors as well.
You are going to need to pull together on this one as the benefits agency will see you as a family unit and will expect your other half to contribute.
Does your partner know just how hard things are for you right now? Hopefully he won't need to support you too much for too long and with time you will get a job and earn more of your own money.
Best of Luck
df

forgetfulelephant

Ive opened a new account with another bank - will have my card within a week.

I will phone Child Benefit and get them to pay into that
Also CSA (if i ever get any from them but thats another story entirely!!)

I will show my partner this - he pays for the majority of things to be fair, rent / bills etc