Help please with best way forward

Em586

First time posting in here, though have lurked for a while and am a poster/lurker on the Old Style board.... we've had our 'lightbulb moment!'

basically we're in debt due to not managing things very well and 3 lots of maternity leave in 4 years. We cut back as much as we can, swap providers, look for deals, don't have 'extra' indulgences... but are now in a position of maternity leave ending and me having no work to go back to. Full time work wouldn't justify the childcare costs, and the time away from my children but finding part time (teaching) around here isn't easy right now. We made the decision to have all of our children close together for many reasons, but one was that we knew it would be a financial struggle for a few years, but then we'd be able to get back on track when they started school and I could find a job that would last.

I feel we could get on top of our finances if we could get out of the rut we're in- we're living off of our overdrafts, constantly getting charges, and only managing (just) the minimum payments on our 2 credit cards. After next week I'll no longer get maternity pay, and we won't manage to cover the debt and still have money to live on.

I'm just after some advice on where we should go from here. I did a rough SOA, but need to do a daily spend diary again as the past few months with birthdays, car problems and other bits and pieces have upped the spending more than we'd like. To summarise though, we both have overdrafts, and 2 credit cards which are both at the limit. We rent (private) and have no savings or assets other than the car which is maybe worth 1,500.

I've been on CCCS and the summary I've had from them is:
monthly income: 1,774
outgoings: 1,581
monthly contractual payments: 589
total unsecured debt (4 creditors): 16,510

what's left after household bills have been paid... £193

I guess what we need to know from people who've been there, is should we go with a DMP, which would mean shifting all income/benefit into our joint account (currently only used for bills) and then having CCCS allocate the £193 between the overdrafts and credit cards? Or would we be better off trying to do it all ourselves by contacting the card companies and banks about reduced payments/interest? We can't balance transfer as both cards are maxed, and we can't get new cards as both credit ratings not so good due to late payments when we've struggled to find the money for them.

To make things harder, we really need to move house- ours is too small, too unsuitable for our middle child who has a physical disability (though mild) and has a damp problem. We would be looking at around £100 more a month for rent though for the size/type of house we'd need.

Help!!!

fatbelly

Hi - it sounds like you will have to default on payments at some time but haven't yet. So now is the time to move if you're in the rented sector and will have to have a credit check.

When you're in the new situation, with less surplus income, that would be the time to look at things with a longer term view. However, you're already looking at maybe an 8-year plan, and surplus income will be going down!

I wonder if you were then to look at individual indebtedness and surplus income, whether you might meet the criteria for a DRO, for one or both of you (<15 k debt, surplus < 50 per month)?

Just noticed the car - would need to be valued at less than £1k but it might be, or might be soon, on Parkers guide, poor condition.

Em586

fatbelly wrote: »

Hi - it sounds like you will have to default on payments at some time but haven't yet. So now is the time to move if you're in the rented sector and will have to have a credit check.

When you're in the new situation, with less surplus income, that would be the time to look at things with a longer term view. However, you're already looking at maybe an 8-year plan, and surplus income will be going down!

I wonder if you were then to look at individual indebtedness and surplus income, whether you might meet the criteria for a DRO, for one or both of you (<15 k debt, surplus < 50 per month)?

Just noticed the car - would need to be valued at less than £1k but it might be, or might be soon, on Parkers guide, poor condition.

thank you for your reply!

Most of the debt is in my husband's name (2 cards and the larger overdraft) and he's the one bringing in a wage, so I don't think we'd qualify, though I will look at Parkers for the car as I was probably a bit overestimating the value, especially with the bumps it's had......

also my situation will change at some point (hopefully soon) in that I'll be bringing in money, so our surplus income won't always be this low. We're also waiting on a few tax credit changes that may help. It's just hard to know what to do for the best right now so we're not spending more time having our money being eaten up by interest and charges...