Don't know where to begin, please help!

Lobbylocks

This will be long - sorry! Need to get it all off my chest and hopefully get some good advice.

So, we have been a debt a long time but it was manageable, having just gone back to work part-time following maternity leave - we have a little boy who is now one. Did all the sums and we could just about manage with hubby contributing £700 a month to the bills etc, I could manage our outgoings and my payments on a loan and credit cards.

ll was going fine, I was moving credit cards around on 0% deals, we have compared and moved all our utilities, cut down on non essentials etc etc - however, hubby lost his job and hasn't worked for a while, so couldn't make his payments - he now has a new job but has to build up his hours, so unlikley to be able to contribute the full amount I need to make the books balance.

To cut a long story shortish, I have been paying our rent on a credit card for the last couple of months, as we don't earn enough to cover our outgoings and payments. We are not behind on anything yet, but it is fast approaching and I'm terrified!

I phoned the National Debt Helpline this morning and they suggested that a DMP might be best way forward. They are sending all stuff out to me. i also looked on the CCCS website and they suggested voluntary contributions to creditors etc.

I'm hoping that in 6 months time hubby will be able to pay me, I will have gone back full time and we would be in a position to manage again, we also have one payment due to finish in June and my loan finishes next Feb, so I'm worried about stuffing up my credit report, having to get rid of all my cards and changing banks, if we might be ok soonish. I'm terrified of not having a card there as a back up in an emergency, especially as we have our son to consider.

I do appreciate that using my cards is what has got me into this mess in the first place and I really do want to sort this out, just not sure what is the best way forward - can anyone offer me any advice, please?

Thanks xxxx

PS - I have a savings account in my son's name, that I am the named access person on, would they be able to touch that money when looking around my accounts for payments? I already feel like I am letting him down enough, let alone having someone take his savings!

neverbefore2011

I am very new to the world of unmanageable debt, and also to this forum, but I am learning lots of stuff on here, as well as through the advice charities' websites, and my own direct dealings with my credit card company

It seems to me that you have two massive things in your favour, which so many people do not have - 1. You have not yet defaulted on any of your payments, and 2. You are predicitng that your circumstances will recover within months

DMPs etc are, IMHO, medium to long term arrangements

For the period of time you are talking about, an informal arrangement with each of your creditors would be preferable

Work out what you can afford in total each month, and then apportion it out to each creditor according to the size and priority of the debt. Some of them will probably only get a pound a month!

Then call them one by one and make the offer - by contacting them before you miss a payment, you will earn lots of brownie points

If the creditors can foresee that such arrangements will be short-term only, then they would be foolish not to accept. Don't forget to ask them to freeze interest and charges during the 6-month period - you might get lucky, you might not

But call National Debtline again first, and run the idea past them

Well done for looking at this problem before it becomes a crisis

pelirocco

What is your husband doing with his wages? does he only contribute towards the bills?

Bettingmad

First things first, you need to fill out a Statement of Affairs (SOA) for us to get a little more meat around the bones of where you are and the best way forward.

http://www.makesenseofcards.com/soacalc.html

Complete it and then copy and paste it on here.

Don't worry about your son's savings, they will be fine.

Lobbylocks

pelirocco wrote: »

What is your husband doing with his wages? does he only contribute towards the bills?

He doesn't currently have any wages! His last pay packet was £150 which he needed for his petrol, his own DMP payment, car insurance etc.
He should be earning again by end of next month, but his share of the bills etc has not been available.

Bettingmad

Can you enter into the SOA the montly repayments for the two credit cards and overdraft?
Also you mention his wages are £150 however the figure of £800 is on the SOA?
With regard to his own DMP payment are there any other details of this?

Lobbylocks

Sorry, hopefully have done it properly this time. I don't count my partner's income as all debts are in my name and at moment he is a month off being paid again, as he is a carer his hours are variable and he does most of the childcare. In theory he should give me min. £700 pm towrads the bills etc, although this hasn't happened for the last couple, hence we are getting in a mess cos I don't have the extra to cover my debt payments. Hope that makes sense?


Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2
Monthly Income Details
Monthly income after tax................ 1754
Benefits................................ 81
Total monthly income.................... 1835[/b]
Monthly Expense Details
Rent.................................... 925
Council tax............................. 147
Electricity............................. 57
Gas..................................... 57
Water rates............................. 40
Telephone (land line)................... 25
Mobile phone............................ 70
TV Licence.............................. 12
Groceries etc. ......................... 300
Petrol/diesel........................... 100
Road tax................................ 20
Car Insurance........................... 23
Car maintenance (including MOT)......... 10
Childcare/nursery....................... 250
Contents insurance...................... 12
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 20
Total monthly expenses.................. 2088[/b]

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 1000
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................9500......185.......0
credit card....................3734......85........0
credit card....................2200......25........0
overdraft......................1600......0.........0
loan...........................4555......388.......0
Total unsecured debts..........21589.....683.......-

Monthly Budget Summary
Total monthly income.................... 1,835
Expenses (including HP & secured debts). 2,088
Available for debt repayments........... -253
Monthly UNsecured debt repayments....... 683
Amount short for making debt repayments. -936
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,589
Net Assets.............................. -19,589

neverbefore2011

How confident are you that things will improve within 6 months or so?

The reason I ask is that, so far as I can work out, creditors don't over-react to a small number of missed/reduced payments

If you tell them in advance that you are effectively giving yourself a 6-month payment holiday, and reducing payments to £1 per month each, they will probably not get around to doing anything much before you resume normal service

It's a bit of a gamble, and you will of course completely screw your credit rating

Bettingmad

Okay with the defecit you have you need to do something ASAP as your debts will rise at an alarming rate as things currently stand. I appreciate that you say all debts are in your name however if you approach any DMP provider they will want to take into account you Hubby's earnings.
How soon will it be before your Hubby is earning again to supplement your commitments?
Your rent is extremly high, is there any way you can find a property any cheaper or is it down to your location?
With the figures you have I don't see another way out apart from a DMP at the moment. It will take your hubby contributiing and downgrading your rent to get you on an even keel.
Even is short time arrangement with your creditors will significantly effect your credit rating, however I don't see any other way at the moment.
How long does the loan have to go?
You say your Hubby is on a DMP, are you able to provide a little more info on this?

[Deleted User]

Lobbylocks wrote: »

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

Monthly Income Details
Monthly income after tax................ 1754
Benefits................................ 81
Total monthly income.................... 1835[/b]

Monthly Expense Details
Rent.................................... 925 This is pretty high, is this competative for your area? Could you downsize?
Council tax............................. 147 Is this paid over the usual 10 months? If so Feb and March should be CTax free and so should be a CTax free month until your OH gets his wages sorted again.
Electricity............................. 57 Are you on the cheapest tariff with the cheapest company? Compare every 6 months or so (and if switching makes sense then check the cashback sites - Quidco, topcashback, onepollcashback etc - for incentives). Switch things off instead of on standby, turn the radiators off/down in rooms that you are not in/use less frequently, switch the thermostat down on the hot water boiler by a few degrees (you won't notice) etc
Gas..................................... 57 as above
Water rates............................. 40 are you metered, and if not consider if this would be cheaper
Telephone (land line)................... 25 what does this include? Internet too?
Mobile phone............................ 70 This is very high - how many is this for? In total you are paying just under £100 for telephones every month! Are you tied into a contract (even if you are, sometimes the companies will allow you to downgrade a tariff if you plead poverty). Also do you use all the minutes/texts in the package? If/when out of contract switch to a SIM only package or go PAYG - shop around and compare companies - I personally have saved a fortune by switching to GiffGaff (and you can keep your number), so I can recommend that you check them out.
TV Licence.............................. 12
Groceries etc. ......................... 300 I think that savings can be made here - meal plan, batch cook, cook from scratch, drop brands, shop in Lidl/Aldi etc and in the short term (until OH's pay is reular again) see if you can cook from the cupboards/freezer.
Petrol/diesel........................... 100
Road tax................................ 20
Car Insurance........................... 23
Car maintenance (including MOT)......... 10 (do you actually save this somewhere for when it's needed?)
Childcare/nursery....................... 250
Contents insurance...................... 12
Presents (birthday, christmas etc)...... 10 (do you actually save this somewhere for when it's needed?)
Haircuts................................ 10
Entertainment........................... 20 What does this cover?
Total monthly expenses.................. 2088[/b]

Assets
Cash.................................... 0 where are your savings for less regular bills?
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 1000
Total Assets............................ 2000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR Are these all currently on 0% deals, and will they all remain that way until OH's wages are back on track?
credit card....................9500......185.......0
credit card....................3734......85........0
credit card....................2200......25........0
overdraft......................1600......0.........0 Are you being charged at all for having this?
loan...........................4555......388.......0
Total unsecured debts..........21589.....683.......-

Monthly Budget Summary
Total monthly income.................... 1,835
Expenses (including HP & secured debts). 2,088
Available for debt repayments........... -253
Monthly UNsecured debt repayments....... 683
Amount short for making debt repayments. -936
Personal Balance Sheet Summary
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,589
Net Assets.............................. -19,589

Just to confirm, is this your actual SOA that you are paying now, and from next month the income will be higher as your OH will be contributing £700 pm from then? If this is the case then I think that you will be just fine and that you can manage for one month like this (March will be CTax free, try and reduce your phone payments, and cut back on the groceries)

If this SOA has to last you longer than that, then I think that more drastic changes will need to be made.

Also you have mentioned that you have savings for your son. I am sure that (when he's older) he would understand if you spent them supporting the family rather than getting further in to debt. You can always repay this to his savings account before he needs them when you are debt free (you have mentioned that your current situation is temporary)

I have made some comments above,

HTH

D9

runaroundpauper

You'll have to be convinced that your hubby can bring in more cash ,I am in a dmp nowbut last year making calls etc considering my options to get straight , I contacted my credit card companies and as soon as I mentioned coming to an agreemant or maybe a dmp the cards where stopped I do not know if I went about it the right way as I am not experienced in these matters but that was there response ,so I went with pay plan. £70 mobile phone 2 cars