We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Desperate and confused...

fairygirl1977
fairygirl1977 Posts: 6 Forumite
edited 14 September 2012 at 6:37AM in Debt-free wannabe
Hi...I dont really know where to start so I guess I will try and start at the beginning and cut a very long story short.
I am 35-yrs old, separated (not legally divorced) and have no dependants. I live in a flat which is shared equity with Barratt's as it was the only way that I could get onto the property ladder after my marriage ended. The 'shared equity' has to be repaid in one lump sum (£26,450) within the next 8-years and is basically a 2nd mortgage.
I have £38,000 in credit card, loan and CCJ debts. I also owe £7555 on a credit card in my mum's name who is now on a pension and has her own mortgage and therefore I am solely responsible for this debt as she can not help.
I work full-time and bloody hard as a Social Worker. I also have mental health problems - query Bi-Polar but on paper I have OCD and Emotionally-Unstable Personality Disorder however none of my creditors appear interested in this fact despite their link to over-spending. I have been stable on medication for aprox 2-years now after numerous hospital admissions following serious suicide attempts and years of self-harming. The majority of my over-spending has occurred when I have been unwell.
I am currently on a DMP with CCCS and have been repaying at a rate of £343 (incl CCJ) since May 2011 and have paid around £5000 off to date and have also been allowed to repay my mum's credit card at a rate of £173 per month which is the minimum payment.
However after a phone call to Barratt's, I have discovered that I now need to save £245 per month for my shared equity repayment which means that my DMP payments is reducing to just £50 per month on a £38,000 debt! I will not even be covering the interest or reduced minimum payments! Therefore surely my debts will merely increase!
I have suggested to the CCCS that I look at either an IVA or Bankruptcy as presently I see absolutely no light at the end of tunnel and my mental health is suffering (I have just been off work for 6-weeks and I am terrified that I will lose my job if this continues).
Please do not judge me on this but I lied on my current budget stating that I pay £160 on a pension (which I did at the start) however I cancelled this so that I had the money to live on each month as with my DMP after all essentials I am allowed £22 for clothes (I need business dress for work!) and £16 to socialise! Im sorry if I sound spoilt but I simply can not live on this! Because of my reduced payments my DMP is now going to take me 20+ years to repay and that is reliant upon creditors stopping the interest payments which they have NOT! This budget to me is not realistic but is what I am allowed.
I understand that I would be on a budget for IVA/BR but because of the reduced length of time it seems more manageable for me, however I am aware that they will not allow my repayments to my mum for the credit card so how can I get around this? I can not leave this debt with her as she would lose her own home etc
Also, I am an essential car user for my employment and therefore need a vehicle. My car is what I have a CCJ for and therefore would this still be seen as an asset if I still owe £12,000 on it and it is only valued at £6500 now?
If it is taken off me, will I be given money to purchase a new car as I can not work without one and realistically how much do they allow? I am concerned that with a cheaper, more unreliable car, I would not be able to afford repairs etc on an IVA/BR budget as is already the case on my DMP (it has just cost my £500 for new tyres and repairs and 30,000 miles service yet my DMP only allows £180 per year allowance!)
Also, what happens with my flat as there is no equity in it due to it being shared equity and I have only lived there for 2 years and paid about £1500 off my mortgage? Will I be able to keep it as my mortgage is only £320 per month whereas if I am forced to sell and rent it will cost me double that!
Also, I receive extra payments in my monthly salary for the mileage I have done in my car which I have not declared in my DMP as this is not guarenteed and differs significantly from month to month. Would this be used in an IVA/BR?
What I am really concerned about is I am 35 and have a partner. We don't live together because of my financial situation however we want to live together at some point. How would this affect an IVA/DMP?
Finally....apologies for droning on but it is even some relief to get this all into writing and out of my head (I am not sleeping at the moment due to the worries and stress of it all)...at 35 with no children, I really want to have a baby soon (I don't necessarily mean this year). Times ticking on and I do not want to leave it too late and surely I am entitled to have a family, even just one child? How on earth can I possible do this with a DMP/IVA/BR????
I have an appointment with a debt advisor at Citizens Advice on Tues however I am scared to be honest about my pension etc in case I get into trouble. CCCS are also going to contact me on Tues regarding possible IVA but again I am really worried about my pension and the mileage payment I sometimes receive as it will look like I have lied about my income which in reality I have not as it is not a certain payment.
ANY help, advice and support would be MASSIVELY appreciated.
Many thanks :A

Comments

  • ladybez
    ladybez Posts: 474 Forumite
    Welcome to the boards, Fairygirl. Did not just want to read and run. Someone with more knowledge than me will be along shortly. As Martin would say, there is no problem which cannot be solved, its just finding the right solution. My one comment would be about wanting a baby, there is no "right" time to have one and people do find a way through financially, you may need to look at your medication and bear in mind that high levels of stress are not good for either yourself or a developing baby.
  • Hi Fairygirl - glad it's helped to put it all down (it often does!).

    First thing I'd suggest is doing a Statement of Affairs http://www.stoozing.com/msoc/soacalc.php - you'll get better advice on how things look if we can see all the income / outgoings / debts etc & it'll also help massively for when you speak to CCCS next week.

    I'm not an expert on IVA/BR so wouldn't want to comment too much (others with more experience will be along shortly) but I'm pretty certain for BR you'd not be able to make separate payments to your mum as you can't be seen to treat one creditor more favourably than another.

    For the car, you may be required to give up the car (as it's an asset) but if you can prove it's essential for your job (and as an ESU this should be the case), the OR can use their discretion to allow you to keep it. However, I'm not sure about values and whether they can force sale & let you purchase another.

    An older car that is well maintained need not cost more and can still be very reliable - also there are lots of small cars around now that are much cheaper not only to buy but also maintain and run which should help cashflow for the future.
    Grocery Challenge £211/£455 (01/01-31/03)
    2016 Sell: £125/£250
    £1,000 Emergency Fund Challenge #78 £3.96 / £1,000
    Vet Fund: £410.93 / £1,000
    Debt free & determined to stay that way!
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.6K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.8K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.