Mess!

angelmommy_2

Hi,

I am in a huge mess at the moment. I am terrified I am going to end up even worse...

At the moment I am a full-time mum, child is 3 and attends part time nursery (free hours). Hubby works and brings home 1400 after tax per month. We get 40 per week tax credit and 81 per month child benefit (total per month income is 1640). Apparently not eligible for any other benefits!

I tried to upload a SOA but can't post links.

Here is the debt:

10,000 loan @ £195 p/m
4,000 loan @ £120 p/m
7,100 credit card at 1.285% interest p/m
320 overdraft at 18.9% apr
3600 credit card (not sure of rate but it's lower than the other card)
2700 overdraft at 18.9%
2000 overdraft at 18.9%
1000 overdraft at 17.9%
300 overdraft at 17.9%

we also have an additional 1500 overdraft at 18.9%, this is repaid monthly when hubby's wages go in, but we then spend it again iykwim.

We keep monthly outgoings minimal

Food - 200 (work in progress though)
Petrol - 40 max
Bills - 200 (my dad pays our council tax as we're so broke)
Car - repairs and mot free at hubby's work, so just cost of tax and insurance which is about 80 p/m
Loans - 315
Home insurance etc - 22
toddler activities - 20

We do not go out ever, apart from toddler activities (soft play, swimming etc), no drinking or going out or new clothes. No holidays.

But now we have reached breaking point where I actually worry about paying the mortgage each month. The above is literally how our finances stand right now.

We can take a mortgage holiday in October but not until then, and we have bad credit ratings so other loans aren't really an option. Selling our house isn't an option as where we live, rent is the same or higher than our mortgage and we couldn't afford legal fees etc. Chances are we'd lose money by selling and we have little equity.

Don't know what to do... don't want to go down the bankruptcy route or do anything to worsen our credit Desperately looking for a job that either fits in with childcare (3 mornings a week) or pays enough to cover additional childcare.

MoneyMission

Hi Angelmommy

Didn't want to read and run.

Sorry to hear how frightened you are. Martin Lewis always says he hasn't seen a debt problem that can't be sorted so please take heart from that. I suspect someone far better qualified than me to comment will be along in a moment.

In the mean time, I think you might want to consider contacting StepChange for some free, non-judgmental advice though. Give them a call this morning if you can and it will be a weight off your shoulders in that you have taken a step towards getting something sorted.

Take care

MM

moohound

Well done for taking the first step and posting here, there are lots of lovely people who will advise and help you.

Are you likely to return to work in the near future, you said you were looking have you seen anything suitable?

Why is worsening your credit so bad? When I started my DMP I trashed my credit rating, but at least I could eat, buy fuel, clothe my child and sleep at night, so its not the end of the world. You can't carry on as you are really, unless you get a job quickly, then snowballing might be the answer.

OneLife_OneShot

How can you have so many Overdrafts? Surely banks would not take a risk. I would contact StepChange.

heyjude2013

Hello angelmummy,

Sorry to hear you're so worried about everything.

Do your expenses above include your mortgage or is that extra? I couldn't see it written anywhere so wasn't sure.
How much money do you actually have left after all your household expenses?

I know you said you couldn't post your SOA, but it would be helpful for you to know exactly what your APR and minimum repayments are per month. It may not be pretty (sorry) but its better than not being sure what's what.

Take care x

loveka

I am so sorry you are feeling so low. You really do need to contact one of the debt charities, you can read all about them on the sticky bit at the top of the forum. It sounds to me like a Debt Management plan or IVA may be options you need to look at.

You say you don't want to trash your credit rating, but from the figures it looks like you may have no choice. If you have anything bad at all on your credit rating it is trashed anyway I have heard f people who have been turned down for mortgages over very small value markers on their file.

I am going to be blunt now- you need to learn to live without credit, it is the only way to deal with the this long term. A DMP is a lifesaver in this respect, and also allows you to sleep and relax again. It is not the easy way out, but such a relief.

I would advise - if the time is right trying to get a good 5 year fix on your mortgage before you start anything which will impact on your credit rating. Good luck.x

OneLife_OneShot

I agree with the post above, you credit report is already ruined with so many ODs.

angelmommy_2

Thank you for all your replies.

I am looking for a job but it isn't easy unless it pays well (to cover childcare as my friends/family work full time and live 60 miles away) or unless it fits in with her nursery hours. I have seen a few jobs which I have applied for and am waiting to hear back from, looking all the time.

The overdrafts - some are mine, some hubby's, some joint. We've had them all for years, though never used them until the past few years.

What is snowballing?

I can't really change the mortgage atm, it is a bit of an odd one - we had a 5 year fixed which we ported to save paying ERC of 3k amongst other reasons. We needed more money on top to buy the next house which is a 2 year fixed, so they both end Oct 2014. Does that make sense? Our credit ratings are now bad so we can't get any new credit or fix the mortgage.

Total left after paying bills, mortgage and loans is about £380, of which I pay approx £160 onto the biggest credit card as that is around the min payment plus a small bit extra.

I really do need to live without credit! I just can't see a way. I considered a debt consolidation loan, except our credit ratings are bad.

I don't mind damaging our credit ratings in the short term, because we won't be needing anything huge like a mortgage anytime soon (we switch onto the standard variable rate and i can stay on that if I have to next year, remortgaging isn't essential). I just don't want to do anything that might damage it for years and years, like being bankrupt or IVA.

We tried to get a small loan but were turned down, upon checking both our credit reports, we have low scores, possibly due to the amount of borrowing we have or the amount of searches (we had mortgage searches last oct, followed by 2 loans that xmas etc. so quite close together)

cheered up by martin saying he has never seen a debt problem that can't be fixed though!

PinotGrigio41

Angelmommy, so sorry to hear everything is worrying you so much.

Really though , as others have said you need to sit down and do an SOA and also speak to StepChange. Once you pick up the phone and explain everything to them I guarantee you will feel so much better.

Keeping a roof over your heads and feeding and clothing yourselves must be your priority, not the debts as worrying as they are. Stepchange or similar will help you come to an arrangement that suits you and your creditors, which in turn will relieve much of the worry for you.

There really is light at the end of the tunnel as so many people on here will confirm.

Take Care

Mrs PG x

Suseka

Hi there and welcome to the DFW board. Well done for taking the first step and acknowledging that you need debt advice -and more importantly -a debt solution.

As others have already said, I strongly encourage you to call stepchange or payplan or national debtline, all of whom are free and can give you honest and impartial advice.

I went with stepchange and it has made such a difference to how I feel about being able to deal with my/our debts. I must admit I was really nervous about it at first, and have had some sleepless nights worrying about the whole 'trashed credit rating; bad debtor thing", but I'm over that now.

Once I've cleared my debts -then I never, ever, ever, want to borrow any money again. Except of course the mortgage and I look forward to the day I can be mortgage free too.

Try not to overly worry (yes, easier said than done), but having taking that first step, do the next best thing and pick up the phone and get some advice.

whattodo1967

Hi your post really stood out to me, as you will see from my signature I was in your position this time last year.
As the other replies have said there is no debt that can't be fixed, as scary as it is, it's the letting go that's the hard part, once you do you will feel much better.
Contact step change or pay plan and discuss with them.
I have been on a dmp for the last year and its the best decision I could of made.

Good luck whatever you decide to do.