Please help me decide my life plan.

Lmh71365

Everything I've worked so hard for and my entire life is about to go down the pan.

Let me explain...

My partner and I used to have fairly high incomes and lived a lifestyle accordingly. I fell pregnant unexpectedly, and everything fell apart. I plummed all of our money into clearing our debts to a managable level during my maternity leave (whilst earning SMP), leaving us with outgoings which were almost equivalent to my income, but nothing else (£120 for food, that's it). So we have no savings.

I've just gone back to work and we have three problems:
1. My mum had agreed to pay our first month childcare, no strings attached, but she has now bailed. This is a total of £785.
2. My OH had to take a week off work sick last month, this has left his income £450 less than normal, so we haven't been able to make all our payments this month, and are living off spaghetti.
3. Having returned to work and got my pay slips I've discovered I haven't been charged for fuel during maternity leave (we use a fuel card) so nearly £800 is being deducted from next months wages.
I work on commission and my basic salary is £1200 a month after tax. £1200 - £800 fuel is £400, childcare then takes me £385 over my wages, PLUS the payments made from my account each month.
4. I can't get credit due to taking out several new loans to replace more expensive loans when trying to make our outgoings managable. I just got a "bad credit" credit card only to find out the limit is only £250.

So the way I see it is this:

We can't afford her nursery for the next two months, at all. We have nothing to give for this month and it's due now, and we'll be £385 short of it next month.

Does this mean we have to pull her from nursery ASAP, one of us resign, leaving us £600 short of our outgoings each month, meaning we'll have to go default on our loans etc?

Is there any way of putting off the nursery/loans until we can afford it? Problem is that my income varies and this is the quietest time of year so it's not looking promising for repaying anything.

We are in a short term problem with no solution at all, as far as I can see, beyond "giving up". My wages are about to increase, but not enough to rectify these debts until probably April next year (I'll get a bonus in April which is usually around £4000)

Ugh someone just please help or tell me that yes I'm screwed and that's my only option, in which case, can someone also tell us what will happen to us? How soon will our financed car be taken away? How long before people are knocking on our door?

Outgoings:

Rent - 795
Utilities - 65
Water - 88
Council tax - 110
Sky broadband - 16.40
EE - £45
3 - £25
O2 - £18.50
Car finance - £243
Loan - £160
Gyms (x2 - frozen) - £10
Food - whatever is left

Note: water & council tax are really high because of an error at our last flat (we thought water and council was included and it wasn't), so we have a repayment scheme with them. Both end in April and go back to normal rates. We can't have a water metre at our house so water is fixed at £68

crazy_cat_lady

Initial thoughts from me -
Speak to nursery. How well do you know them? I always found the manager at my place incredibly helpful. Do you qualify for any help with childcare costs either through tax credits or through your work?
Speak to work - is it not possible for them to spread your repayment over a few months so that it's more manageable.
What kind of banking customer are you? Is it possible for you to explain circumstances to the bank and see if they can offer any help?
How old is the little one? It may be worth speaking to your health visitor. When my ds was born, my dh was very ill and in hospital - my hv arranged for nursery fees to be paid so that I could visit him in hospital and have a break for myself for a few hours a day.
Have you explained to your mum how dire the situation is looking? I can't imagine she'd want to see you struggle if she can help.
Do you have anything worth selling?
It may be that things have to go to h£ll financially for a while. Kids are such a massive life changer in every sense - including financially. I had one year of nursery fees being over £1000 a month, which barely made it worth both of us working. You won't be the first or last person to get into trouble because of a change in circumstances. I'm sure people wiser than me will be along with advice for you - but there will be a way out of this.

Edited to add - please don't be ashamed to ask for help from anywhere you can get it

triple_choc_chip

It's never so black or white, all or nothing, so no reason to 'give up'. Your panic is evident in your writing but really the wheels turn slowly and by the time missed payments are noticed you will be nearer the point of resolving your cashflow problem and you already know you will have the means in April to get straight.

Most people on this forum don't have a golden bullet of £4k to look forward to in 6 months time, your problem is finite and the light at the end of the tunnel is only 100yds away. A few suggestions:

Pay priority debts in full such as the council tax.

Ask work to spread the fuel cost, they have until end of March to reconcile and taking over 60% of net pay is unreasonable. Even if they stretch to two months it will make a huge difference to you.

Ask the loan company for a payment holiday or a couple of months reduced payments. If they refuse pay them a nominal amount of £1 until you can resume normal payments. Same goes for credit cards. By the time they take any action you will be back to normal.

Check what type of finance agreement you have for the car, don't risk it being re-possessed.

If your Mum can't help with the full amount could she help a bit? £100 would really help you and ask her for a loan not a gift. A little bit of help from several sources will make up your shortfall.

Would either you or partner get an overdraft? Again, ask for a smaller amount that is more likely to be accepted rather than the whole sum. Always ask before you have difficulties, don't wait until there's missed payments showing on your credit records.

Good luck x

sourcrates

Good advice above, make sure you pay priority debts, leave the loans, cards, even the car payment, if you cant afford it, for the time being.
I've said this many times, the debt collection process is very slow, it can take months, even years, before any court action is even mentioned, yes they will write and call you, but that's all they will do.


your situation seems only temporary, so I would go with the advice already given.

Lmh71365

What I am most worried about is protecting my credit rating. We need to move house soonish (rented) and I'm worried this won't happen.

Partner has adverse credit.

Can't get any payment holidays - I have asked.

My work are totally point blank refusing to spread the overpayment. I don't know how else to ask, I've asked everyone I can and tried every avenue but can't find anything. Tempted to leave and start somewhere new so they can take it out of my last wages while I earn new wages elsewhere (no-one here is ever asked to complete their notice). But I love it here.

patman99

Speak to the Council Housing Team with regards to your rent. My friend did this and was referred to some kind of rent assessment unit where they set the rent at a level affordable to the tenant.
This is about 60% of the rentable value, but the LL cannot raise the rent without having to go beck to the assesment team to get their agreement.

Failing that, the Govt. has rules in place about how much you should have left after paying rent, Council Tax, watr, gas and electric. If you are left with less than the amount they state you should be, you will get partial HB to make up the amount.

You are concerned about your credit rating, but don't forget that the lettings agent will not only credit-check you, but will also do your partner as well so you cannot escape from that.
As you rent, you have more options open to you than if you had a mortgage.

As someone else has already stated, pay all your loans (except those secured against your car) and credit cards £1 per month.

Also look into a DRO. You can add your loans (not the car one unless not attached to the car), water bill and electricity bill to this. Costs £90 and IF all the creditors agree, those debts will be gone. The DRO remains on your credit history for 6 years.

triple_choc_chip

Lmh71365 wrote: »

What I am most worried about is protecting my credit rating. We need to move house soonish (rented) and I'm worried this won't happen.

Partner has adverse credit.

Don't waste energy worrying about things you cannot change.

Can't get any payment holidays - I have asked.

Then they will have to be content with £1

My work are totally point blank refusing to spread the overpayment. I don't know how else to ask,

If payroll have rejected you, go to HR. It may be that they can arrange a sub to re-address the situation they have left you with.

I've asked everyone I can and tried every avenue but can't find anything.

The banks don't lend willy nilly when people have messed up but you have a very good reason for your predicament: Reduced income due to maternity leave, the new expense of nursery fees before 1st proper payday but you also have a large bonus in six month's time. Most banks would risk a few hundred for a six month period on the strength of that. Visit the bank in person and ask in a business like fashion and be in control.

Tempted to leave and start somewhere new so they can take it out of my last wages while I earn new wages elsewhere (no-one here is ever asked to complete their notice). But I love it here.

That smacks of cutting off your nose to spite your face. Loving your job is as important as the salary, why risk losing that over something that will soon pass?

thegreenone

I agree with triple choc chip, go to HR or, can you talk to your line manager? Taking that amount of money from one month's salary is totally unreasonable even more so considering they didn't send you your payslips, which I think they should have done. Not sending those has caused this problem. Take it to the top.

Bobarella

Hi
I don't know how useful this thought is in the scenario but do either of you have anything you can sell to make some fast cash?

And my only other thought is can you get any help with nursery fees by doing the childcare voucher thing direct from wages? I understand that it's not going to help right now but in the future it may well do?

Also can you get any additional income coming in asap like bar work or pizza or other take away food delivering in the evening. Thinking more of your OH if he is free and you have the young one.

Sorry to hear your mum went back on her word too. Is there no way of discussing it with her again?

Bob

northerner999

Lmh71365 wrote: »

What I am most worried about is protecting my credit rating. We need to move house soonish (rented) and I'm worried this won't happen.

Partner has adverse credit.

Can't get any payment holidays - I have asked.

My work are totally point blank refusing to spread the overpayment. I don't know how else to ask, I've asked everyone I can and tried every avenue but can't find anything. Tempted to leave and start somewhere new so they can take it out of my last wages while I earn new wages elsewhere (no-one here is ever asked to complete their notice). But I love it here.

I lose track of the amount of times I have written on here about the unimportance of the mythical credit rating, it seems a lot of your rationale is based on this.

Don't bother.

If you cannot eat, credit ratings don't matter.
If you cannot heat you or your family, credit ratings don't matter.

Certainly don't quit a job you love, who will pay you a bonus in April which renders all your concerns sorted, for it.

The advice above is really sound, work out a list of the most important debts and make sure they are paid from the top first. If you run out, tough on them.

There are loads of ways to create extra income. Rake through your DVDs, CDs, books. Got jewellery you don't wear? eBay can be your friend. Car boot sales. Sign up for online survey websites and power through them when the little in is in bed.

You'd be amazed how far you can make food last. It won't be as satisfying as you are used to, but tough it out. You cannot afford to chuck anything out - even if it means bizarre meals just to make sure you eat that coleslaw you bought reduced but found you didn't really want. You mention spaghetti - cook a huge pan of bolognese and freeze all but your immediate portions and you could have your meals for the next fortnight. If it comes down to it, approach your local food bank and see what you need to do to be eligible.

Dird

I guess this is in London? Does childcare really cost £785/month in this day & age? Is there no cheaper nurseries around?