Newbie no longer with her head in the sand..help and advise appreciated.

MaxxysMummy

Hi all,

First off I have been a lurker for a little while and finally feel brave enough to tackle things, I know you all give brilliant help and advise and I could really do with some of that.

Secondly, this is likely to be very long with lots of questions so apologies in advance.

I have never been debt free in my adult life (I an now 31) and by my own admission I would spend money freely without thought of consequence. I no longer do this and have not gained any new debt over the last year, most of the debt is unsecured such as pay day loans, water, gas and electricity, store cards and catalogues. There are council tax debts as well. All of these appear to be in default as O have ignored them for so long. I have kept all the letter I have received from companies and also have copies of my credit reports. The outstanding amount is approx £14,000 owed to approx 19 creditors.

I have a long standing disability, a part time job and a young son of 6. I do not want him to grow up thinking debt is normal and ok, I try my best to teach him about handling money, he has a junior ISA that I pay £30 per month into and a savings account which I pay £20 per month into (he saves 40% of this and puts it into his ISA). I am also a part time student studying through the OU for a BSc in Psychology, I am in my first year after completing the access course to gain entry.

At the beginning of the year I was issued with a CCJ (the only one) which spurred me on to try and sort things out on my own. I wrote to all of the companies after completing a SOA and the ones which replied I have payment plans in place which are up to date, however the additional companies (three quarters of my debts) did not reply and I haven't dealt with these at all to date. I now want to get everything sorted so I am not constantly worrying about it, I have also had a change in circumstance since I set up the payment plans and my SOA will be different (I will try and get one together this evening).

At present myself, son and our cat live with my dad, I pay my dad rent money as he has a large mortgage it also includes the bills. No one else is aware of my financial situation. I also buy the food, toiletries and cat food for myself, son and cat as well as normal costs incurred such as clothing, social, vet bills ect. I have not long passed my driving test and have a car worth approx £1500 and the normal bills which come along side that, this is also my only asset. I have no savings and the junior ISA is in my sons name and cannot be accessed until he reaches 18. The car is invaluable with my disability.

With regards to money coming in I receive my part time salary, maintenance for my son, PIP, child and working tax credits with the disability element for me and child benefit.

Again hopefully it will be clearer when I get my SOA done and posted.

My questions are as follows..

What is the best way to tackle this, I have looked at a DMP with step change and this seems best to me but I lack experience.

Will I be made to stop paying into my sons accounts?

Will I be made to sell my car?

Once debt free I would like to get a mortgage, will this even be possible?

I will be looking to move onto my own property next summer, how likely am I to pass a credit check with an agency due to the CCJ?

I have more but will wait until I have my SOA together and then post. Sorry this is so long, I needed to speak to other and get this off my chest, thank you for reading.

MaxxysMummy

EssexHebridean

Well done on the LBM! That's the biggest step you'll take - to acknowledge the problem and commit to tackling it.

As for the questions, I'm guessing that most people will say sort the SOA out first, then people will be in a position to make informed replies as well as offering help, etc. :-)

National_Debtline

Hi MM


As you'll appreciate it'll be easier to offer definitive advice once we see your SOA, but have just offered some general responses to your questions below as a pointer.

MaxxysMummy wrote: »

My questions are as follows..

What is the best way to tackle this, I have looked at a DMP with step change and this seems best to me but I lack experience.


See above - will reserve judgment until we've seen your SOA.

Will I be made to stop paying into my sons accounts?


Not necessarily. These sorts of payments would be classed as "discretionary" expenditure, and there is usually some room allowed for such spending (within reason) whatever debt option you pursue. Obviously, maintaining spending in certain areas may mean you need to cut back in others.

Will I be made to sell my car?


No, not if you're pursuing an informal option like debt management. Even if you have to consider insolvency i.e. writing off your debts altogether, it's usually feasible to maintain a car of some sort.

Once debt free I would like to get a mortgage, will this even be possible?


Any adverse info on your credit report will take six years to drop off. It'll certainly be harder to get a mortgage while such info remains visible, but not downright impossible. Getting approved for a mortgage depends on all sorts of factors, of which your credit report is only one.

I will be looking to move onto my own property next summer, how likely am I to pass a credit check with an agency due to the CCJ?


I would expect the lettings agency to notice the CCJ in the course of their general credit check, but it's really at their discretion as to how big an issue it is. If they consider you a "high risk", they may seek a higher than normal deposit and/or someone to stand as guarantor for your rent (i.e. the guarantor would be expected to pay in the event that you miss your rent payments).

I have more but will wait until I have my SOA together and then post. Sorry this is so long, I needed to speak to other and get this off my chest, thank you for reading.

MaxxysMummy

Dennis
@natdebtline

MaxxysMummy

Thank you very much for your help and advise so far, I have not yet managed to complete my SOA but I have set aside some time this evening to complete it and will post here as soon as I have done so.

Thanks again

MaxxysMummy

andyfromotley

Hi Maxxys mummy.

welcome. Pop up your soa.

Stepchange advice is normally very sound.

Have you considered or chatted to them about a bankruptcy? A DMP for that debt with a fairly low income may well run for years causing you as many problems as a bankruptcy, whereas the vast majority of bankruptcies are done and dusted after a year, It may be something that you wish to discuss with stepchange.