4 CC's, childcare, mortgage, bills etc, need help.

National_Debtline

Hi

Sorry to hear about the difficulties you’re having but it’s good that you’ve started to seek advice. There are some really helpful comments from everyone already.

Your mortgage, household bills and essential living costs will always be higher priorities than unsecured credit debts. As has been suggested, you can cancel the direct debit for any debt payments you can’t afford and then inform the creditor you’re seeking advice. There is a ‘hold action’ template letter for that purpose here:

www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

Completing a SOA and posting it here is a great idea as you will get an overview of your finances and other posters will offers advice and tips on where there may be scope to reduce your outgoings.

The SOA link is here:
www.stoozing.com/calculator/soa.php

A Debt Management Plan (DMP) is an informal payment arrangement where an organisation such as Stepchange negotiates affordable repayments with your creditors on your behalf, and they’re often able to get interest frozen too. Stepchange do not charge you a fee for this.

You can also negotiate in a similar way directly with your creditors yourself and some people prefer the extra control, whereas others like the fact that Stepchange handles everything for them which often removes a lot of the stress.

Either way, the main effect will be that you default on your debt contracts and a default will be put on your credit reference file for 6 years. This will have a negative impact on credit scoring, which could make getting a good re-mortgage deal more difficult for example.

It’s important to note that if you stop making contractual payments on debts it’s important not to continue using a bank account with a company you also have debts with, otherwise they have the right to take money straight from your bank account.

James
@natdebtline

When_the_going_gets_tough

You hve been given some good advice here. I am so sorry to hear of the tough times you have been through in the last few years. Getting some stability with your finances will help a great deal. Others have given you good advice about your debts. I can't tell whehther there is any negotiation possible in your tax credits overpayment but your local CAB could help you check. Alternatively read the download in the link below - COP 26 to check if HMRC are doing everything correctly.https://www.gov.uk/government/publications/tax-credits-what-happens-if-youve-been-paid-too-much-cop26
Good luck - there is lots of help out there - reach out for it.

enthusiasticsaver

Enigma80 wrote: »

Thanks so much. It's become really difficult and has made family life quite difficult, with arguments over money and stressful situations. We don't want the children to suffer, but I know the older one can sense tension and overhears us sometimes as he's asked us if we're going to loose the house and will we have to live on the street?

Unsecured debt like overdrafts and credit cards will not risk your home so you can reassure your son of this. The worst thing you could do is turn unsecured debt into secured. Speak to Stepchange or contact the credit card companies yourself with an offer of what you can afford.

He's only 7 and I feel that it's my fault the he now feels like this. I know he thinks about stuff a lot as he's that type of kid and goes quiet sometimes.

Everyone goes through difficult times and you have said that the initial cause of the debt was you losing your job then the tax credit fiasco. Hardly your fault. The best thing for your family is to get a handle on this and if you cannot meet essential expenditure like mortgage, utilities, food and travel to work costs then the thing that is reduced is unsecured debt. Ideally though you want the credit cards to freeze the interest so contact them.

We've only had the house since 2010 after we had to leave my parents following a big family row and had to rush out. Sometimes I feel like I'm just ranting and moaning when there's people out there dying and in much worse situations than us, but that doesn't help me feel that we've just had back luck after back luck.

We didn't get out son in to any school we wanted and were given a failing school even after appealing, my flexible working got taken away from me, leaving us to pay increased childcare fees, and my wife suffered through 5 miscarriages (in some way I think partly due to stress), in between which both of her parents died a year and half apart. I lost my job not too long after and found it difficult to get to work along with everything breaking down while I was unemployed, car, fridge, washing machine etc.

I would just like things to work out for a change, and not to have to worry about things too much. I know we're not the only ones and I feel like I'm just moaning for no reason.

Sorry.

I think you have certainly had some bad luck but things will look a lot rosier when you feel you are in some control over this rather than robbing peter to pay paul which is a common symptom of debt overload. Speak to stepchange or contact the credit card companies and your bank yourself. Post an soa here and send copies to your debtors so they can see what your financial situation is. No one wants to go to court as that will incur costs for you and make the debts bigger and no court will prioritise unsecured debt if you can show you are unable to meet the payments. Good luck and perhaps start a debt diary on the forum to get some advice and support on your journey.

System

Waving hello.
We recently started a DMP as our debts had got to the tipping point. I spoke to Stepchange and worked out a budget with them, but we decided to go self managed so I used the NEDCAB website to do this. The DMP thread is a very useful resource - worth reading through as much as you have time to do.
Basically you can stop paying now, just letting your credit cards /loans know that you are in financial difficulty and currently can't pay.
We did token payments for 2 months (£1 each creditor) - we were originally paying £450/month, now £150 a month. That does not mean we are saving £300/month, but actually our budget now puts money into things like car maintenance and emergency funds where it didn't properly before. Things still feel tight, but it is early days. I know I can adjust our DMP at any point to reflect what we can afford to spend. Our aim at the moment is to pay the minimum we can, and get a real handle on managing our budget and surviving day to day, and getting a good emergency fund to back us up. Then when I am feeling more secure we will up our payment a bit more. Currently our debt free date is 13 years off, but if we just increase our payment up by £50 /month we can shave years off this so it's all to play for.

It's definitely worth investing some time in your SOA and looking back over previous 3-6 months to make sure it's accurate. Numbers on bank statements don't lie, whereas I can optimistically forget too many small spends!

Have you thought about starting a diary on here? This has been one of the most helpful things I have done, and it's lovely to have fellow forumites to chat to. Joining challenges on here too helps.

There's no need to make any quick decisions about what you do now except to put the breaks on and stop payments.

Good luck.

chelseablue

Didn't want to read without replying, firstly well done for posting on here, there are some very knowledgeable and helpful people on here.


I'd also suggest getting the details of all your income and expenditure and posting your SOA, its amazing the ideas people suggest to trim your outgoings

Enigma80

Hi all, thanks for all the advice, I really appreciate it.

I did the online form yesterday during my lunch break on the Step Change site, but it brought up a warning over my fuel spend (£302/month). So I ended up speaking them over the phone. I need to go back online and correct some other figures as they just didn't add up (I'd been over estimating my spending) as according to the figures I was spending £300 more then I brought in a month.

They suggested I call CC's for the meanwhile and tell them I've spoken to Step Change and they should be OK about it. Barclays has frozen all activities for 30 days to give me time to sort myself out. I've got a few others I need to contact too.

I would have done stuff last night, but as I'd only slept 45mins the previous night I zonked out on the sofa when my wife went to put the kids to bed. She fell asleep in the bed with them.

We're both utterly exhausted mentally and it's been taking it's physical toll on us.

Thank you.

Little_Miss_Sunshine

Enigma80 wrote: »

Hi all, thanks for all the advice, I really appreciate it.

I did the online form yesterday during my lunch break on the Step Change site, but it brought up a warning over my fuel spend (£302/month). So I ended up speaking them over the phone. I need to go back online and correct some other figures as they just didn't add up (I'd been over estimating my spending) as according to the figures I was spending £300 more then I brought in a month.

They suggested I call CC's for the meanwhile and tell them I've spoken to Step Change and they should be OK about it. Barclays has frozen all activities for 30 days to give me time to sort myself out. I've got a few others I need to contact too.

I would have done stuff last night, but as I'd only slept 45mins the previous night I zonked out on the sofa when my wife went to put the kids to bed. She fell asleep in the bed with them.

We're both utterly exhausted mentally and it's been taking it's physical toll on us.

Thank you.[/QUOT

If it's easier just write to them all. I didn't want to speak to them so I just wrote. Remember you will get lots of letters once you cancel the dd's. They look scary but are just computer generated. Better to be prepared.
Maybe put your figures into the NEDCAB budget as well. I used this for our self managed dmp and it allows me to put in much high petrol amounts

sourcrates

Hi,

Realistically you will be looking at either a DMP (debt management plan) or an IVA (individual voluntary arrangement) depends on your SOA of course.

Make sure you pay priority bills first, unsecured credit payments come at the very bottom of the list.

paulindebt

I read this thread with interest as I am in a very similar situation. As scared as I am I now know I'm not the only one. Good Luck Enigma.

nkkingston

If you're over or under estimating your spending, get a couple of month's bank statements and categorise everything on them. That'll help you figure out what's going where, and whether high spends on certain things (like fuel, if you drive a lot for work) are reasonable.