Dont know what to do!

Izpeb14

So here is my situation, debts of around £ 22,000 which I am paying off by DMP (will take another 11years) I currently work but am struggling to manage and have taken out 3 payday loans (stupidly!) which I now find I cant repay. I think bankruptcy is probably my only option but I'm really scared, my car is on a monthly hire agreement will this have to go? will my sons computer and games consoles be taken? what happens to mobile phone contracts? I think my mental health is suffering Im already on anti depressants but I'm constantly in a state of worry and panic, anyone got any advice please.

MrsTinks

First things first: Deep breath!

It's only money. Seriously!

Health first: if you feel it's getting too much then don't forget there is always the Samaritans to talk to. They are great at listening!

Have you spoken to your DMP provider? You won't be the first and you won't be the last that has "fallen off the wagon".

No people won't just turn up to grab your sons consoles and games. Firstly he's not the debtor, but secondly a creditor cannot "just" turn up at your property. Things have to go through court for debts where a CCJ has to be issued. You will have a chance to explain how much you can afford to pay each month and only if you default on this will you get potentially to a point where bailiffs get instructed. They can't break in for consumer debts so you would need to let them in or leave a door open and they would need to "take possession" of your goods on paper first. It's not a 5 minute process and you will have ample time to defend everything at several stages. SO please put this one out of your mind.

The payday loans can be added to your DMP. IF you have needed them do you understand why? Was it a fall off the straight and narrow or did your budget not allow you enough breathing space to actually afford to live and have emergency cash for things like boilers breaking down etc? If so then you need to get it adjusted. Again this happens all the time.

Bankruptcy COULD be the right way forward for you. However I'm not sure if you should make that decision until you are feeling better in yourself. It can however be the ideal solution for a lot of people. If you have no assets and don't own your property and are not likely to come into any money in the next few years then it may well be that it's the best path for you.

National_Debtline

Hi Izpeb14 and welcome to MSE,


Bankruptcy is a big decision so I would always suggest full advice from one of the free charities before doing this, so you know all the in's and out's of it. It is a much more streamlined process now as it is all done online, so there is no need to go to court.


If you have debts over £20k and it will take over 10 years to pay back, then bankruptcy may be more suitable than a DMP. If you have taken out payday loans since starting your DMP, there could be a concern about the general affordability of your household expenses. If your car is on hire purchase then it could be at risk in bankruptcy. The agreement will be included within the bankruptcy but sometimes the company may 'honour' payments to let you keep the car, however, this can get complicated fast, so you will need more personalised advice.


It is very rare that household assets will be considered in bankruptcy; typically it would be big things like cars, property, savings, shares etc. I would suggest you post a Statement Of Affairs to see if this would suit you or whether you have other choices as well.


Laura
@natdebtline

Izpeb14

Thank you for the replies, I think a conversation with my DMP provider will be my next call. Its because I feel so ashamed that I've been burying in my head on the sand

sourcrates

Izpeb14 wrote: »

Thank you for the replies, I think a conversation with my DMP provider will be my next call. Its because I feel so ashamed that I've been burying in my head on the sand

Happens to the best of us I can tell you.

But there is always a solution, for example, once your debts get below £20,000 would you qualify for a debt relief order ?

I think an up to date tally of what you do owe may be helpful.

EssexHebridean

As Laura says above - a SOA (Statement of affairs) sounds like a good starting point for you. Mrs Tinks touched on the question of why you needed the Payday loans - and that really is the crux of it before you make any decisions - you need to understand your financial decisions, and have a proper budget not only in place, but also in use. Get out your last 6 months bank statements (or pull your online banking up) and go through everything to make sure you don't miss anyway. If your budget includes - for example - £50 into your Emergency Fund each month, you must make sure this is set aside - having a "cushion" of money to fall back on if the hoover breaks, or the washing machine needs repair, is invaluable, and will potentially stop you needing to go the high-interest rip-off loan route in the future.

If you post the SOA on here people will happily help you make decisions about where any savings possible c an be made, and also tell you where it's not realistic as you're underalllowing - that may be where your problems are arising from.

Izpeb14

Thank you, I'm on it will post it once done

Izpeb14

So here goes any advice much appreciated.


Money in
]Wages 1705
Child benefit 88.2
£ 1793.2
Expenses
Rent 465
council tax 77
gas /elec 60
electricit 60
car payment 209
dmp payment 168
car insurance 48
life insurance 10
pet insurance 34
pet practice plan 30
mobiles (Mine and my Sons) 63
sky 88
food 300
Tv licence 13
petol approx 60
appliance insurance 11
presecriptions 16.8
£ 1712.8

Debts
Debt already under dmp 22000
loan 2200
pay day loan 1 £ 1132
pay day loan 2 £ 1104
pay day loan 3 £ 64
£ 26500


[/B]debts don’t include car loan of £ 209.00 per rmonth for 5years

MrsTinks

It looks like there is plenty of places you could cut back in your spending, but you have run up quite a lot of additional debt since being on your DMP.

Where these due to emergencies arising (emergency vet bills, cooker blowing up etc)? Or do you know where you went wrong, like is this gambling debts or was it just bits and pieces because your budget was wrong? It's really important to understand this to suggest how you best move forward to be honest. It's not to judge you on (after all we don't know you, and there are many people on these boards with problems like gambling or other addictions like shopping - it's just important that we try and direct you in a holistic way).

Bankruptcy is an option - you will need some professional advice though, however if you haven't gained control of HOW you ended up here then it might not be the solution you need.

The good news is that you could make some serious cut backs in your budget (£300 for two people a month for food can definitely be reduced, your utilities are high, Sky can definitely be reduced and you can probably cut back on the mobile bills too) - however this is where it may be a fine balance as you need to weigh up your health with a DMP. If you think that it is going to have a seriously detrimental effect on you to be on this DMP vs going bankrupt then that needs to be added to considerations.

Please do read the MSE guide to Debt and Mental health, not everything will apply, you may think none of it does, but worth a read any way

MSE Guide to Debt and Mental Health

sammyjammy

If you are paying out nearly £17 month on prescriptions you should consider a Prepayment card at £10.40 per month

sourcrates

sammyjammy wrote: »

If you are paying out nearly £17 month on prescriptions you should consider a Prepayment card at £10.40 per month

Yes great idea, you get unlimited prescriptions as well under this scheme.

Available here :

https://apps.nhsbsa.nhs.uk/ppcwebsales/patient.do