Desperately need help

nigrub94

Hi all,

Finally come to the realisation today that I can’t continue the way I have and need to get out of the black hole I’ve found myself in.

Bit of backstory. I’m 22 and in my last year at university and in a complete financial mess. I live at home with my mum and commute to/from University and work. Everything was fine up until about 15 months ago when my dad unexpectedly left. Literally walked in from work one evening, went upstairs, packed his suitcase and told my mum he was leaving her & I’ve not seen him since. My mum didn’t work (I have a younger sibling) and dad earned enough money where she didn’t need to. Turned out, he hadn’t paid any bills for a while and cleared out their accounts & Mum had a complete mental breakdown.

Fast forward 15 months. My mum is now in work full time, but as she hadn’t worked for nearly 20 years she’s not earning great money (I think with uni + my job I earn about the same if not more than her), we split the household bills down the middle as otherwise we would be homeless. The house is mortgaged, but due to the financial situation my dad left her in her credit profile is pretty wrecked and the bank won’t re-mortgage or anything.

I spent all my savings & earnings to bring the household bills up to date for the 9 months she wasn’t working, but at the time I wasn’t getting nearly half what I get now so I took out whatever credit I could just to keep us afloat & not homeless, and now I’ve hit rock bottom.

I’m in a complete and utter financial mess, I’ve been signed off work for 4 weeks because I’m at my breaking point. It got so bad during the summer I was debating on offing myself so my Mum would receive my life insurance pay-out & be set.

Pretty much everything is on 0% balance transfer or purchases, but these are all set to run out in the next 1-2 months. I've applied for other cards or loans to reconsolidate and get declined. My mum knows the situation and has tried to apply herself to help me but has had no joy either.

I’ve posted my SOA bellow and would appreciate any help.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 880
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 600
Total monthly income.................... 1480

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 150
Rent.................................... 400
Management charge (leasehold property).. 0
Council tax............................. 50
Electricity............................. 40
Gas..................................... 10
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 0
Mobile phone............................ 55
TV Licence.............................. 5
Satellite/Cable TV...................... 25
Internet Services....................... 10
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 65
Road tax................................ 0
Car Insurance........................... 60
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc)....
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 10
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 130 (£30 per week to go out with my friends & I would go crazy/ended it all if I didn't have them)
Holiday................................. 0
Emergency fund.......................... 0
Overdraft .............................. 81
Total monthly expenses.................. 1358.4


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 9500.....(150)......7
Total secured & HP debts...... 9500......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax CC.....................650.......26........30
Halifax CC.....................3600......40........0
Halifax OD.....................3000......0.........0
Barclaycard....................1000......25........0
Very...........................3300......0.........0
Debenhams......................800.......30........30
MBNA...........................700.......25........0
MBNA...........................4800......50........0
Natwest OD.....................2000......0.........0
Total unsecured debts..........19850.....196.......-


Monthly Budget Summary
Total monthly income.................... 1,480
Expenses (including HP & secured debts). 1,358.4
Available for debt repayments........... 121.6
Monthly UNsecured debt repayments....... 196
Amount short for making debt repayments. -74.4

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -9,500
Total Unsecured debt.................... -19,850
Net Assets.............................. -29,350

(My car is on PCP, I literally got it a month before everything happened, and its on a 4 year deal. I don't think I can give it back just yet, and I need a car in some fashion to get to work and Uni as taxi + trains would be more expensive than the car costs I think)

sourcrates

Hi,

Does your income fluctuate at all ?

I was going to suggest debt relief order, but the car would be a problem.

Your budget is a bit frugal to be honest, not too much to be cut, in fact I could add to it.

I would say look at bankrupcy, but again, you would lose the car.

You don’t have enough disposable income for an IVA, and in the same vein a debt management plan would take forever.

Bankrupcy may be your only option.

nigrub94

Ideally I don’t really want to go down the bankruptcy route, it would completely destroy my credit profile and any hopes I have to go into the police (which is what I eventually want to do)

I’m graduating in July, and I live in the south east with a 30 minute commute to London. So, I would imagine my income may slightly increase next year if anything.

I haven’t spoken about my debt to anyone else in my family, my grandparents are in an ok-ish position (not to the point where this will all be cleared) but they may be able to help with Petrol costs or my insurance. If they were able to do this, and free up around £60/£80, would this change anything? Or would bankruptcy still be best.

For instance, if I were to go onto a DMP then I wouldn’t be paying £80+ in overdraft charges, it could actually go towards paying off my debt. Plus help from my grandparents, I’d have around £200/£250 to pay? Also, my sister finishes sixth form in June, and I believe she has an apprenticeship lined up, so she will be contributing to the household bills and therefore lowering my expenses, so I imagine that’ll help dramatically.

Arleen

You have to understand that the 0 rates on those CCs are going to end, and you won't be in a position to repay them beforehand given your SOA. As for DMP you have almost 20k GBP in debt, even if it will stop accruing interest and you manage to pay 400 a month towards the debt you are looking at almost 5 years to repay it. By that time the bankruptcy will be almost gone for good, and without you have to slave over all those years to repay all these monies.

And bankruptcy is not the end of the world as it may seem, in few years it will go away from your credit file while you gain a lot of breathing room. It also will not kill your chances of joining the police force, there are plenty of stories online to find where people even within a year of becoming bankrupt manage to join in. High level of debt as you have now will likely be as big if not bigger deterrent.

Wendy241

Have you considered applying to your uni for either an 'Adult Learning Fund' loan which (with my uni) could be up to £10,000 OR a bursary which does not have to be paid back.
Also, as you are trying to join the police force (good luck) and your mum is possibly less career ambitious than yourself, could she not take as many debts as possible and SHE go bankrupt, leaving you a positive credit rating?
There are local solicitors that offer 10 minute free sessions. They're usually held once a week and you have to book in advance with your topic for discussion. It may only be 10 minutes nut if you have all your questions written out ready, and you talk quickly you should be able to find a lot of I formation.
What about seeing the citizens advice? Though that's possibly time you don't have.
I think you should speak with your grandparents and accept any help you can get. Maybe suggest any financial support they offer is accepted as a liar. When you get into the force you can set up a repayment plan

Wendy241

Also, are there any other relatives who may be able to help out?
I wish you all the luck in the world and hope you, your mum and your sister manage to get through this. Don't be frightened of letting people know and hopefully help. None of this is your family's doing. Pride can be hard to swallow but sometimes it's necessary to bare all.
Good luck and for what it's worth, although you all probably miss your dad, you're most likely better off without him.

nigrub94

Thanks so much, obviously been a very difficult and trying time but hopefully will come out of it soon(ish)!

I’m going to speak to my grandparents today to see if they could help.

My mums credit rating is in absolute tatters so she’s not in a position to take on any of my debt - she’s already offered and tried to.

I hadn’t thought the university may offer any additional help as I receive student loans, but I’m going to book an appointment with them to see if there’s any additional support. I’m also going to phone StepChange within the next 48 hours, as all the bills that I pay don’t come out of my account, it just gets transferred to my Mum so I’m not sure how to prove what I pay etc.

But, whilst I didn’t get much sleep last night, I feel slightly better just getting this ball moving and off my chest. Thank you!

Jsnb88

What’s the situation with the house, is there any equity in it? Your mother can not afford to live in the house if you move out so would she not be better to try and downsize, pay off your debt (if they have come about from you keeping your family afloat) and maybe have cash left over??

nigrub94

There’s only a few years left on the mortgage (3/4 years max but I’ll need to check to be certain). I know my mum has looked at ways to help, but I’m not sure which avenues she’s looked at, so tonight we’re going to have a chat and see if there’s anything else can be done

elsien

How old is your younger sibling, and is your father paying any maintenance? Were your parents married and has any sort of financial settlement been agreed ref house, pension etc? This might affect any plans for the family to move forwards.

nigrub94

My sister is 17, 18 in July.

My parents were/are married. My mums currently trying to divorce him, but it’s extremely difficult when he’s basically dropped off the face of the earth and his family won’t say a word about where or who he’s with.

He doesn’t pay a penny in maintenance or anything whatsoever. Haven’t seen or heard from him since the day he left.

In regards to financial settlements, pensions etc. My mum worked for Barclays for 15~ years and will have a good pension from them, she’s 50 next year & I don’t think she can withdrawal money from it yet.