Headspinning! Please help this terrified and confused newbie

TopsyMum

Hi everyone.
I posted on the DMP support thread when I first came on to DFW but feel it will now be better to post my own thread.
I did take advice I received on there and have read through a lot on here and that is why my head is spinning! I can't decide what is best to do and keep going backwards and forwards as to which is best!
Stepchange debt tool said bankruptcy was best and my initial reaction was nooooooooooo which is how I found myself looking at a DMP. But the more I look around the more undecided/unsure I am.
I have in the region of 25k debt,a mixture of a loan,credit cards,store accounts and sofa and carpet on finance deal.
My life really changed and unravelled somewhat in the last 18 months and particularly the last month where I now lose my income - this had made me really take a look and realise I can't go on as I've just been using these cards and loans to cover the cracks for when things improve but now I don't see that happening for at least 5 years (had a baby 6 months ago and had to hand notice in last month at work as due to circumstances returning is really not possible at all and believe I spent weeks trying to sort it)

I have been until last week receiving maternity allowance at 440 a month but this has now stopped,this was how I'd been making payments along with the juggling until now.

I would really appreciate advice as to what is best and I will get stuff together and post an soa to pick through but I know I have a shortfall.

I do have questions though if anyone could help?

I've cancelled my direct debits to creditors as advised, do I now just send a letter stating financial issues and looking at options and will pay token payments?? How do I actually pay them these token payments?

My second largest debt is with Barclays , I bank with them. I do though have a joint basic account elsewhere with my partner that we set up last year but haven't really used as yet, am I best switching all banking and essential direct debits to there?

Wether bankruptcy or DMP will it matter or will I get in trouble that most of this debt is within the last year-18 months? And some very recent like cooker broke last month so got new one on Argos card as was only way I could :-(

Bankruptcy scares the hell out of me for things such as bank account getting blocked - how do I pay rent etc before new one opened? Also my mobile phone contracts, I understand I can no longer have these? How do I deal with that as tied in for a year and not long renewed my sim onlycontracts(me and my children's)?

I'm a council tenant, could they kick me out??

I've never missed a payment although this has meant building my debt as I just end up robbing one to pay the other.
My rent, council tax, electric, water etc are and always have been up to date as this is one thing that terrifies me to get behind on,but again it's just shifting, juggling and building that debt.

Sorry if this doesn't quite make sense and I'm sure I will have more silly questions but I really would greatly appreciate any help and advice as I'm determined to sort this and can't believe I've been so silly.
I'm so scared but one of those annoying people that need to know exactly how things work and what I do before I can calm down and get on.

TopsyMum

My partner works and has his own financial commitments ( maintenance payment,car etc) and earns 1100 but gives me 550 housekeeping so to speak so I include this as his income to show I get it.

Mobile at 60 is for me and my children's phones.
Entertainment includes fees for children's things.
Says 3/4 children because I have 3 here permanently and another here half the week and half the holidays.
Other income is maintenance but this Could drop.
Benefits are my child benefit and tax credits, again likely to drop within the year.

font=courier new]Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3/4
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 550
Benefits................................ 736
Other income............................ 350
Total monthly income.................... 1636

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 360
Management charge (leasehold property).. 0
Council tax............................. 153
Electricity............................. 56
Gas..................................... 56
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 25
Mobile phone............................ 60
TV Licence.............................. 13
Satellite/Cable TV...................... 75
Internet Services....................... 25
Groceries etc. ......................... 500
Clothing................................ 75
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 66
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 75
Buildings insurance..................... 0
Contents insurance...................... 11
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 35
Haircuts................................ 30
Entertainment........................... 50
Holiday................................. 25
Emergency fund.......................... 50
Total monthly expenses.................. 1800


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

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco loan.....................11400.....194.......18.9
Barclaycard....................6500......155.......0
Tesco credit card..............1100......40........21.9
Scs (creation).................2050......57........0
Jd Williams ...................125.......7.........39.9
Next account...................350.......15........22.9
Total unsecured debts..........21525.....468.......-


Monthly Budget Summary
Total monthly income.................... 1,636
Expenses (including HP & secured debts). 1,800
Available for debt repayments........... -164
Monthly UNsecured debt repayments....... 468
Amount short for making debt repayments. -632

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -21,525
Net Assets.............................. -21,525

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.[/font]

sourcrates

Hi,

As a first step, if you cannot afford your unsecured credit debts, then yes stop paying them, you have taken the right course of action.

You write to each creditor, explaining your situation, that right now, you cannot afford to pay anything, you will automatically get 30 days grace to sort out your affairs.

Token payments are a waste of time at the moment, forget them for now.

Credit debts are all non priority debts, which means you never pay them over and above your essential debts such as rent, council tax, food etc.

Just a quick glance over your SOA tells me you have no real disposable income with which to do a DMP, you may be able to fettle some of the figures down, but not enough to make serious long term offers to your creditors, and if the financial situation is set to get worse, then your options further diminish.

If you can pay £1500 off your debts, over time, getting them under the 20k threshold, you may qualify for a DRO, otherwise you do not have sufficient funds to repay anything.


Your stark choices are either to ask your creditors to write off the debts as you have no means to repay them, (70/30) in their favor that they will comply, or you could just tick along, pay them all £1 a month, and see if circumstances change in the future, or you can take the Bankruptcy option and put it all behind you, it won`t affect your tenancy by the way, and you will not have to appear in court, its a much simpler, more streamlined process now than ever before, all done by phone and post, there is the £680 fee to find though, but it can be paid in installments over 6 months if that helps.


Lots of thinking for you to do.

theoretica

Yes, change your bank account to a basic account with a bank that is not linked to any of your debt. You don't want to bank with a company that you are not paying back.

zippygeorgeandben

£75 for Sateillite? That needs to go. £25 for the internet? £25 for telephone? I don't understand £125 for basically the same thing? Then it's £50 entertainment per month? I think you need to make some bold decisions here.
It does seem though through reading your post that you acknowledge that things need to change so that's positive. As you do not have any income now, you need to adjust your mindset accordingly, hence reduce these 'wants' listed at the start of my post.
Good luck.

Karonher

Groceries can be cut as well. During the next few months it should also be possible to cut back gas and electricity. Is that right about pet insurance? That is a lot a month. Including what has been mentioned above, you should be able to save over £300 a month.

Can you look for something part time or can your partner work more hours/take a second job while you pay it off?

Mnd

And your share of the outgoings is more than 550 that you get from your partner,do they pay for anything else

Mumoffourkids

I just wanted to add that you could decrease your food bill. I have six kids, the youngest two are in nappies and I only spend £433 a month on food, toiletries and cleaning stuff. It is doable. Also I don!!!8217;t know if it is the same in your area but in mine, if you have three kids under 19 and get certain benefits then you can apply for a special water tariff which is capped at a certain level and even if you use more water, the water company won!!!8217;t charge you more.

Your benefits look low as well for the number of children and level of income. Are you sure you are getting everything you are entitled to?

tallyhoh

I realise your OH may have debts also but they should be giving you more than £550 when 50% of expenses is £900.

I think that's for the future though, Sourcrates has given you some good advice above.

TopsyMum

Karonher wrote: »

Groceries can be cut as well. During the next few months it should also be possible to cut back gas and electricity. Is that right about pet insurance? That is a lot a month. Including what has been mentioned above, you should be able to save over £300 a month.

Can you look for something part time or can your partner work more hours/take a second job while you pay it off?

Groceries was the first thing I locked onto after posting and sitting to pick through it! Think I could easily get £100 - £150 off straight away then look into more by trying menu planning, more effective shopping etc and work on it.
Gas and electric yes I could save the next few months but then I'd be hit with a big bill over winter, this monthly d/d means I pay the same every month and I don't need to pay more over winter it's worked this way for 15 years for me.
Pet insurance is the insurance and healthcare plans for 3 cats,a dog and includes all yearly jabbs,flea and worm treatments etc,
I can't look for part time at the moment, although I do actually still look for something that would magically work but after having my baby 6 months ago I couldn't keep my job due to childcare no longer working and I'd actually barely have been earning anything when tax credits and everything taken into account.
My partner no,just no,he's only just returned to work a few weeks ago after a horrific year for us with him battling cancer and having 3 big ops ( which is responsible for a lot of this situation but I'm not here for those gory details and sell a sob story)

zippygeorgeandben wrote: »

£75 for Sateillite? That needs to go. £25 for the internet? £25 for telephone? I don't understand £125 for basically the same thing? Then it's £50 entertainment per month? I think you need to make some bold decisions here.
It does seem though through reading your post that you acknowledge that things need to change so that's positive. As you do not have any income now, you need to adjust your mindset accordingly, hence reduce these 'wants' listed at the start of my post.
Good luck.

I've phoned up virgin and although locked in I have managed to get £25 a month off my bill.

The entertainment as stated in original post is mainly for children's things such as guides/rangers which I would be reluctant to stop as I think it's good for them and they love it but acknowledge that I could and I can cut by £20 anyway so nothing for us.

TopsyMum

tallyhoh wrote: »

I realise your OH may have debts also but they should be giving you more than £550 when 50% of expenses is £900.

I think that's for the future though, Sourcrates has given you some good advice above.

He has debts yes and a maintenance payment as well as he has a car which he pays for (insurance high as new driver but this will obviously fall over subsequent years) and petrol and all associated costs. He could possibly give me an extra £50 though. He only earns 1100 so gives me half his income leaving him with little for daily expenses etc but that's the £50 he could give me