I want to be Debt Free but I can't see the light

No_light

(Please excuse the layout etc of this post. It's my first one on here and I can't preview it or use HTML it would seem. Sorry, I did try but I can't)

Hi all .

I've been lurking on this website for a while and for just as long I've been trying to get out of debt but I don't seem to be making any progress so I decided it was time I posted in here to see what advice I can get.

I am single parent, self employed, on a VERY low income which is commission only (minus work expenses) and health issues (mental and physical issues which can vary from me being "normal" and able to do whatever I need or want, to wanting to stay in bed as everything hurts and even making toast is too complicated. I also am forgetting things more and more often.) which make it near on impossible for me to work outside the home. I'm not classed as being able to claim disability benefits as I'm still waiting on a proper diagnosis so feel I can't try claiming anything until a doctor can tell me what's wrong. I get working tax credit, "child" tax credit (for my teenager) and housing benefit. The idea of having a multiple streams of income while working from home (blogging, surveys, etc) scares the poop out of me and immediately makes me feel overwhelmed and confused. The idea of matched betting makes me feel physically sick.

The little money I do make at the moment disappears quickly on stuff like bus fare when I do manage to go out and can't manage to walk home again (I don't do taxi's, I don't drive, and I try to run all errands on one day when I buy a day bus pass for £4-£4.40 depending when I have to be places. If not the busfare is £2.10-£2.40 each way) or being given to my teenager to cover costs to do with school.

My teenager is in their final year of sixth form and will hopefully be starting university in September (they're staying at home and going to a local university in theory). I get child support from their dad but he will be switching to paying it to our teenager next September instead, or at least that's what was said last time we spoke about it. They are looking for part-time work but aren't having much luck. If they do manage to get one then they can start paying for everything to do with their dog instead of me paying for it!

This upcoming change of circumstances means I'm trying to get out ahead of things as I know I will, in theory, be loosing approximately £400 if not more income AND Universal credit is being rolled out in my area as well. This will leave me unable to pay anything towards my debts and possibly even unable to pay my bills or put food on the table.


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1 (They're 17 and heading off to uni soon but looking for part time work)
Number of Pets in household....1 (A dog for security reasons)

Monthly Income Details
Benefits................................ 1063.52 (Working tax credits, "child" tax credit, child benefit, housing benefit)
Other income............................ 230 (child support - ending next August)
Total monthly income.................... 1293.52

Monthly Expense Details
Rent.................................... 450
Council tax............................. 8
Electricity & Gas ............................. 84 (coming up to the end of my contract so I'm going to be looking for a better deal as I need the heating set to 18 degrees constantly over winter or my health deteriorates and I can't function properly.)
Water rates............................. 38.77 (I really don't want to swap to a meter as I take almost daily baths to help with the pain when my health is playing up)
Telephone (land line)................... 20.5
Mobile phone............................ 33.8 (2 mobiles - Mine is £6 a month for the phone and another £12.80 for the contact - this ends in March so I am looking at other tarriffs now. Then my teen has one which is £15 a month PAYG. We both use a lot of data but hardly anything else)
TV Licence.............................. 12.37
Internet Services....................... 18.51 (Currently with Sky but looking to swap as I need internet for work)
Groceries etc. ......................... 200 (this is a guesstimate. This is the MAXIMUM I'd like to be spending per month including toiletries, household & pet stuff - I've recently switched to doing 90% of my shopping in Aldi)

I have no insurance, no savings, and gifts for birthdays etc plus clothing and pet expenses at the vets etc get put on my credit card as a result.

Total monthly expenses.................. 865.95

Assets
NONE
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts - (Based on the last statement I received - I have made payments to these debts since which are shown. I always round the minimum payment up to the nearest £5 or £10 or have a minimum I will pay in the case of Argos)
Description....................Debt......Monthly...APR
Evans..........................1488.59...50........34.08 - This month I paid £100 This I am currently overpaying trying to clear it as it's my gifts/clothes spending and most expensive. But due to purchasing new necessary clothing for me this month I have probably spent a lot more.
Halifax........................3758.62...107.......24.7 - This month I paid £115 - should make a difference to the amount of interest I pay next month
Natwest........................4105.67...92........19.16 - This month I paid £100 - by my calculations I'm paying off stuff from 2013)[/I]
Overdraft......................2499......40........19.87 - This is my overdraft limit and I've been bobbing around it for years. I'm paying £6 a month for being in my overdraft and approximately £35 a month in interest charges.
Argos..........................520.......50........0 - Store card used to purchase stuff for the house on 6 months at 0% instead of using the credit card. I'm currently trying to clear various purchases on this before I start getting charged interest. - Payments are £0 but I want to pay at least £100 a month so I clear them before I start getting charged interest in December/January/March
Total unsecured debts..........12371.88..339.......


Monthly Budget Summary
Total monthly income.................... 1,293.52
Expenses ............... 865.95
Available for debt repayments........... 427.57
Monthly UNsecured debt repayments....... 339

Amount left after debt repayments....... 88.57

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,371.88
Net Assets.............................. -12,371.88

(Created using the SOA calculator at Stoozing. Reproduced on Moneysavingexpert with permission)

Both of my big balance credit cards have decided that they're going to increase my minimum repayments due to "perpetual debt" and I know that I can't afford that increase but I have no idea what to do about it. I just constantly seem to be robbing Peter to pay Paul as they say. Both of those cards were taken out when I was in a better financial state, before I became a single parent with health issues. Now I'm struggling to make ends meet. I have no idea what to do. I'm just finding it all confusing and overwhelming. I was trying to save £150 a month to cover all the expenses for school, celebrations, my national insurance payments etc but it just hasn't happened as I've had to pay out so much money to replace clothing which had worn out for both me and my teenager, plus some vet expenses for our dog that what little I did have saved has gone. Now I'm left 3 months before I need to pay my National Insurance contributions, with no money set aside for it so I'm going to have to put all the money I earn (minus work expenses) towards that and a school expense I know is coming up in January.

Can anyone give me some advice please?

natlie

Hi there

Just want to say hello in the first instance.

Have you thought about talkign to Citizens Advice Bureau? they would be a great help to you I am sure - maybe on one of your better days?

You may still save going on a water meter we pay £45 a month for 5 of us on a meter.

Its a worry that you have no insurance - what about home contents?

This will sound harsh but have you considered asking someone else to take your dog? maybe not permanently?

As you are on benefots you would be entitled to food bank, which if you didnt want to use yourself you could use for dog food

We have just been put on to Universal credit and have found the process good, helpful ans supportive with positive outcome, please dont worry too much about it - there are a lot of horror stories out there, I feel a lot is public perception rather than fact.

I am sorry I cant help you more than that but there are brilliant people here who can comment more

Nat

sourcrates

Hi there,


All those things you mentioned above which you don`t budget for, that usually ends up going on credit, you should now make provision for in your budget.


From a quick glance over your SOA, it seems there is a really simple solution for you, to me you are a prime candidate for a debt relief order (DRO).


You can easily make that budget show less than a £50 surplus at month end, you are not a homeowner, you have no car, and no assets, debt relief orders were designed just for people such as yourself.

You must apply through an intermediary such as stepchange or CAB, there is a £90 fee (no remission, but you can pay in installments) once processed and submitted its more or less a done deal, but can take a few weeks to be processed due to there popularity.

There is a 12 month moratorium period, you make no payments to your debts, and you have legal protection from your creditors, after the 12 months, your debts are wiped out, and you are discharged from all liability.


Do some research yourself, Google "DRO" see what you think.


Other debt solutions such as a debt management plan/IVA can be ruled out as you do not have sufficient disposable income (or you won`t have soon).


Bankruptcy for 12k is not an option either when a DRO is available.

January2015

I definitely agree with Sourcrates - adjust your figures and go for a debt relief order

queensnose7

Hi No_light,

I'm sorry that things are so stressful just now but I think there are various options available to you to clear your debt.

I am not religious and have no affiliation with the charity (neither does the charity require clients to be religious) but Christians Against Poverty can be amazingly helpful if you're in debt- they are able to negotiate with creditors to allow you to pay a much smaller payment each month.

A debt relief order (DRO) is another option BUT will leave a mark on your credit rating for six years. An IVA would leave a mark on your record too so a DRO would be preferable to an IVA.

Citizens Advice are very helpful too so if you can try to get in contact with them!

There will be a way through this so don't despair over the situation.

jbkmum

queensnose7 wrote: »

Hi No_light,

I'm sorry that things are so stressful just now but I think there are various options available to you to clear your debt.

I am not religious and have no affiliation with the charity (neither does the charity require clients to be religious) but Christians Against Poverty can be amazingly helpful if you're in debt- they are able to negotiate with creditors to allow you to pay a much smaller payment each month.

A debt relief order (DRO) is another option BUT will leave a mark on your credit rating for six years. An IVA would leave a mark on your record too so a DRO would be preferable to an IVA.

Citizens Advice are very helpful too so if you can try to get in contact with them!

There will be a way through this so don't despair over the situation.

Defaults will also leave a mark on the record, but with the DRO they'd be free of the debt.

dont_use_vistaprint

Hi No_Light

Some good advice above , especially the link to CAP, I have worked closely with them for a number of years and would definitely recommend them. His book is a great read too to cheer you up :-)

£12K debt is not a lot, some people have much worse situations. Other than the advice above I would say this. Invest in your own skills, increase your potential to earn more, use cash not cards and follow the 80/10/10 rule. Whatever you have little or lots, live on 80%, save 10% give away 10%, generosity and wisdom pay the best dividends.

I wouldn't bother with CAB at all.