Tough times ahead for me

Mr87

Hi, definitely do the SOA, it'll really help and you're going to need to do one no matter what the solution ends up being. Also, it's obviously feeling difficult right now but keep positive 👍 there will be a route out of this with you back in control. 

EimearF

You are better accepting the holiday with accrued interest than ‘defaulting’ as you will get a late charge.

Re Furlough your wife can ask him to rehire and furlough her - https://www.moneysavingexpert.com/news/2020/04/left-a-job-after-28-feb-and-new-job-fell-through--you-can-be-reh/  Read Martin’s advice in the link. I had to make a fuss to get furloughed because I’m zero hours but it worked eventually. Martin has a page in there explaining the scheme to small businesses and how it costs them nothing. 

This is worth pursuing as it’s a big loss of income to you.

Bizzywizard

Have you spoken to your bank to see if you can get an interest free overdraft, just to tied you over? Better than defaulting. Has she applied for Universal Credit?

Fireflyaway

Personally when I couldn't keep up with my credit card repayments ( one of the was vanquish) , I decided to default on them . Yes my credit score went down but if you don't need a good score then defaulting and entering into a payment arrangement might be a good plan. Do you really need to protect your credit score? If not then default and arrange a repayment plan. Paying for food, heat, light and housing is a priority above paying a credit card. I agreed to pay a few pounds a month Until I got back in my feet. It took so much pressure off. Having a bad credit score didn't hold me back. I already had a house and car so it made no difference. 

sourcrates

All well intentioned advice above, however, payment holidays will continue to accrue interest, as you are aware.

The money currently, will have to be repaid on their terms, and your financial position, is at best looking shakey, anything other than full minimum payment, will attract late payment markers, and a £12 charge every month, eventually this will lead to default anyway, the idea of taking on an overdraft as well as the debt you currently have, is just another recipe for financial disaster, further down the line.

To be brutaly honest, your credit file is not your number one priority right now, you have a very substantially reduced budget, and you need to make it balance, any unsecured credit debt is a non priority debt, and is paid last of all when financial crisis strikes, any debt advisor worth their salt will tell you that, first and foremost, they are non priority, and do not matter in the grand scale of things, due to the fact the very worst outcome is a CCJ ordering affordable payments (according to your budget) so why bother to struggle ?

It makes no sense at all does it !!

Much better, in your circumstances, to default, it will benefit you in many ways.

(1) You will be less stressed not trying to find the money.

(2) Once defaulted, all interest and charges will stop, forever.

(3) You will have 6-8 months min, before your debt is sold, then another similar period before the new owner gets serious about payment (every collector runs through a series of standard collection letters with everyone).

(4) You decide how much or how little you can afford to repay, debt collectors/purchasors are remarkabley flexible at times.

Your credit file is going to suffer anyway, as you cannot afford the min payments, much better to be in control of what happens, and guide events in your best interests, than just trusting it will sort itself out.

Credit files heal complteley every 6 years usually regardless of what you do.

BigMart64

Thanks very much for the advice so far.
I've had a go at the SOA, it doesn't look good.
My wife is panicking at the moment as she's under the illusion that the minute I default, the bailiffs will come knocking.
My salary is very much up and down, sometimes £1350, other times 2k, depending on overtime/out of hours emergency work.
Anyway, here's the SOA, be gentle folks.
[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 1550
Partners monthly income after tax....... 62
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 1612[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 403
Management charge (leasehold property).. 0
Council tax............................. 145
Electricity............................. 60
Gas..................................... 60
Oil..................................... 0
Water rates............................. 34
Telephone (land line)................... 62
Mobile phone............................ 20
TV Licence.............................. 13
Satellite/Cable TV...................... 12
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 100
Road tax................................ 21
Car Insurance........................... 41
Car maintenance (including MOT)......... 60
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 14
Life assurance ......................... 0
Other insurance......................... 3
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 1318[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0[b]
Total Assets............................ 2000[/b]
[b]
No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Capital One ...................1075......32........26.4
Lloyds Credit card.............1320......51........18.5
Vanquis credit card............3829......224.......39.94
Barclayloan 2..................6469......268.......19
Barclayloan 1..................1083......41........19
Aqua credit card...............5703......264.......41.92[b]
Total unsecured debts..........19479.....880.......-  [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 1,612
Expenses (including HP & secured debts). 1,318
Available for debt repayments........... 294
Monthly UNsecured debt repayments....... 880[b]
Amount short for making debt repayments. -586[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 2,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -19,479[b]
Net Assets.............................. -17,479[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

EimearF

As sourcrates says you will need a DMP so based on your SOA you should default. 

Even with your wife’s pre ious income you aren’t breaking even. BigMart64 said:

Partners monthly income after tax....... 62

Council tax............................. 145 - is this over 12 months? If not see if you can switch it 
Telephone (land line)................... 62- this is high switch or negotiate with supplier - I assume this includes internet?
Satellite/Cable TV...................... 12 - what’s this for? Netflix? Switch to lower package
Car maintenance (including MOT)......... 60 - are you spending £720 a year on car repair?
Medical (prescriptions, dentist etc).... 20 - can you wife apply to get free prescriptions given She isn’t working?
Contents insurance...................... 14 - you can get this cheaper 
Haircuts................................ 10
Emergency fund.......................... 0[b] - you need to factor £50 a month here at least 

You can make some savings on your SOA but not enough to cover all the debt minimums. 

Keep trying to get your wife furloughed it’s money you could be saving to settle the accounts.

BigMart64

The council tax is over 12 months.
Telephone is with BT and is for internet as well.
satellite/cable is for NowTV
I knew I couldn't complete the SOA without making a mistake. I budgeted £40 for the MOT and £20 per month for repairs, but sadly added the MOT cost in every month. It should read about £25 per month.
My wife's ex boss definitely will not furlough her.

EimearF

You did a very comprehensive SOA. It’s very easy to miss minor bits like that. 

£62 a month a lot for BT telephone and internet - try ringing them and haggling.  Are you making a lot of calls above you base package? Ring now tv and say you are thinking of leaving - my father in law pays £3 a month now for the entertainment package. 

Has he given a reason why no furlough? It’s very poor form on his part, the government have made it clear employers can temporarily rehire for furlough purposes. I hope he either catches himself on or  you wife gets PIP or another job. 

BigMart64

Her ex employer is adamant the furlough scheme is just a government loan and he would not be able to repay it. He has told my wife that he has taken advice on it.
My wife already gets the basic amount of PIP, and she's looking for another job.
We got caught out by BT, they changed a lot of things which automatically signed us up to another 18 month contract. I'm not sure how long it's got left but I'll try and look into it.