Daughters in debt, we’re in shock, options?

ikesother

Hi all,
Need some pointers as where to access support and/or options.
Daughter just moved back home after splitting up from boyfriend after 2 years. Unfortunately, she’s admitted accruing debts, 3 x credit cards all maxed , 1x loan. She has a car on pcp, she’s had a next account, very, and klarna account which she’s managed to pay off plus an overdraft.
She is on medication for stress. 
We’re supporting her to pay her car as needed for work and not charging rent.
Shes currently meeting all minimum payments, but not eligible for any balance transfers. 
It would take years to pay off. Her current wage P/A is £24k, she works 6 days a week to afford payments but it is becoming increasingly difficult due to stressful nature of job.
Im thinking she/we need expert advice due to the amount of debt and what the options are.

Thanks in advance

Grumpelstiltskin

She needs to come on here herself. She is an adult and she needs to sort it herself.
Support her but don't what ever you do pay it off for her.

TheAble

How much debt is she in?

[Deleted User]

Have her fill this in?
https://www.stepchange.org/start.aspx

Personally I just spoke to the credit card company, cut up the card and agreed a way forward, but there are now all sorts of things like a 2 month breather. 
https://www.stepchange.org/how-we-help/breathing-space-scheme.aspx

sourcrates

Hi,

The links above are to the stepchange debt charity website, you can take that approach if you wish, but if you want options that may get her debt free, yet be kinder to her in the long run, then have her fill out this SOA instead -

SOA Calculator (stoozing.com)

Have her format it for MSE (when prompted) then post on here.

This will give us some figures to work with, which in turn gives her options to deal with the debt.

She can always go to stepchange to implement the process afterwards, but they are dedicated to getting the debt repaid ASAP, we normally recommend a process to follow first which is much better for you, but with the same end results.

ikesother

Thanks for all suggestions

fatbelly

Not a big fan of formal breathing space. It's just kicking the can down the road and causing everyone a load of work.

In your daughter's situation she could stop paying everything today(not recommending this) and nothing would happen for ages - probably six months before even a default, which BS doesn't stop anyway.

If she comes on here, engages and gives us a statement of affairs we have something to work with.

It's perfectly OK to treat the car payment as priority if it's needed and on 24k income and zero rent, council tax etc, she should be easily able to afford it without your help. 

The non-priority debts can have their own strategy which could be snowballing, dmp or dro ... or something else. We'll be able to give better direction when we see the detail.

enthusiasticsaver

The options depend on the amount of debt and how much available income she has.  If you are not charging her rent and helping her with her car then presumably she has a fair amount of disposable income but she really needs to do an soa and find out the interest rates she is being charged.  I would also say you should not pay it off for her and encourage her to come on here herself.  She is an adult so needs to take ownership of this. 

ikesother

Update
Daughter has contacted Stepchange for advice, who have gone through her budget. She doesn’t qualify for any DRO, IVAs etc as pays all her bills on time. Stepchange going to contact credit card companies to negotiate a breathing space due to mental health issues, and or reduce interest rates for a while to enable her to make some headway on paying it off.
She has reduced her overdraft, bank wouldn’t allow her to cancel for 3 months, she has a budget drawn up by Stepchange and will upload it to them each month, and is drawing cash out once weekly as spending money, no more card payments. She has begun eBaying unwanted items, and batch cooked meals for work. 
Things are looking brighter. 
Thanks for all suggestions 👍

sourcrates

ikesother said:

Update
Daughter has contacted Stepchange for advice, who have gone through her budget. She doesn’t qualify for any DRO, IVAs etc as pays all her bills on time. Stepchange going to contact credit card companies to negotiate a breathing space due to mental health issues, and or reduce interest rates for a while to enable her to make some headway on paying it off.
She has reduced her overdraft, bank wouldn’t allow her to cancel for 3 months, she has a budget drawn up by Stepchange and will upload it to them each month, and is drawing cash out once weekly as spending money, no more card payments. She has begun eBaying unwanted items, and batch cooked meals for work. 
Things are looking brighter. 
Thanks for all suggestions 👍

Paying her bills on time, or not, is not a qualifying criteria for a DRO, I don`t know why stepchange told you that.

At best she has managed to secure a temporary arrangement, I would say she still needs a long term strategy.

If at some point in the future, you can get her to post her SOA on this forum, we can advise how to qualify for a DRO, if that is indeed the right choice for her.

Because when this two month breathing space runs out, and it will do very quickly, there is no guarantee all her creditors will stop or suspend interest.

Good luck to her anyway.

enthusiasticsaver

It sounds like she is making some headway and  great she contacted stepchange.  Sticking to a budget is a good first step and hopefully the breathing space will enable her to make a plan.