I want to break free - the lyrics said it best!

elisaQ

Hi,

I'm currently on maternity leave & pay so the drop in income is noticeable. In addition to the baby, I also have two other school age kids. I live with my fiance (dad to all my 3 children) who has just recently finished a job and is currently seeking for work. He has a planned overdraft. 

After tax, NI, pension and student loan reductions my monthly income before maternity leave was £2000 a month. Now I'm only getting the statutory maternity pay. In addition we have just started to receive Universal Credit (waiting to find out our full allowance now that my partner doesn't have any income and I'm more than 6 weeks into maternity leave). Also our Child Benefit will increase slightly soon.

We're getting a reduction in council tax going forward and I've renegotiated our broadband and mobile costs. EDF who supplies our Gas & electricity agreed to a discounted rate due to our finances and we are on the cheapest rate. I've contacted our water companies for a reduction/help and waiting to hear back, as they have some schemes.

We shop mainly at Asda. I'm in process of finding out if my partner qualifies for JSA and our family for Healthy Start.

We rent a 2-bedroom flat privately at £735/month (SE England) and would like a 3/4 bed at some point soon but can't afford it. In addition to usual bills we are also paying back a car loan at £200/month.

I have joined the MSE Credit Club and my credit score is classed at excellent at 973, but according to the report my credit cards affordability and loans affordability are both VERY weak. My credit card debt is £7900 and I'm starting to run out of interest free periods so paying for interest now. I've been making minimum payments to each three credit cards but hoping to increase these. With my credit report scores in mind, should I apply for a new interest free credit card(s) to do some reshuffling? MSE Credit club gives me an estimated acceptance rate of 80% for some of the cards but I worry about only getting a low credit limit which won't help much and then it would also impact my credit score.

I've just input some of my details into a StepChange account to make a debt plan (waiting for Universal Credit amount before I input the rest) and the tool suggested Stepchange should apply for the Breathing Space scheme for me. Is there any downsides in doing so? I didn't find anything negative about it, but I want to be sure.

I really don't want to cut my maternity leave short but I worry about the debts and our finances. And I'm sick of carrying the debt around - I'd love to be saving for a mortgage instead!

Looking for some help and reassurance.

Thank you. 

sourcrates

Breathing space is an (official) new Government scheme, agreed with the debt charities and creditors, to give you a two month break from your non priority debts, not that long in reality.

Unofficially, you can impose a temporary break yourself, for as long as you need too really.

You just write and tell your creditors that things are tight financially right now, you are on maternity leave, partner currently out of work etc etc, so we can`t afford payments just now, I will update you further in 3/6/9 months, whatever suites you best.

The official scheme only gives you two months break, if you go it alone, you can take 6/8/10 months, a year, more if you need it, of course interest will accrue, but as long as you keep them informed, collection activity should be minimal.

There is nothing stopping you going down the official two month route to start with, then extending it yourselves.

Some creditors may sell your debts on, in which case more letters will be required, and you must prioritise essential payments such as rent/council tax/food/utilities etc.

Its your life situation as a whole you should be looking at now, how you can afford this new baby etc, not worrying about fictitious credit scores and balance transfers, which are at best, just a stop gap solution anyway.

Your credit file will be marked negatively, however its more important you having the day to day budget for yourselves and baby, than it is to be repaying non priority debt, that can wait until things improve for you, which they will.

There is no question that babies are expensive, I have 3 kids, and 2 grandchildren, so I know, focus for now on what is most important.

elisaQ

sourcrates said:

Breathing space is an (official) new Government scheme, agreed with the debt charities and creditors, to give you a two month break from your non priority debts, not that long in reality.

Unofficially, you can impose a temporary break yourself, for as long as you need too really.

You just write and tell your creditors that things are tight financially right now, you are on maternity leave, partner currently out of work etc etc, so we can`t afford payments just now, I will update you further in 3/6/9 months, whatever suites you best.

The official scheme only gives you two months break, if you go it alone, you can take 6/8/10 months, a year, more if you need it, of course interest will accrue, but as long as you keep them informed, collection activity should be minimal.

There is nothing stopping you going down the official two month route to start with, then extending it yourselves.

Some creditors may sell your debts on, in which case more letters will be required, and you must prioritise essential payments such as rent/council tax/food/utilities etc.

Its your life situation as a whole you should be looking at now, how you can afford this new baby etc, not worrying about fictitious credit scores and balance transfers, which are at best, just a stop gap solution anyway.

Your credit file will be marked negatively, however its more important you having the day to day budget for yourselves and baby, than it is to be repaying non priority debt, that can wait until things improve for you, which they will.

There is no question that babies are expensive, I have 3 kids, and 2 grandchildren, so I know, focus for now on what is most important.

Thank you very much. I really appreciate your response.

mark55man

I agree that babies (congratulations ) can be very expensive, but 3rd babies can be very cheap!!  Assuming you don't have to buy too  much from new.

Also £8000 on you cards etc is a big amount and you are right to be worried, but it's not a huge amount so I'm sure you can do this with some help from on here, and the fact that you have already flagged it as a worry when you have so much going on is a great sign.

People will want to have a look at your spending, and although that can be tough to type out people on here have lots of experience and every bit extra you can save will accelerate.  so you might want to have a look at https://www.stoozing.com/soa.php and think about that side of things  

Good luck from someone at the other end of the childcare and debt free journey