Housing & debt advice

elsien

I was wondering if you had considered a debt management plan, given that most of your debt outside of the mortgage is unsecured. However I'm not an expert so will leave it for those who know more about it to comment properly, hopefully later this evening.
With regards to the personal loan, that is a large amount. It is your choice how much you share about the reasons for that, but can I ask whether it was for something specific or whether it was more an attempt to consolidate other debts that you had built up? Your shortfall is comparatively small so if that repayment could be reduced then things may be more manageable.
Do you actually have the £300 a month your SOA says you should have to pay towards the debt, or is that evaporating somewhere else along the line?

sourcrates

Well you are a homeowner, so only two debt solutions are available to you, they are an informal "DMP" (Debt management plan) or a more formal "IVA" (Individual Voluntary Arrangement).

With 18k of debt, and approx. £300 per month, or thereabouts, of disposable income, both options are open to you.

Both would take around 5 years to clear the debt, so you need advice on which, if any, would be the better choice.

What you choose must be affordable, as 5/6 years paying it back, can be a very long time, things change, costs go up, never down.

Your other option is to sell, which may not be the best idea, getting on the property ladder is nigh on impossible for a lot of people, you really should choose a debt option, rather than the alternative.

Get advice on both, then its up to you, the remedies exist, you just need to pick the right one for you.

See what Fatbelly thinks about this.

fatbelly

Well, assuming the loan is just a personal loan and not secured against the property, then if you can't close the £80 gap and pay the contractual amount, then I'd default and set up a lower payment with the lender. I doubt Stepchange would take you on if it's just the one debt but it's easy (and has some advantages) to do-it-yourself.

I also wouldn't move - your rent and mortgage seem very reasonable.

I would expect your situation to improve as time goes on and would encourage you to save into a 'fighting fund' to eventually clear the debt.

I'm not a big fan of IVAs if there is another reasonable option.

Pixie5740

If it’s just you and your child should you be receiving money from the non-resident parent? 

Singlemum2704

Pixie5740 said:

If it’s just you and your child should you be receiving money from the non-resident parent? 

Yes, I should be receiving something from her ‘dad’ but he’s decided he doesn’t want to do that

gwynlas

You are not going to find somewhere cheaper than £300 per month to live, combined mortgage rent etc so do not think of moving. There are a number of charities out there besides Stepchange who might negotiate freezing the interest on your loan and negotiating lower payments if you cannot do this yourself.. Maintain communication with your loan company so that they do not involve bailiffs. Some people get caught out over small amounts by burying their head in the sand. Do not offer to pay more than you can comfortably afford and do not take on additional borrowing. I'm sure others here will come along and offer further advice. Once your child is in school maybe you can increase your income.

Jude57

Just to clarify, StepChange do offer DMP's on single debts so it's worth at least using their online Debt Remedy tool to check out what's involved.

As far as child support is concerned, OP have you raised a case with CMS? You don't need to answer here but if you haven't raised a case yet you could do so . Your child is the father's responsibility too and he should be contributing something, however small, to her living costs. Of course only you, OP, can make that decision and there could be good reasons for not rocking that boat.

Singlemum2704

Jude57 said:

Just to clarify, StepChange do offer DMP's on single debts so it's worth at least using their online Debt Remedy tool to check out what's involved.

As far as child support is concerned, OP have you raised a case with CMS? You don't need to answer here but if you haven't raised a case yet you could do so . Your child is the father's responsibility too and he should be contributing something, however small, to her living costs. Of course only you, OP, can make that decision and there could be good reasons for not rocking that boat.

Yes I have raised a case with CMS, however he still isn’t paying. Not that it’s an amount that will even make a difference tbf. 

The only reason I am considering this option is because I can get most of my rent paid through UC. If I had to pay the full rent amount then it would be something I would even consider. if I was to sell, based on some rough calculations I have done (I would need to do them properly once I have my next statement from UC through) I would have much more disposable income so I would be able to save each month with the view to hopefully buy again in a few years. 

I am going to wait until at least after Christmas and I’ve made all the calculations and considered all the options before I make a decision. I don’t want to rush into anything without considering all the pros & cons first 

Jude57

Thanks for sharing that @Singlemum2704 and I think you're wise not to make any rash moves.

I'd strongly recommend you seek advice on your whole situation from CAB. They are oversubscribed and it may take a while to speak to them but they can advise you on the numerous issues you have to sort out. In particular, the benefits situation, which worries me. Your SOA shows that you have over £60,000 equity in your home. That would put you well outside any means tested benefits and you'd be expected to use that to pay your living costs until your savings are below £16,000. You won't be able to protect savings over that while claiming benefits. Unless your equity is actually less than that? Even so, if you have over £16,000 in savings, you won't be able to claim and under £16,000 but over £6,000 means benefits are tapered. And of course if you voluntarily give up your job you could be sanctioned for up to 26 weeks.

That's just off the top of my head, and I'm not a benefits expert so please do get expert advice.

Singlemum2704

Jude57 said:

Thanks for sharing that @Singlemum2704 and I think you're wise not to make any rash moves.

I'd strongly recommend you seek advice on your whole situation from CAB. They are oversubscribed and it may take a while to speak to them but they can advise you on the numerous issues you have to sort out. In particular, the benefits situation, which worries me. Your SOA shows that you have over £60,000 equity in your home. That would put you well outside any means tested benefits and you'd be expected to use that to pay your living costs until your savings are below £16,000. You won't be able to protect savings over that while claiming benefits. Unless your equity is actually less than that? Even so, if you have over £16,000 in savings, you won't be able to claim and under £16,000 but over £6,000 means benefits are tapered. And of course if you voluntarily give up your job you could be sanctioned for up to 26 weeks.

That's just off the top of my head, and I'm not a benefits expert so please do get expert advice.

I own through a co-ownership scheme so they actually own half my house. Once estate agents fees & everything is paid off I would have little to nothing left from that and I would obviously need to provide proof that I’ve used the money for that purpose. 

I have already checked with UC that I would be eligible for my rent being paid and they have confirmed this for me. 

Like I said I won’t be doing anything until I’ve weighed up all the options over the next few months. 

I just don’t want to be in debt & stressed out for the next few years and have that have a negative impact on my daughter. 

Ultimately I just want to do why is best for her