My struggle with debt

Rachbuka

Hi all, 
I'm sorry for the long post. 

Any advice will be greatly appreciated. I am really struggling. 

I live in Scotland. Currently on Universal Credit. Single mum of a 6yo. 

My debt is as follows: 
Amex credit card - £3300  (currently making minimum payments of £120 a month)
Benefit overpayment from 2015 - £1500 (currently making payments of £65 a month)
Outstanding car finance - £3000  (currently making payments of £104 a month)
Klarna - £330 (currently making payments of £28 a month)

My situation has recently changed and I went from earning an ok amount to claiming Universal Credit - and my situation is unlikely to change much in the next year or so. This is my first month of claiming UC and I have been awarded £400 😪 - this is because they have taken away my earnings from September which have long been spent on living costs. £400 won't even cover my housing costs for this month. I will get a full payment next month which I think will be around £1000. However, this month I will have to borrow/live on a credit card and will probably access the food bank. This just seems like a never-ending debt nightmare. 

I have contacted stepchange and what they offered is dealing with AMEX and Klarna only (which is great) but they will not include my car finance, nor the benefit overpayments, meaning I will still be paying that off at the normal rate. 

My idea is to ask as many of my creditors, and service providers, to reduce my payments. 

- phone Council tax and ask to make 12 payments a year instead of 10, make sure I am paying the right rate
- ask the broadband provider for a discount
- apply for a warm home discount
- ask my car financing company to reduce my monthly payments
- ask AMEX to freeze my card & interest and make a repayment plan with them
- ask Klarna to reduce my payments
- ask HMRC to reduce my monthly payments

I don't have a chance of getting a 0% credit card - I checked. I don't have a chance of getting a lower rent, the rate is already very low. 

Anything else I can possibly do to reduce my living costs and pay off those debts? 
I already don't buy takeaways, don't buy coffees/food out, I shop discounted food or shop in Aldi/Lidl, secondhand clothes, home appliances etc. 

I don't have any assets. 

Anything else I can do? Any help and advice much appreciated. Thank you

mumtoomany

I am so sorry to hear of your problems. You need to prioritise your important bills. Food heating and rent/council tax. If there is no money for debt this month, then don't pay it. Just write to each and explain your circumstances. If you haven't got it, they can't have it!
Look at food banks, Olio, and community pantries. Maybe give Stepchange a ring, i believe it's a freephone number. They can offer advice. Maybe put up a SOA on here so others can help with your situation, take care of yourself, mumtoomany.

tacpot12

I, too am sorry to hear you are struggling. You are already doing a lot of the right things, including talking to Stepchange.

I think you should probably be accepting the help offered by Stepchange, but you could also ask your local Citizens Advice to see if they can give you debt advice and will include the car loan and/or benefit overpayment. You should be trying to find a debt adviser that can ensure all your repayments are sustainable. If Stepchange won't do this, perhaps they are not the best for you.  
 
I would definitely be asking HMRC to reduce your payments. They might only reduce them to £30/month as a minimum, but every little helps. 

You might be eligible for a council tax reduction, and you be able to apply for a discretionary housing payment. This can help with your rent if the amount that UC is paying towards your housing costs (the Housing Element within UC) is not enough to cover your eligible rent.

You might also qualify for free prescriptions. This might stop your situation from getting worse if anyone needs prescription medication. You probably qualify for free school meals as well. 

One thing you probably shouldn't do at the moment is switch energy supplier, but if you are on pre-payment meter for gas or electricity, you should try to reserach whether switching to a credit meter could save you money.

Don't forget that crisis grants are available if some disaster strikes at home, such as a flood caused by a washing machine going wrong or a fire that destroys any of your property.

Best wishes