Newbie - debt and feeling overwhelmed

trying2bedebtfree

I'm new so I apologise if this is the wrong board. I am in debt and it's making my mental health so much worse, I am really struggling.

I have issues with impulsive spending, related to my mental health, and also have a shocking tendency to lose/forget things. I've ended up in trouble with the council before for overpaid housing benefit, simply because I forgot to submit my change of circumstances evidence on time.

I also have over £7k of credit card debt split over 3 credit cards. These were impulsive, but I do obviously accept full responsibility for this. I received several letters offering an increase in credit, of course encouraged to think about if I could afford the increase before agreeing to it. Obviously I neither thought about it nor could I afford it but I took it out anyway, because it felt exciting to have more to spend. I lied to myself that I would be careful and use the credit cards only for emergencies and vet bills. They were used for vet bills but actually most of the credit was used to impulsively purchase clothing and other items I don't need.

I do have a debt management plan with StepChange and haven't fallen further into debt this year yet but I'm just so anxious and on edge the whole time. I have severe anxiety anyway, but this is exacerbating it.

Recently I had to get my debt management plan total decreased due to monthly vet treatments for one of my guinea pigs. I feel like somehow I am a failure because it will take 5 more years to pay off the debt. It feels like it will never be paid off.

I find budgeting incredibly difficult and overwhelming because I cannot concentrate, I get confused and numbers baffle me. I used the step change budget and Monzo to sort my money into pots which is helpful but I feel like I will never be able to manage my money. Kind of embarrassing for a 32 year old woman.

I work full time and am over the limit for benefits. I haven't had a pay rise, I work in the charity sector so didn't expect one anyway, and I'm not really mentally in a place where I can try and find a new job. 

 I live alone in social housing and I'm incredibly worried I will get into more debt with the increase in gas and electric because, well, I don't have anything to spare. I've made cuts to my budget where I can. If this impacts my ability to pay my DMP what will happen? It feels pointless working full time if I can't afford my bills. I've already cut everything and no longer have a social life because I have no money to spare at weekends. This in itself is depressing.

I've been rejected for PIP, and I don't have the mental energy to go through the appeal so that's that. If i felt mentally well enough I would take on a second job but as it is I barely feel well enough to manage my full time job because of my mental health.

Feel at the end of my tether, to be honest, and I guess I just want to talk about it to other people who might understand.

Debt is a lonely place.

RAS

You have unsecured debt and no assets.

If your living costs go up, your contribution to your DMP goes down. If it means the creditor get nothing, so be it.

They will have thousands, possibly hundreds of thousands of customers in the same situation this autumn. It will seem scary to you and most of the others, but to the creditors, it's just the same old but on a wider scale.

Now amongst that stuff you bought, is there anything that you can sell to build yourself a little emergency fund?

trying2bedebtfree

I sold it all already and put it towards my debt.

RAS

Well done. 

Are you still within the deadline for mandatory consideration of the PIP refusal?

trying2bedebtfree

No, the deadline passed a couple of months ago.

redlaces

Hey, give yourself a little break, you are far from the only person to struggle with debt, budgeting or mental health flare-ups. You are doing great and have done the right thing coming to this board - it's the first step. It definitely feels like a lonely place, but there are plenty of people here who know what you're going through, and the feeling that it will never go away.

@RAS is correct in saying that if your COL goes up, tough - the creditors will just have to get less money from you. They can't take what you don't have. Perhaps you could speak to StepChange about your worries? 

I don't know what advice to give you best, but the Monzo pots are a good start. Budgets and numbers are tricky, but once you have done it, you can set up a way to make it work, and you never really have to think about it again. The piggybanking method is really popular with a lot of DFWers because it's low-maintenance once you've cleared that first hurdle of working out what you have to play with each month. For example, my Monzo account is my spending money (food, fuel and fun) and my allowance for the month goes in on payday. I don't touch my main bank account where my salary goes, because I worked out at the start of my journey that if I take anything out of that account, it will make me go overdrawn when bills come out later in the month, which will give future me a big problem. So I exclusively spend out of my Monzo, and once it's gone, it's gone.

If impulses are a problem, think about some ways you could mitigate for that. Could you write a letter to yourself when you are well, detailing your goals and motivations and plan to be debt-free, and keep it somewhere safe to look at when you are unwell and at risk of spending? If I recall correctly there was a great debt and mental health guide on this very website - I used it a few years ago myself and it had dedicated parts for when you are well and parts for when you're unwell. If energy means you are only able to do one thing from this list right now, make it that one. (I would link it but I don't think you can add links, so just google "mental health debt MSE". 

If you would like some help on where to cut back, there are plenty of knowledgeable people around here who can give you tips on where to trim any excess from the budget.

Basically, hang in there, have faith and be strong - you can do it! 

RAS

Try Free Mental Health and Debt booklet - MSE (moneysavingexpert.com)

And remember to be kind to yourself.

If you fall off the wagon, when you pick your up, acknowledge, reject and move on.

World class athletes are those who cope with failure best. They will all have failed far more times than they have ever won. It's just that they keep going back.

sourcrates

Have you considered a DRO (Debt relief order) ?

You don`t say how much you pay to stepchange for the DMP, but I`m betting you could easily reduce the amount to below £75 by budgeting for categories you have not yet budgeted for in your SOA.

This would mean you may qualify, if you meet the rest of the criteria.

Also regarding PIP, you can re-apply at any time, you really need to explain how your condition affects you, concentrate on the procedures that score you points, try not to waffle, I understand it may be difficult for you, try and get a friend or family member to help you, you have to show how your condition affects your everyday life, not necessarily how it affects you.