Not a clue what to do - 19k debt to deal with on my own

Hi - 

I'm a single mum who is really struggling with debt. I really fought at it a few years ago and managed to get it down quite a bit - I think it started at about 26k and I got it down to 15k - but in the last 12 months things have been put on the credit cards and the balances have crept back up. Because I closed a couple of cards when I paid them off, the ones I do have are pretty high in their utilisation. 

When I paid off a couple of cards a few years ago, it then opened up opportunities to get other cards on 0% deals, which reduced monthly payment amounts and made things easier. Those deals have run out, and probably given the high utilisation, current state of the world and the fact I got a mortgage 6 months ago, there are no 0% deals available to me, or even loans.

Currently my minimum payments are around £650 a month. 

I completed the Stepchange budget, they said I had about £420 a month available for debt and I could send that amount to them every month for 4 years to pay it off. 

However, I'm scared. What would happen to my mortgage? What would happen when I try to get a new fixed deal in 4.5 years time? What happens to my credit rating? What happens if my budget changes? Part of the reason I'm in this mess as because I wanted me and my kids to live a little bit and not just exist day to day. 

I work 32.5 hours a week, upping my hours only reduces my tax credits so I'm literally £10 a month better off, which is no help. I'm selling things I don't need but that money is currently going on essential work on my house. 

Any advice, please?


  • Penguin_Penguin_ Forumite
    1K Posts
    500 Posts Third Anniversary Name Dropper
    Firstly well done, it's never easy finally getting to this stage & seeking help.

    Other posters will be here soon to advise but in terms of the mortgage you should be ok if you aren't seeking extra funds & it's simply a move onto a new rate. My bank didn't check my history when I did this last year.

    It may be helpful to fill a budget here SOA Calculator ( & post the results so that posters can help you to see where you're spending money & where you can save so you don't end up just existing.
  • ellenvanellenvan Forumite
    103 Posts
    100 Posts
    Living a bit with small kids does not have to mean spending money - lots of fun stuff for little spends.
    Worth paying as much as you possibly can off the credit cards at this stage.

    Definitely do the SOA - which is basically a summary of your ingoing and outgoings - it can be enlightening to see it all in black and white.
    Nobody on here judges - they just make useful suggestions.
  • RASRAS Forumite
    31K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    A lot of kids are going to learn to live a bit more cheaply over the next few years, so yours will be in company.

    With a DMP, if your budget changes (fuel increases etc), you can ask for it to be reviewed and new payments set.

    You shouldn't have problems with your mortgage if you just re-mortgage with your current provider, as long as you keep up on the payments. And by that time some or all of the defaults may be settled anyway.
    The person who has not made a mistake, has made nothing
  • EssexHebrideanEssexHebridean Forumite
    16.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ⬆️ what they said! 

    Well done for seeing the problem and wanting to tackle it - if you get the SOA completed - it’ll be not dissimilar to what you’re already done - and format for MSE and paste it into here we can see what options there might be for you to pin down a few savings you might have missed. 🙂
    🎉 MORTGAGE FREE 30/09/2016 🎉
    SOA CALCULATOR (for DFW newbies): SOA Calculator
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  • sourcratessourcrates Forumite
    26.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    As a homeowner, the usual choice for problem debt repayment is a DMP, as insolvency is not an option, unless your debt was 5x what it currently is, then an IVA would be worth looking at, but not in your current situation.

    Mortgage lenders don`t usually credit check existing customers when they re-mortgage with their current provider, so that should not become an issue, hundreds of thousands of folks who are in debt management, also have mortgages, none report any problem`s I am aware of.

    All I will add to the already excellent advice given, is make sure your budget is workable, if Stepchange say you have £420, I would argue you should make it £350, re-work it to your advantage, and keep in mind, prices will only go up, not down.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • Rob5342Rob5342 Forumite
    456 Posts
    100 Posts Name Dropper
    I'm on a debt management plan after racking up £42k on credit cards. IStarting one feels intimidating at first and I was very apprehensive about it, but it's the best thing I've ever done and has completly turned things around.

    I just carried on paying my mortgage as normal. My credit file got a load of defaults so I couldn't borrow more or change mortgage provider, but they don't credit check when you switch deals so I just moved on to a new fixed deal when the old one ended. With a debt management plan you pay what's left after accounting for everything else, if your budget changes then you just pay less to your debt management plan. My petrol and energy costs went up so i just reduced my dmp payment accordingly. Initially I was worried about the response from my creditors, but it's actually a pretty routine thing for them and they just foze interest and took the payments. Some have defaulted and been sold to debt collectors, that sounds scary initially but again it;s just routine and I just carried on making the same payments no problem.

    How old are your children? If they are older you could get them involved in the budget a little bit so if they want to go out somewhere they understand that they have to choose carefully and wait until you've saved up.
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