Help. £2190 over £30,000 DRO Debt Limit

PHEB1

Hi All 

New to forum. Would really appreciate some advice. 

Been struggling with debt for a couple of years. Personal and business ( sole trader). Business really has collapsed due to my mental health challenges. Mental health challenges got worse due to covid and economic crisis effect on business. Chicken and egg senario. I maximised my credit cards trying to save business! Anyway I have come to realise I can't look after myself and resurrect this business. I've resigned myself to closing business. Debt are credit cards £24,000, bounce back loan £4300, PayPal credit business £2100 ( sole trader).

Joint Debts are personal loan with husband £890.

Council tax arrears £900.  

***** Note: husband is unaware of devastating state of my business and mental illness. We are on the brink of separation. It's make or break. Can't deal with telling him this now. ( No judgement please. Marriages are complicated and can't be explained in a few lines. Just need to gain my financial bearing and get on my feet. My self esteemed has suffered a lot. If he leaves I need to be able to stand on my own for myself and my kids. 

All this background is also to say that I am over £30,000 limits by approx £2190.  

I have made lots of mistakes as they say..robbing Peter to pay Paul.

Some credit cards I only pay £1. Some were very stressful so I pay them more. My anxiety is too high. Couldn't fight them. I'm all over the place as I said my mental health challenges have affected my decisions . 

** I am getting help from IAPT, seeing a therapist in the last 2 months after 10 months wait for help. Gp referred me to a small debt charity. 

** Gp completed Debt mental health form today so I can give to creditors. 

** 2 Friends who i helped in better times,  have raised £1500 as s gift to help but that still leaves me over the DRO limit. 

*** I'm also concerned about which creditors to pay that money towards to get under DRO limit. I am already in a mess with not paying them all the same. Still trying to find the remaining £690. 

**The joint Debts for council tax and loan are paid by my husband but have my name on them. They are pushing me over limit. Is there no way to keep them off. I'm not paying them but I can't get my name off them.

**** can I do DRO WITHOUT spouse knowing. Again no judgement please. Trying to find a way to get through this crisis, in the meantime to start my life over.

Apologies I  have given more details for context than I ever imagine  I would when I started typing.  Thank you for taking the time to suggest any information that may help me find solutions. 

sourcrates

You might not need a DRO.

If you write to your creditors explaining your mental health issues, the downturn in your business, and how its all affecting you, and your ability to pay your debts, etc etc, and ask for your debts to be written off, you maybe surprised by their response.

Affordability is key these days, and a few posters going through similar situations to yourself, have had tens of thousands of pounds of debt wiped by their creditors by doing just that.

You have the GP completed mental health paperwork, so make it work for you, be sure to ask them to write the debts off, they may say no initially, in which case you make token payments of £1 a month each to them, every time they ask for an update, you tell them the same thing, you should get the result you are after.

fatbelly

I agree. Go for write-offs, which is the main use of the DMHEF

Review your options in a few months.

Don't focus on paying debts down and don't waste your friends' money

If you don' t qualify for a DRO you can go for bankruptcy

RAS

Another one to say, please just stop paying now. The sooner you trash your credit record, the sooner it will recover. Put any money you have towards clearing the Council Tax debt. Then put the rest into an emergency fund.

Then come over to the DebtFreeWannabee forum and read the threads about debt write offs. Several people have cleared similar sums.

PHEB1

sourcrates said:

You might not need a DRO.

If you write to your creditors explaining your mental health issues, the downturn in your business, and how its all affecting you, and your ability to pay your debts, etc etc, and ask for your debts to be written off, you maybe surprised by their response.

Affordability is key these days, and a few posters going through similar situations to yourself, have had tens of thousands of pounds of debt wiped by their creditors by doing just that.

You have the GP completed mental health paperwork, so make it work for you, be sure to ask them to write the debts off, they may say no initially, in which case you make token payments of £1 a month each to them, every time they ask for an update, you tell them the same thing, you should get the result you are after.

Thank you so much.

PHEB1

fatbelly said:

I agree. Go for write-offs, which is the main use of the DMHEF

Review your options in a few months.

Don't focus on paying debts down and don't waste your friends' money

If you don' t qualify for a DRO you can go for bankruptcy

Thanks I Don't take your time for granted. 

PHEB1

RAS said:

Another one to say, please just stop paying now. The sooner you trash your credit record, the sooner it will recover. Put any money you have towards clearing the Council Tax debt. Then put the rest into an emergency fund.

Then come over to the DebtFreeWannabee forum and read the threads about debt write offs. Several people have cleared similar sums.

Really appreciate your advice.  Thank you.

PHEB1

Fatbelly , sourcrates and Ras .. Thank you. 

Thank you do much for your response. It has taken me so long to get my anxiety subdued to be able to write this.

Really want to respond as i have questions but overwhelmed. Trying to use strategies to mentally do this. It may take me a day or two. I don't take your time and response for granted. 

RAS

Just take your time. Folk will still be here.

PHEB1

Thanks so much for earlier poster @fatbelly @RAS and @sourcrates.
I had a bit of a battle trying to get my mental together. 
A few things have happened.  As I just couldn't deal a few weeks ago, a family and friend member paid off my PayPal. In good times I looked after many people so its heartening that someone did this for me in my time of need.

 Along with that, the joint loan with my husband has only £580 left with 2 instalments, so it will be paid off by my husband at the end of September. 
So, currently, my debt stands at £29,400. There is a lady at a small debt charity helping, but she is so busy ! I so much appreciate her, but my anxiety is so high, and it is so hard to get an appointment to see her sometimes. She is a very wonderful patient lady. A diamond.  She was going to write to creditors a couple of weeks ago to see if any will write off.  I'm so close to DRO Iimit don't want it to be rejected if someone adds interest or something last minute.  She sent the debt mental health form. At least, I hope she did. I have creditors writing me directly this week asking for a budget and an update on my circumstances. I can't respond to them. I am just hoping they get her letters ( I hope she sent them ).

Shall I separate my bank account from my husband before applying for DRO.  Is it then better to wait until the loan is paid off at the end of September?  We also have a joint savings account but I don't put money in it. I have not for a year. £500 in there. Its from his salary that goes into it. Shall I also take my name off that also? I don't want him to know about the DRO until I am in a better mental health position to deal with any additional stress that will definitely come from him.

Thank you for your time and patience in any response. 

sourcrates

Quote -"There is a lady at a small debt charity helping, but she is so busy ! I so much appreciate her, but my anxiety is so high, and it is so hard to get an appointment to see her sometimes. She is a very wonderful patient lady. A diamond". 

I suspect this approach would work best for you, as mentioned previously, your initial strategy should be to attempt to get everything written off on mental health and affordability grounds, leave the DRO as a last resort choice.

In your case it would seem that a one on one approach is what`s needed, however it appears this lady is quite busy, as are all debt advisors currently, but I would encourage you try and get another appointment with her, and seek an update on progress so far.

It would help enormously if you could either write to or email your creditors, with just a simple note telling them you are taking debt advice and will be in touch shortly, ask them to refrain from collection activity at this time, as you are suffering quite badly with your mental health.

If you can respond to these messages, then you can send an email, I know it may be difficult for you, but self help can go a long way in these situations.