How can I get myself into a better situation

PurpleMouse5
PurpleMouse5 Posts: 41
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edited 16 October 2023 at 9:17PM in Debt-free wannabe
I've been on a DMP since August 2022. My payments have reduced over this time, and I'm currently making £1 token payments. Debts were accumulated on living costs. 

I have ongoing disabilities (autism, and mental-health) and a worse than usual mental health crisis recently, which resulted in me no longer being able to work, and claiming benefits in the last 4 months. 

I have been awarded PIP (enhanced rate living & mobility) & used some of my backdated PIP this month to repay two debts:
 (a) £650 I owed a previous housing cooperative (rent arrears but not my current accommodation). This was effectively a friends-and-family debt because I knew the people well and they let me build up the arrears as a favour 5 years ago but I just never got into a position to repay. This debt was listed on my DMP
(b) £700 I borrowed from a friend to pay my current rent when Universal credit refused my housing costs. This was never on my DMP as it was a short term debt over the last few months. 

Upcoming possible changes:

PIP award will be reviewed in about a year
I am awaiting an assessment for the ESA so I may lose that, keep the same, or get moved to a higher rate (in next 2 months or so)

I'm currently not able to work but I'm hoping to get back into it within the next year. I want to take the employment support when it is on offer and start looking when I'm ready rather than have that timetable dictated by my debt solution. I want to get myself into a better employment situation while I have the PIP award, rather than in a stress if it doesn't get renewed, as dealing with both at once is more likely to make me too ill to work. I've only ever managed to work part-time, so it's unlikely I would be able to manage a full-time job in the next year. 


I'm moving house to be a lodger with friends at the end of the month. The SOA below is for my new housing. 

I have a tribunal open with universal credit because they refused to pay my rent costs in my current housing. I may get £700 back if I'm successful. In the meantime I borrowed money from a friend to pay my rent and have repaid them from my backdated PIP. 


Reasons I need to change the situation 


I could tighten my SOA to make £20-30 a month to put towards a DMP. But this is going to take over a decade to repay.  I'm not getting very far with the DMP. Money stress was one of the factors in me getting more ill, and I think my living costs were set too low in the DMP when I was working. For example, before the DMP I was paying for additional support and I didn't feel able to continue doing this.  
 
This PIP has been an absolute lifesaver and I've been advised to use it as breathing space to get myself into a better situation and work out what I can do consistently. Part of that is getting into a better situation with the debts. 

To stay as well as possible, I want to be able to spend money on additional support services if needed. And have a bit of flexibility in my budget to be able to spend more in bad weeks. Ideally if I do start working a few hours, I want to build up a bit of a buffer of savings in case my benefits are suddenly stopped in a year. Uncertainty and stress has a strong impact on my health conditions and I got trapped in a cycle of stress and getting more ill. 

The DMP feels quite stressful because I can't build up that buffer of savings to reduce my uncertainty, and I can't fluctuate my spending enough to account for my different levels of coping (for example needing to take a taxi on a day when I can't cope with bus travel). I'd like to see if there's another option so I don't have this hanging over me for too long. 


Possible options? 

I think I have 3 options? DRO, continue with DMP, or try to make full and final payments using some of my PIP money (I could probably spend a little less if it was short term?)

With the DRO my worries are whether I can get a stable enough income & expenditure for a whole year to do it. Will the friends and family loans I just paid off cause a problem? My income is likely to fluctuate up or down depending if I lose benefits or take on work? My share of the bills may reduced if another person moves in? what about the tribunal payment if it comes through? Will this prevent me working on my goal of getting back into work? 

Any advice please? thanks 


SOA:  This is for my new housing from November. 

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0[b]

Monthly Income Details[/b]
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 986   PIP and contribution based ESA
Other income............................ 0[b]
Total monthly income.................... 986[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 100
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 12
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 350
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 100
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 30
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 7
support costs........................... 88   ideally a bit more tbh but there's not enough in the budget
combined bills ......................... 270[b]  I don't manage the bills myself so I'll just pay a combined amount to the landlord, but this covers water, electric, gas, council tax & internet. 
Total monthly expenses.................. 984[/b]
[b]

Assets[/b]
Cash.................................... 700    what's left of my backdated PIP mostly
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 700[/b]
[b]
No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Paypal.........................55........1.........0      never defaulted but is at 0 interest
Bank...........................405.......1.........0    in default
credit card 1 .................720.......1.........0    in default 
credit card 2 .................3280......1.........0[b]  in default 
Total unsecured debts..........4460......4.........-  [/b]   

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 986
Expenses (including HP & secured debts). 984
Available for debt repayments........... 4
Monthly UNsecured debt repayments....... 4[b]
Amount left after debt repayments....... 0[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 700
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,460[b]
Net Assets.............................. -3,760[/b]

[i]Created using the SOA calculator at www.stoozing.com. 
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


Comments

  • enthusiasticsaver
    enthusiasticsaver Posts: 15,324
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    My first thought when looking at that soa is that the groceries figure is very high for one person. Do you cook and meal plan? Can you use a cheaper supermarket? I personally wouldn’t bother with the tokens. Sometimes if you are in ill health and things are unlikely to improve in the near future some have had success in asking the debts to be written off especially if you say they are affecting your mental health. If you could cut back on the groceries though you would have more available for support services which is what PIP is for really and save maybe for full and finals on the debts. 

    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.
    Link to soa: https://www.lemonfool.co.uk/financecalculators/soa.php

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  • fatbelly
    fatbelly Posts: 20,234
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    I agree. Have a read of this

    https://www.nationaldebtline.org/fact-sheet-library/debt-and-mental-health-ew/

    I'm not a benefit expert. Are you not getting any UC? When does the CBESA expire?

    I noticed your debts are lower than when you posted last year. Well done
  • gwynlas
    gwynlas Posts: 1,622
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    Try not to stress over the DMP so what if it takes 10 years many people these days are having to take on mortgages  longer than the traditional 25 years. All you can do is try your best to look after yourself, you have repaid your rent debt and repaid your friends. There might be ways that you can reduce your grocery budget by meal planning and it can sometimes help if you have a few ideas for cheaper meals using eggs or tinned fish for protein.
  • fatbelly said:
    I agree. Have a read of this

    https://www.nationaldebtline.org/fact-sheet-library/debt-and-mental-health-ew/

    I'm not a benefit expert. Are you not getting any UC? When does the CBESA expire?

    I noticed your debts are lower than when you posted last year. Well done
    That's really helpful thanks. 

    CBESA expires July 2024 (subject to the work capability assessment that I haven't had yet), and I should go onto UC when it expires. No UC at the moment because I'm not getting housing costs and the ESA is deducted from the living cost element - I have a claim open but payments are 0. Housing costs is a complicated one but I already have support from a specialist to challenge the decision at a tribunal. 
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