Debts spiralling and not sure what the best solution is. Any help massively appreciated

11gaz11

To cut a long story short i split with my ex a year ago. She had an IVA so anything we got on credit whilst together - washing machine, bed, sofa etc was in my name but paid for together. When we split i took everything in my name (amicably) and obviously this meant i am now paying for these things on my own. I needed these items for my own place anyway. I moved in with my mum for a few months after our split (put my stuff in storage) whilst trying to get some debt paid off and whilst trying to get my own place (ex had racked up a studio account balance in my name of over £1,000 which i have paid off now). I have been in my own place for 6 months now but the penny has dropped that i am really struggling to keep my head above water and need to do something about it ASAP. I live on my own and have 2 children aged 13 & 11 who stay with me at weekend, school holidays etc. It was not practical living with my mum as she only has a 1 bedroom apartment and is 70 years old. I have 2 children who stay with me so needed my own place.

I did speak to someone on the phone from Money Advisor a couple of days ago who to be fair was very helpful. He is calling me back tomorrow but i think my first port of call should have been here for advice rather than elsewhere (such as there). He went through various options (Debt management plans/IVA's etc) But i am very reluctant to go down this route unless they are the best options. At this point i am not sure if they are so do not want to jump in to anything and regret it. My outgoings are more than my incomings though at the moment so i can't go on like i am. Just to clear things up I have NEVER missed a payment or been late with a payment EVER. Never had an IVA/CCJ. Never been behind with bills or not paid them. Just wanted to put that out there.

Overtime has been completely stopped at the moment at my place of work. I have worked there for over 20 years (full time) and this has always been available in the past. I guess you get used to earning a certain amount over time and when it stops you notice it and yes i know this shouldn't be relied on.

Anyway i earn exactly £450 a week after tax

My monthly outgoings are:
Rent £725 (6 months in to a 1 year tennancy)
Loan £270 (2 years left)
Car insurance £46
Car tax £21
Loan £30 (2 years left)
Bed/sofa (finance) £84 (18 months left)
Mobile phone £10
Child maintenance £106 (kids are 13 & 11)
Council tax £107
Gas and electric £100 (average over summer/winter months)
Water £48
Broadband £33
House insurance £9

Already my outgoings are more than my incomings so add in to that diesel (£20 a week usually and food £30ish) i'm struggling even more. Now my mum has been a massive help since i moved out, she is currently giving me £300 a month towards my rent and bills, this was something she offered to do to enable me to get my own place and something she has said she will do for the next couple of years until my loans are paid up and bed and sofa. This will "free up" just under £400 at that point. Amazing help from my mum who i would be lost without but i am under no uncertain terms this is not guaranteed obviously and I can't take for granted and just assume i will keep getting.

I have a credit card with a £4,800 balance
Paypal credit £950 (need to make a payment of £32 by 02/02)
Currys finance £1400 (need to make a £60 payment by 18/01 & £107 payment by 22/02)
I also have £1000 on an Argos card which is BNPL and doesn't trigger until July this year

My question is what should my next port of call be? What would be my best bet? There must be similar people who have been in a situation similar to me or are in a similar situation now. This is a constant worry at the minute and i realise unless i start to tackle the issue now it is only going to get worse. Any help from anyone and any advice or replies would be massively appreciated.

Thanks

Gaz

Brie

Cancel any accounts that your ex might still have access to to ensure nothing further is added to these "in error".  

Look at talking to an organisation that isn't going to cost you money to help you with your debt issues.  Money Advisor looks like the will make money from you which means that less of what you pay will actually go to resolving your debts.   National DebtLine, StepChange, Community Money Advice (CMA), some Citizens' Advice, Christians Against Poverty (CAP) are all free services.  Because they don't make money from getting you on to an IVA or DMP they are less likely to advise those as solutions.  

Brie

AND go to the top sticky on this forum and look for the statement of accounts (SOA).  If you fill this out in detail and post it back here those of us who have been through similar (and sometimes worse!) situations will offer advice on where the budget might be tightened up.  Be sure to list APRs etc for loans/cards and all the things you're spending on.

Well done, btw, for having the penny drop moment!!  That's always the crucial thing.

RAS

Hi, please do fill in the Statement of Affairs because it will prompt you to add things like diesel and food that are actually more important than consumer debt. You need also to save money for car maintenance etc. In your position it is likely you've omitted things. 

With respect to the debt it is important that you separate any hire purchase agreements from loans and credit cards, and if your car on finance, know whether it is PCP, hire purchase or a straight loan.

And add the APRs for all debts.

Don't respond to Money Advisor. You can get better help with more options from the debt charities Brie has mentioned.

Also be aware that you've had a shocking time over the last year, so you may want to start with a flexible holding plan that allows you to stabilise the situation whilst you consider further options. 

I could add that unless you've got a massive amount more debt than you've already discussed here, an IVA is not suitable. They are for people with house and other large assets to protect and over 30k debt. But the advisors will get a nice referral fee and the IP will charge £6-9k for the privilege.

You will get there. It might not be pretty but it will work out in the end. 

And what matters are you, your kids and your mum.

P.S. You might want to consider a protective registration with CIFAS. It would mean that any future credit application took longer, but it would protect you against your ex making applications in your name. 

11gaz11

Thanks for your reply

My ex doesn’t have access to anything so there are no worries on that front. Anything she did have access to I either changed the password or closed down (such as Studio - paid off and closed down)

To be fair to the guy on the phone he did mention step change and citizens advice and to seek advice from them as they were free and not to rush in to anything.

If an IVA is my best option down the line then fair enough but I am out off by them as my ex had one and I know how severely restricted she was. She struggled to have a bank account in her own name (it was closed) so I am wondering if that would happen to me and also if my landlord needed me to move out at any point during me having an IVA would I struggle to get somewhere else in my own as I know it stays on your file for 6 years after starting an IVA

These are my 2 main concerns about an IVA. Obviously you are severely restricted getting any credit whilst you have one also but at this point this isn’t something I’m too worried about as I realised credit/finance has got me in to this mess and something I need to avoid for the time being until this debt issue is sorted at least.

11gaz11

Brie said:

AND go to the top sticky on this forum and look for the statement of accounts (SOA).  If you fill this out in detail and post it back here those of us who have been through similar (and sometimes worse!) situations will offer advice on where the budget might be tightened up.  Be sure to list APRs etc for loans/cards and all the things you're spending on.

Well done, btw, for having the penny drop moment!!  That's always the crucial thing.

I will definitely have a go at filling this in. Thank you so much.

sourcrates

I was going to say you only have around 8k in unsecured, non priority debt, if you can`t afford it, don`t pay it, its that simple.

Then I noticed two other loans and some finance, tucked away in the top paragraph, so you will owe more than that.

Renting can be difficult with a less than perfect credit history, post up a completed SOA so we can get a better idea of your circumstances.

11gaz11

RAS said:

Hi, please do fill in the Statement of Affairs because it will prompt you to add things like diesel and food that are actually more important than consumer debt. You need also to save money for car maintenance etc. In your position it is likely you've omitted things. 

With respect to the debt it is important that you separate any hire purchase agreements from loans and credit cards, and if your car on finance, know whether it is PCP, hire purchase or a straight loan.

And add the APRs for all debts.

Don't respond to Money Advisor. You can get better help with more options from the debt charities Brie has mentioned.

Also be aware that you've had a shocking time over the last year, so you may want to start with a flexible holding plan that allows you to stabilise the situation whilst you consider further options. 

I could add that unless you've got a massive amount more debt than you've already discussed here, an IVA is not suitable. They are for people with house and other large assets to protect and over 30k debt. But the advisors will get a nice referral fee and the IP will charge £6-9k for the privilege.

You will get there. It might not be pretty but it will work out in the end. 

And what matters are you, your kids and your mum.

This sounds much more promising Thank you so much. This is also why deep down I knew I should have come on here first instead of calling Money Advisor. The guy is calling me back tomorrow. I’ll either not respond or tell them I am not interested as I have had time to think over the weekend.

i know what all my debts are, who they are with, how much and the APR’s. Been through all of that today. Nothing is on HP. My car is mine (factored in to the £270 bank loan anyway)

My ex’s debt was around £45k so makes sense she was probably more suited for an IVA or more than likely pressured in to it anyway.

Thanks for you help once again. I will get that SOA filled in asap, will more than likely be tomorrow now but thanks again There is hope!

RAS

Sleep well.

11gaz11

sourcrates said:

I was going to say you only have around 8k in unsecured, non priority debt, if you can`t afford it, don`t pay it, its that simple.

Then I noticed two other loans and some finance, tucked away in the top paragraph, so you will owe more than that.

Renting can be difficult with a less than perfect credit history, post up a completed SOA so we can get a better idea of your circumstances.

Thank you. I will get on this tomorrow. Working today unfortunately so will do it tomorrow when I have all proper info etc but thanks again for you input. Much appreciated 

11gaz11

RAS said:

Sleep well.

After the comments and help on here so far  will do thank you