Which option is best for me?

Wicked

Hi, 

I am looking for some advice about which debt solution would be right for me and been going round in circles since October.

I am in default on all but PayPal and loan has gone to DC who I haven’t yet contacted.

I have ADHD and have struggled to manage money and debt all of my life.

I have posted my SoA below.

 I am currently getting more UC than shown here but it will drop in August so have used those figures as they will be correct for a few years.

My 19yo lives with me and gets £520 PIP which I’ve not included and has a small job earning £100 a month due to end in August.

I had considered bankruptcy but on another thread it was suggested that may not be the best option. 

Advice very welcome please 😊

Ps my car also needs repairs that I haven’t the money to pay for and I was considering a salary sacrifice scheme but looking at the figures, I really can’t afford it.

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... 2[b]

Monthly Income Details[/b]

Monthly income after tax................ 1870

Partners monthly income after tax....... 0

Benefits................................ 650

Other income............................ 300[b]

Total monthly income.................... 2820[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 710

Management charge (leasehold property).. 0

Council tax............................. 130

Electricity............................. 100

Gas..................................... 100

Oil..................................... 0

Water rates............................. 90

Telephone (land line)................... 0

Mobile phone............................ 67

TV Licence.............................. 13

Satellite/Cable TV...................... 45

Internet Services....................... 35

Groceries etc. ......................... 550

Clothing................................ 100

Petrol/diesel........................... 190

Road tax................................ 18

Car Insurance........................... 65

Car maintenance (including MOT)......... 25

Car parking............................. 25

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 150

Medical (prescriptions, dentist etc).... 35

Pet insurance/vet bills................. 25

Buildings insurance..................... 0

Contents insurance...................... 7

Life assurance ......................... 12

Other insurance......................... 0

Presents (birthday, christmas etc)...... 40

Haircuts................................ 65

Entertainment........................... 150

Holiday................................. 80

Emergency fund.......................... 50[b]

Total monthly expenses.................. 2877[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 2500

Other assets............................ 0[b]

Total Assets............................ 2500[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Loan...........................15000.....500.......0

Credit card ...................3715......100.......0

Credit card....................3340......100.......0

Paypal.........................4000......100.......0

Store card.....................1760......90........0[b]

Total unsecured debts..........27815.....890.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 2,820

Expenses (including HP & secured debts). 2,877

Available for debt repayments........... -57

Monthly UNsecured debt repayments....... 890[b]

Amount short for making debt repayments. -947[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 2,500

Total HP & Secured debt................. -0

Total Unsecured debt.................... -27,815[b]

Net Assets.............................. -25,315[/b]

sourcrates

Well on those figures, with a little fettling, and disregarding the debts for one moment, you could just about break even with your budget.

I think you may qualify for a debt relief order, there is no fee, the £90 charge is soon to be scrapped, you have less than £100 disposable income, so on those figures you should qualify.

The new figure for car valuation is I think 4k, will yours come in under that?

Info here -

How to get a Debt Relief Order (DRO) - GOV.UK (www.gov.uk)

elsien

Is the second adult a partner or your 19-year-old?

Are they contributing to the household expenses, because otherwise it seems odd that you have the costs for two cars on there and appear to be paying all the bills yourself. 

Wicked

Thank you for your answers, much appreciated. I think I will try a DRO and if I’m rejected, as you say, it’s free. 

The other adult is my 19 year old daughter, I am a single mum. She gets PIP so she pays all of her expenses using that and her wages. She doesn’t pay board but also, I don’t have any expenses related to her. I’m not paying any costs that are included for her car, they’re all my costs. 

Thank you again…this board has been so helpful 

elsien

So if you don’t have any expenses related to your adult daughter,  £550 a month food is an awful lot for you and another child? 

Is she using and paying towards the satellite TV, the utilities etc? I appreciate you may not want to charge her board. But when you are struggling financially adult children do  need to pay their way towards the overall household expenses.

enthusiasticsaver

There should be room to save on groceries, entertainment and clothing but there are no emergency savings and the car maintenance amount is too small for 2 low value cars. I think a DRO is worth exploring but it would depend on how that would affect you renting going forward. 

Brie

I thought for a DRO you needed to go through one of the known debt agencies so they could submit on your behalf.  And if you have AHDH this may be a good thing if you struggle with the budget and communication with creditors.

DROs have no fee as of the beginning of this tax year.  The value for cars however remains at £2000 but that will change at the end of June to £4k.  Total value of debt will be increasing from £30k to (I think) £50k.  But frankly if you are going to a debt adviser it will take them a couple of months at least to get confirmation of all your debts, check your credit history for anything lurking etc.  

One crucial thing with DROs is that your money situation cannot change in the 12 months of the DRO being in place.  This may be a good reason for not including your 19yo in this due to the change expected in their salary.  That said, as an adult I don't know that their money would be included in any case but you might need to state them as essentially being a lodger who pays the household so they can live there.  The debt agency will be able to advise better on this.   

Wicked

Brilliant, thank you. 

I will speak to an advisor then and I will submit in August once my benefits have finished changing

My food bill could be reduced but that includes all cleaning etc but both of my daughters have sensory issues for food so it’s usually 3 separate meals being made which is expensive. I will consider taking some board from my daughter, she will receive a student loan from September too.
and my entertainment includes gym membership for me and my youngest - I am tied in until june so that can also reduce then. 

Thanks again, so much to think about.