Drowning in (son's) debt - getting desperate

RAS

devondiver said:

Sea_Shell said:

devondiver said:

So - now drowning in figures number-crunching accounts - it seems most of his disposable income has been going in interest and charges for years. Probably a familiar story to you guys. Could be out of my depth but I have to think of the kids.

Question: RAS mentioned a while back that we needed to check whether he already had AP markers. Haven't done this yet - but does this make a difference to the approach we take as regards going via StepChange or self-managing as planned?

Please don't just tell me I have to pass it all over to him - I am trying (so is he!).

Does his income cover all his outgoings if you ignore the current debt repayments and interest?   

If he could start with a "clean slate", could he cover everything without relying on any further credit, from you or anywhere else?   

Yes, but - there will have to be cuts (such as Netflix/Amazon/Spotify/Ring/internet/mobiles/etc.)

So he needs to start cutting back now. All of the above.

He concentrates paying housing, taxes, insurance and then utilities as they are priorities. By the time he gets to insurance, he needs to be use price comparison sites to reduce costs. And for utilities, household goods and food he needs to learn how to dial down the costs. Wear clothes and turn the heating down, batch cook, grab the occasional yellow sticker bargain. Take a picnic rather than a meal out.

Does he have a functional freezer? Not just a home for fries, frozen pizza and peas?
Get a very reduced joint, slice into two or more, freeze both.
Double recipes, one third for today, two batches to freeze.
Batch cook basic mince with tomatoes. Freeze, add chilli and beans one week, herbs and veggies for pasta sauce the next, cottage pie, keema curry? It means he can take a pack out, leave to thaw during the day and still rustle up a quick meal for the family.
When veggies are cheap, batch cook soup, and freeze as family size and individual portions. Roots and pulses are probably best for basic combos. 
Keep a log book and delete as items are taken out of the freezer.

Make pizza from scratch at the weekend. Get the kids involved in making, topping and baking.

At basic level if he's cooking pasta shapes, cook extra portions. It's better for you health wise. Either cool and use again two days later for another pasta dish. Or cook 50% extra and cool tossed in a little oil, add some mayo and whatever veggies and scraps you have to make pasta salad for lunch. Left over chicken, bacon, cheese, tuna, whatever. I keep some things like tomato whole so it doesn't get sloppy.

Perfect a few very quick meals he likes when solo and can rustle up from the larder rather than a carry out.

Menu plan and work to shopping lists unless you get a bargain that needs eating quickly. There are loads of ideas in the Old Style Money saving section here.

kimwp

devondiver said:

So - now drowning in figures number-crunching accounts - it seems most of his disposable income has been going in interest and charges for years. Probably a familiar story to you guys. Could be out of my depth but I have to think of the kids.

Question: RAS mentioned a while back that we needed to check whether he already had AP markers. Haven't done this yet - but does this make a difference to the approach we take as regards going via StepChange or self-managing as planned?

Please don't just tell me I have to pass it all over to him - I am trying (so is he!).

You/he ideally wants the debts to be defaulted, which starts the six year count down for them to fall off his credit record. If there are arrangement to pay markers, they will fall off six years after the debt is settled. If he uses stepchange,  they will want payments to start straight away, which won't allow time for the accounts to default, so they will get arrangement to pay markers. If self managing, this aspect is simpler - ignore the creditors, don't pay (cancel direct debits) and wait for defaults, before contacting them to make payments.

It's difficult - we want to help those we love and have looked after their entire lives, and it can be difficult to know the right way to help. If his you and his uncle had not tried to help, he would not owe £51,000 to you and probably wouldn't be in debt at all, having had to address the issue earlier. I say this not to reproach you, but to take forward - the more you can get him to do, the better he will be for it. 

It's worth sharing the proposed SOA, the forumites are good at spotting where savings can be made or where more needs to be allowed in a budget.

devondiver

kimwp said:

You/he ideally wants the debts to be defaulted, which starts the six year count down for them to fall off his credit record. If there are arrangement to pay markers, they will fall off six years after the debt is settled. If he uses stepchange,  they will want payments to start straight away, which won't allow time for the accounts to default, so they will get arrangement to pay markers. If self managing, this aspect is simpler - ignore the creditors, don't pay (cancel direct debits) and wait for defaults, before contacting them to make payments.

Thank you for your explanation which helps to clarify things.

Floss

devondiver said:

Yes, but - there will have to be cuts (such as Netflix/Amazon/Spotify/Ring/internet/mobiles/etc.)

I live alone on a take home of under £1,800 and pay all my bills including housing on that, without Amazon, Spotify or Ring. My phone is £7/m, £5 for Netflix with ads, £30 for internet. My sons share their Prime TV & Disney+ with me.

I appreciate that your son has his kids part of the week, but he needs to understand that some things are a luxury he cannot currently afford.

Hiding the family financial position from the children is not always beneficial, and being open & upfront with them might surprise him. Kids don't NEED Spotify, or a Ring doorbell, or brand new high spec phones. My most recent phone (3 years ago) was 2/3 the price from Currys Ebay outlet as the box was damaged. Kids are excellent bargain hunters when it's something they want 😉

Ksw3

I have nothing to add in terms of debt management, I just wanted to say OP that you sound like a great father who's been doing his best. 

I was the funds provider to my parents. They didn't know how to handle money and once I started accumulating it in my teens/adulthood I found it hard to say no to them asking for help for rent/bills. If he can find a way to stability now then that would be best for everyone. 

My only word of caution is to make sure the responsibility for the management is slowly (if needed) handed back to him but one thing at a time, you've done great so far. 

kimwp

Good point made by ksw3, I also think you are a father who has done and is doing your best by your son - I wouldn't have been so persistent in trying to get my point across if I thought otherwise. Your son has had some bumps in the road, but he has the support of his family - he has been lucky in that respect.

ian1246

I hate to be the bearer of bad news, but I think you & your son are a bit out of touch with reality.

He is drowning in debt. You are drowning in debt from trying to help him - all of this stems  from trying to hold onto the "family" home, yet its very clear from the child maintainence he pays he barely has the kids.

The cold truth is he can't afford the house and the reason for keeping the house - kids coming over - applies what? 4 days a month?

Surely - for his sake, for your sake & that of the kids - it's time to accept reality & sell it, downsizing to one with a cheaper council tax (Band E currently?!) and smaller amount if bedrooms- even if dad has to sleep on the sofa when kids are over (you can get good sofa beds).

It's horrible- I've just come out of a divorce myself so absolutely sympathise. I had a choice to make on our family home. Do I try to hold onto our lovely large 3 bed detached house by borrowing £80,000 from mum & dad to buy the Ex out, or do we sell & I walk away with a far smaller share of equity to put as a deposit down on somewhere smaller?

I ended up buying a 3 bed semi with a council tax banding 2 bands smaller - saving £100+ a month. My mortgage amount stayed the same - but the difference is I wasn't having to pay back mum & dad.

The only other thing I'd note is the child maintainence itself. If it's 50/50 in terms of nights then the obligation still rests with whomever doesn't have the child benefit to pay the other UNLESS they can prove they are involved equally on a day to day basis in their child's life - dropping & picking kids up from school, doctors appointments, clubs etc...

It doesn't sound like he is involved equally for that amount to be paid per month (hence why he should sell the house) but if he is, he needs to start compiling evidence (including letters from school/doctors) in preparation to challenge it - since legally if it is equal there is no statutory power for the child maintainence service to be involved.

devondiver

ian1246 said:

- yet its very clear from the child maintainence he pays he barely has the kids.

I thank you for your observations - and sympathise with your situation. The child care arrangement is "shared", nominally 50/50 but flexible - in reality mother does most of the kids care and spending and receives the child benefit as well as the monthly sum from my son which is arrived at by mutual aggreement following CMS guidlines (so I am told). Perhaps an area we could look at - but not really an attractive prospect all-considered.

ian1246 said:

- downsizing to one [house] with a cheaper council tax (Band E currently?!) and smaller amount if bedrooms- 

The present house is a Band C, cramped, 2 up/2 down semi in poor repair. Estate agents say it would be very hard to find a better deal in the locality of the children's school - which we really don't want to change.

No - the real problem, as we see it, is the crippling interest rates (overdraft and credit cards) incurred after slipping into a deepening debt hole at a time when mortgage and energy costs were suddenly hiked. If we can put these to one side temporarily, and then cut day to day expenditure things will be manageable. Even if repaying debts, especially family money, has to go on the back burner for a while.

sourcrates

Persuading credit card companies to stop charging interest is possible, but these type of arrangements only last for a short time, any more than say 3/6 months, they will just refer you to the debt charities.

Stopping payments altogether has an instant benefit, forget about the interest and charges that will get added, no one ever repays the full debt once debt management kicks in, debts are sold for pennies in the pound, deals get done, settlements are made, it all evens out in the long term.

twopenny

You have my sympathies, I've been following your story. It sounds familiar to some I hear from parents and getting though seems to be the most difficult part. Youngsters live in a different world where stuff is being 'sold' to them 24/7 and they feel they must have.

I can't offer the sort of clever help you have been getting here but the best thing I was taught - and I was furious when it first happened - was to make a list.

Is it possible now you have access to make 3 columns side by side? What is essential - what is interest - what is non essential so he can see it in black and white and the image stays with him.

I had it a few years trying not to get into debt and it worked. Walk don't drive, cheapest phone and plan, ecconomy food. It really takes time and effort and sacrificing a lot of 'treats' so you have to find new ones.

The mobile £6 mt payg, I get my broadband for £18 pm. Not the fastest but it works. Freeview TV or free online TV and films. Even gigs and concerts. Go back to DVDs for the kids, £1 from charity shop.

It's not forever, it's until he can get this weight off his shoulders and after that a lot of what he's learned will stick.

If it helps my neighbour is going through something similar with her son. Claims he wants to save for a place of his own but on gov credit so stuck with limited hours, he's moved into her tiny 3 room bungalow and the first week had Sky Fibre BB put in to play on his computer and runs a big car which costs every time there's a new tyre etc. Drives to work when it's a 10min walk. So you aren't the only one