Help gratefully received!

ManyWays

updraft was actually two separate loans taken out for consolidation, one about a year ago, the other just over two
you could look at making affordability complaints about them

If you have 4 children with you all the time, the expense amounts for Clothing and Child expenses need to be significant. 

inthezeroroom

That £21k car could go.

cookiemonster10

EssexHebridean said:

Hi Cookiemonster - welcome to the boards, and happy new year.

first up - I’m guessing you are one of those who have learned the hard way that consolidation doesn’t work. I really wish the message was out there more widely - it’s hardly someone’s fault if they believe the happy crappy advertising selling consolidation loans as a “way of getting out of debt” after all. As you’ve discovered, sadly it’s not, and it often ends up making the situation far worse, I’m sorry that you have been caught in that trap. 

Definitely check on any benefits you might be entitled to - there is never any harm in checking even if you think it’s unlikely that you qualify. 4 children is quite a household - and that in itself can put a strain on finances of course. 

You say that  you are currently able to make the minimum payments each month - but that SOA clearly shows that you can’t, that’s problem no 1,  fortunately it’s also an easy fix - any unsecured consumer debt, stop making the payments to. That immediately gets your finances back to a position where you have control and you aren’t making things worse by trying to do the right thing. For your household and family, the right thing, right now, is to concentrate on your priority bills first and foremost - so rent, council tax, in most cases heat light and water - although not in yours currently of course, any essential travel, food and any necessary clothing purchases I’d include in there too.  

Can your partner increase their income at all? Currently their earnings are being almost entirely wiped out by the childcare bill which is obviously not ideal, not least as it must feel entirely dispiriting to be going to work for  almost nothing (and looking at that cost for petrol, it may actually be less than nothing?) 

As already said, there isn’t a huge amount to trim on the SOA - however, I’m going to question whether this is actually accurate for the current time as the fact that you have managed to put the buildings insurance cost on there raises concerns on that front.  Obviously the saving on bills is helpful, although the flipside is of course that hefty council tax bill. Your grocery spending can almost certainly be cut down a bit - even for a family your size £800 is pricey, although if it includes nappies and/or formula that won’t be helping. The “downshift challenge” where you switch out branded goods for supermarket own brand, and own brand for discount line might be worth a look. If you currently shop at Sainsburys you could try Tesco, and if you are currently a Tesco household then Aldi or Lidl may well save you a bit. Meal planning and shopping with a list (and without children, ideally!) will help to cut costs too. In your shoes I would make my first step to overhauling that side of things to be  asking an inventory of everything in the fridge, freezer and cupboards, and then working out what meals can be made from what you already have. Make your first step towards planning meals for the following week always to be checking the fridge to see what needs using up too - food waste is the enemy of keeping to a tight budget! 

It looks like a DMP is definitely the right way forwards for you - but don’t be tempted to rush into this, it’s important that you wait for accounts to default first as this minimises the longer term effects to your credit file. 

Thanks for all the responses. In terms of DMPs, I’ve looked at step change but also see some people suggesting self managed… how does that option work, is it simply a case of defaulting on those unsecured debts and waiting to then speak to them and come up with a plan of action or do you specifically ask them for a DMP? Sorry, completely new to all this! 

sourcrates

First step is to let all your non priority debts default by non payment, it can take a while, but gives you a chance to save an emergency fund, during this time creditors will be writing and calling to see why you have not paid, its best to just ignore all contact, as that just delays the default process.

A default notice is a statutory letter sent under section 87(a) of the consumer credit act, it will demand full payment of the arrears outstanding within 14 days or else a default will be registered on your credit file, very official looking and sounding, but purely for your information only.

Once defaulted, all interest stops, so do charges, and it gives you a clear 6 year window until your credit file recovers from all the negative information, regardless of what else you now do.

You will now be in a "phoney war" type situation, where a few things may happen, your debts may be sold, they may be ignored for a while, or they may be assigned to a debt collector, whatever happens, you will be written too, so its a case of waiting until you are contacted, then you can do as you wish regarding payments, normally you would split your disposable income between your accounts, but you can work it how you see fit.

One point to note, one or more of your debts may be assigned to a debt collector before it defaults, if this happens you may need to stay radio silent as if the debt was still with the original creditor, ask for advice if it happens.

That`s the process in a nutshell.