In over my head

TheAble

sourcrates said:

Insolvency (a DRO) is designed for this particular situation, high levels of debt, and not much to pay them with, if your situation stays the same for 12 months, then a debt relief order will write off all your debts and you won`t have  to pay any of them.

But there are strict criteria you must meet, the main one being the £75 disposable income threshold.

Best to do as much research as possible first.

Could op not just spend a little more to get under the £75...?

A few car expenses (which seem to be allowed) may actually come in handy.

sourcrates

For a DRO to be successful, you need a full 12 months of stability, static income, static expenditure, otherwise a DRO can be revoked if things alter too much, so with all the changes you have coming, it might not be the right time for that.

As a short term solution, lets look at the basics shall we, the point you need to be at to live and pay your essential bills without fear of being short of money.

So that is your baseline, having enough money to cover all essential bills, so start from that point, and see what changes you need to make to stay there, whether you default on some debts, or ask for payment arrangements with others, or default on the whole lot, look at what payments you need to cut to be able to afford to live within your means, and just do it.

Then re-assess the situation in 6/12 months when things have settled down, that`s your best option for now.

ih8stress

@sourcrates @fatbelly and others - do you think the Op would be wise to ask her Creditors if they will freeze her interest - to give her some breathing space, as the next 6-12 months seem to be an adjusting period, to determine all costs etc. involved and to determine and research which course of action will be the best for her?

Op, as someone else mentioned, as you have children, it would be good to try and get some life insurance in place.  I understand you have 'death in service' cover but not sure if this is enough?

Personally, I would be looking at any alternatives to getting a car at the moment as there are too many variables about it.  

Are there any other transport options you could explore at all?  

Charities/organisations/councils/friends/relatives/travel schemes/cheap taxi's etc. that could get you from A-B when required instead, which would cost less than monthly car costs?

Try to breathe, you WILL get through this, with the brilliant support and help on here

RAS

If the OP's creditors agree to freeze interest, they will probably record AP markers on her credit record, which affect her credit record longer than allowing the records to default. Unless she later stops paying and they default or she does a DRO.

Which is why we recommend that people planning a DMP default first. Otherwise the AP markers can wreck their credit records for decades.  Creditors are now supposed to register defaults promptly but it doesn't always happen.

ih8stress

RAS said:

If the OP's creditors agree to freeze interest, they will probably record AP markers on her credit record, which affect her credit record longer than allowing the records to default. Unless she later stops paying and they default or she does a DRO.

Which is why we recommend that people planning a DMP default first. Otherwise the AP markers can wreck their credit records for decades.  Creditors are now supposed to register defaults promptly but it doesn't always happen.

Ah, okay. Probably best for the Op not to do that then until they know which avenue to go down, thanks

kimwp

I was curious about present spend, so I asked some friends with children of similar ages. The family with take-home pay 6k per month (3 kids) said £100 was plenty across birthday and Christmas, that easter eggs can be bought for a couple of pounds and they do handmade presents for mothers/fathers day. They and their children do lots of socialising and have many friends.

In contrast, the family with 8k take-home pay said if buying electronics and buying for Easter, birthdays, Christmas, a family of four could easily spend that much on presents just for themselves. 

So quite a range!

chubsta

Regarding car costs, having a friend who is a mechanic is great as it cuts the labour costs, but it’s not just labour - car parts have shot up in price and having a 12 month mot doesn’t mean a clutch or oil pump can’t die within a week of buying it. Cars and houses are the two massive money pits that can hit you from nowhere so please bear that in mind, it’s not just the cost of buying them. Plus if you are a new driver insurance, particularly on an old cheap car, may be extortionate.