Disability & Unsecured Borrowing

Altior

Thanks for your thoughts. Yes the CT support is not a lot of money by itself, but in reality it makes a big difference to the monthly numbers.

I feel like it's partially that using capital to pay down the debt is not reversible. I worked out that with for example £12K capital, I would have £180 monthly surplus against priority expenses. Whereas, less than £6K capital with CT support gives me £350 (not including yield on capital).

The other element is the interaction with UC/DWP. My understanding is that less than £6K capital they basically leave you alone, but you could have a review any time from 6 months after the first AP starts. However if I declare £13K for example, I will have to go in and show them all of my documents to verify the capital. And I would need to do that each time the capital falls by £2K or more. That's less of a consideration to be honest, but being left alone is rather more appealing.

One other small factor is that one of the cards I have is a 0% purchases card, that is interest free until March next year. It is currently maxed out though. I could potentially pay £3K off for example, and put all grocery expenditure et al on it, so that I have more scope on income vs outgoings in the short term. That card is actually 2.5% minimum monthly payment (the only one not 1%), so it would also reduce my outgoings in the short term (currently that account is £100+ pcm to service).

ManyWays

I could potentially pay £3K off for example, and put all grocery expenditure et al on it, so that I have more scope on income vs outgoings in the short term

It makes no sense to use savings to clear a card to then run up more card balances for groceries: just use your savings to pay for groceries.

I think you may be badly overthinking things. Either you need a DMP, in which case use most of the savings to clear debts and then dump the rest into a DMP now. Or use the savings to pay off a large chunk of the mortgage and dump all the debts into a DMP now. Or you do not need a DMP at all, in which case use most of the savings to clear debts and carry on refinancing the rest.

But in any of these cases, the UC and SMI and later CTS will be helpful. .

Simplicity is a virtue; especially when you are so tangled up in complicated options.

Altior

Definitely overcomplicating it!

The upside of paying or partially paying down the 0% purchases card is to qualify for UC earlier. So I would qualify for UC and have less pressure on income and outgoings until SMI kicked in. It might even improve the chances of new transfer deals. It won't of course, in of itself, massively change the bigger picture.

I will review things at the end of the month I think, and see if this MBNA action has any impact on other accounts.

Sncjw

have you thought of applying for pip again, you said you may not get it but you do not know until you try. Think of how your health affects you not just on good days but bad days. How a good few days can lead you to go to a bad day.

Altior

https://forums.moneysavingexpert.com/discussion/comment/82066304#Comment_82066304

I'm not inclined to that direction currently. ESA was a pretty laborious process, and whilst I've not looked through the PIP descriptors, my sense is that PIP is likely to be a higher bar, giving a possible temptation to embellish my health and living story. It seems most initial PIP applications are rejected as a default, and I certainly wouldn't have a compelling case on paper. I live alone, don't want help from anyone, so push through all of the domestic things I need to do. My operation was the toughest challenge, A) getting out of the hospital without them finding out I wasn't accompanied, and B) picking up a post op infection, rendering me incapable of doing practically anything, such as picking daily post up off of the floor. But I somehow got through it.

I feel like when there is no option for me but to seek external assistance, and a first time application will be successful, will be the time to pull that trigger.

Sncjw

But yoi don't need to gave anyone if that is what your thinking. These are the type of things you put in your application. The money can help fund tools to retain your independence.

I was successful on my first go with my issues and had a face to face assessment then my reviews was paper based I reiterated my struggles. Down to the finest detail.

ManyWays

I too think you should apply.

You do not have to actually have the help that you need. If you life is restricted because you do not have help, that is a good point to make.

And not all applications are rejected. here is one for DLA (the child equivalent of PIP) that was accepted within just 3 weeks: https://forums.moneysavingexpert.com/discussion/6675908/iva-and-dla#latest

Altior

I think I will get the UC picture resolved first, SMI etc. And have a better understanding of where I am long term. To be honest, although I have cut my lifestyle to the very basics, as I still have plenty of funds, I don't feel financially boxed in yet. When I have little money and still have significant debt, that will probably feel more real. Then I may consider PIP. Sharing my personal details and story for my WCA was a huge challenge, I don't like engaging with other humans at the best of times. I was hoping that would only be a once in a lifetime challenge. There is a possibility I suppose that LCWRA might be merged with PIP. And I'll either be transition by default, or effectively forced to apply.

Altior

Matters have progressed moderately. I will be applying for UC imminently.

Within the next couple of days, I will be allocating a further £10.5K to my unsecured debts.

BT offers have completely dried up for me, and one of my cards (with a nil balance) has ended my account. This had over £10K credit availability and an account that lasted nearly two decades. All things considered, I may end up getting no more BT offers on existing accounts for the foreseeable future, thus eventually will require a DMP.

The two weightiest balances are Nationwide and Virgin. As everyone is aware, Virgin have subsequently been taken over by Nationwide, transfers of liability between these two are no longer accepted, and they are effectively now the same creditor.

Since I have £10.5K to allocate, in your opinion would it be most prudent to have a reasonably large liability with this one creditor (Nationwide), or have the spread across multiple creditors. A single default is not the end of the world as I understand it, however the prospect of action on a circa £15K debt is more likely I believe, and I suppose a DMP with a single creditor is a bit odd on the face of it.

Full disclosure, my intention at this point is to settle all of my liabilities within the contract, however if I don't get any more BT offers, that will not be feasible, as I will only have around £300 pcm headroom outside of priority bills, and that assumes CT support and SMI goes through without a hitch.

Thanks!

MasterG83

I would reconsider the paying off debt option, while its the ultimate "full circle" moment for me, I cleared over £50k in debt, every penny, but I had an income.

If I were in your shoes I would be looking at keeping that emergency fund intact or if it means losing UC because of it can you expend on any items that would improve your health or lifestyle at home?