Dont know what to do

gwynlas

You need to complete a statement of affairs SOA for advice on your budget.

The level of your credit card borrowing suggests that you need to consider a debt management plan which will enable you to pay off your debts interest free over a longer period.

This will mean your credit score is damaged for six years but means that you will be living within your means,

There are many of us here who have similar experiences and we have all got through okay.

ManyWays

Can I ask if your son is paying rent?

An IVA may not be an option with you owning a house mortgage free as it it may not be approved by the creditors. A DMP looks more practical but we can say more after we see a SoA.

The end of the PCP will be a problem when you are in a DMP. I suggest you need to set aside any money you get from the car commission claims towards either paying the balloon payment or buying a cheap run around

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82049073#Comment_82049073

I've been on a debt management plan for the last 5 years. There's nothing to it really, you simply ignore what they say the minimum payments are and pay what you can afford instead. A Dmp will result in a lot of negative marks on your credit report but they'll disappear in time and the interest is usually frozen so you can get on top of things.

Debt camel has some details on the process, if you do go down that route then stop paying and wait for defaults before starting any payment plan as that's much better for your credit report in the long term.

https://debtcamel.co.uk/debt-options/guide-to-dmps/

13thlegion

The horrible thing about borrowing money is that if you really need to, you can't afford to (I've definitely been there). And of you can afford it then you really shouldn't need it.

Well done on the start. The mindset shift is the single hardest part. The practical side of getting out of debt is much easier in comparison.

My advice is just going to be listing an example of the way your new thinking will free you up. You are in charge of the money. Not others. They can ask for payments but that doesn't mean they have to get them. A possible answer to any question is no.

Currently it sounds like you pay your debts first, then your bills, then try and survive on what's left.

New mindset:

• Pay essential bills first. This is anything to do with food, housing, utilities, transport. In that order. I imagine you have been trying to cover food with what's left. Instead work out what you actually need to spend on food per month. Set that aside and it's not touched for ANYTHING else. Housing would be the council tax. You are in a great position being mortgage and rent free. Then the bills like water and energy. Transport in your case would be the PCP, fuel, insurance, and saving for maintenance/MOT and balloon payment. I would also include a portion set aside for emergencies here too. Think of this as your own credit card where if you spend from it you need to pay yourself back. It's for real emergencies only though. (Which sounds like you know all to well with recent experience. Really feel for you,)
• Now that the basics are covered, plan for life and living. Modestly but with some comfort. Be realistic. Everything from making sure you have money for clothes, Xmas, house maintenance, entertainment (TV, seeing friends etc) and anything else.
• Next. Congratulations you are now living sustainably. Notice, no debt. So any 'damage' to your credit file by the next steps does not matter. You don't need to borrow anyway.
• What's left can be used to pay down debts. If it's only £50 between them all then that's all they get. Because you come first. Yes they will ask to be paid. Yes it will be in forceful language. But the answer is no.

You may see some contrasting advice about going with a charity like stepchange to help you or doing this yourself. It's all really semantics on what is the most efficient. I'd suggest at this stage that is static noise. What matters is an approach that is effective for you. And that includes what is easiest. Stepchange may be very good for you in building confidence to handle all of this.

Grumpelstiltskin

I totally agree with what 13thlegion has said.

The first problem you have to overcome is changing your mindset to realize you come first not your creditors.

The next thing is not to panic and rush into paying your creditors too soon. ( This is after you have cancelled all payments on all your unsecured debts.)

Next you need to build up an emergency fund to cover what will crop up un expectly in the future, and we do mean things like cooker breaking down, boiler packing up.

Next you need to factor into your budget all annual costs that you do expect, Christmas, birthdays, insurance renewals etc.

Next you need to put all the money you have saved by not paying debts plus the amounts you have in your budget to cover annual costs into an easy access ISA.

You once you have put yourself first and not your creditors will see there is a way forward.

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82049133#Comment_82049133

Honestly, you have no idea how hard it has been. After I lost my husband (killed in a motorcycle accident on my birthday) and I lost my job, my dad passed away. So in the space of 8 months, I lost my husband, dad and job.

I have looked at Council tax benefit, but because my son is 24 and earning, I have been told that I am not entitled to anything. I have tried to do a claim for Universal Credit, but I need to ring them because it seems to be stuck on a section called "About my partner", and I don't have a partner, but I can't get passed it. Every time I log back in to try and continue is goes straight to the partner section again, and there is no option to go back. Obviously I've done something wrong but what I don't know

Grumpelstiltskin

Ask on the Benefits section about the problem with your UC claim and see if they can help you.

Benefits & tax credits — MoneySavingExpert Forum

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82049153#Comment_82049153

Thank you, I will take a look at that link.

I'm not sure about the pension situation with my husband, but I don't think there would any death in service grants as he was self employed/sub contractor to a good friend. And no idea what an ongoing spousal pension is?, I did get bereavement support at the beginning, but it was a one off payment of about £2,000.

I saw Martin Lewis on the This Morning programme the other day, and he mentioned about millions of unclaimed pensions and to go on to Gretel. So I have done this for my husband, but I need to upload documents that at the moment I don't have. My husband had never made a will, so when he died I had to apply for Grant of Probate, which was given. I know I have the grant somewhere with other documents relating to his death, (there was quite a lengthy court case), but I just cant find it, so I have ordered a copy costing £16, just waiting for that to come. Once I have that, I can upload with his death certificate on Gretel.

elsien

Your son is considered a non-dependent and he’s expected to contribute to household costs, including the council tax bill.

Is he doing that, because if not he needs to start. And in a realistic way, not a token 20 quid a week.

I would also second a visit to the benefit board about your universal credit issues. There are some very knowledgeable people on there.

ETA, it’s just occurred to me that your claim needs to be one for a single person. Did you put your son on because he’s living in the household and it has got confused that with it and has him as being a partner? Is it possible to delete the claim and start again?

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82049563#Comment_82049563

Hi, no he doesn't pay anything towards the household costs, he doesn't earn a brilliant wage, and he has his own debts that he is trying to pay off, so rightly or wrongly, I feel guilty taking money off him that he can't afford or sustain month on month 😔 and these days he tends to stay at his girlfriends flat a lot, so he is hardly here any way. Maybe its the way I was brought up, as I didn't pay board or anything like that, when I was living at home.