60k and counting...

RAS

It's not relevant what the average for Stepchange is.

What matters is how much you as a family have actually been spending on clothing.

Are you charity shop buyers, or does the child's clothing end up in the grocery shop? At that age it's very because difficult they are so cute and the clothing is so cute, but it rarely fit for more than 4 months. Does your disability require you to buy certain styles of clothing?

Beddz

https://forums.moneysavingexpert.com/discussion/comment/82102297#Comment_82102297

I just shop at Asda or Jacamo for clothing nothing special most of kiddos clothing is primark or Asda also.

ManyWays

We never have had a "clothing" budget the average recommended to us by StepChange is £900 a year
that sounds reasonable for two adults and a toddler. If you can spend less, put that extra aside into an emergency fund

Beddz

https://forums.moneysavingexpert.com/discussion/comment/82102570#Comment_82102570

Maybe wasn't StepChange but definitely was recommended somewhere. My partner is asking as we have equity in the house of around 65-70K is there any possibility we'd be forced to sell to pay off the debts?

ManyWays

My partner is asking as we have equity in the house of around 65-70K is there any possibility we'd be forced to sell to pay off the debts?
In a DMP? No chance of that with the creditors you have listed. (HMRC can and do make people bankrupt for large tax debts if you can not get a payment arrangement agreed outside a DMP)

RAS

If your partner is asking about an order for sale for consumer debt, it just doesn't happen. Try a boundary dispute with a neighbour and it could happen.

Given you still have some savings, you have a lease car ending in a year's time and your current SOA suggests you can make some decent monthly payments, you need to stop paying your consumer debt NOW.

1. That solicitor's debt is priority. It's not consumer debt and it costs very little for them to go for a CCJ. Make an arrangement to pay that off within a timescale acceptable to them.
2. Get that new bank account for income. And transfer the essential household DDs to that.
3. No-one else can take legal action until they register a default on the account. Most will then take a few months to decide whether to keep in-house, assign or sell the debt. They will write and tell you, explain how to pay and you set up payment.
4. You need your remaining savings and any money you can save up between now and October 2027 to replace the car, if that is essential to your life. Aim to have some savings left over after that to cover emergency costs like maintenance and also replacement.
5. The value of most of your debts is unlikely to attract legal action if you offer a reasonable payment once the default is registered. The 2 debts that could be a bit of an issue are MBNA and Hastings. Based on threads here, MBNA are reasonable. Few people will know about Hastings. You need to get out your agreement with them and get some advice on the specific contract.
6. The worst that can happen is that you get a CCJ and have to pay an affordable monthly amount. Since you will be paying an affordable monthly amount, there's very little incentive to get a CCJ. Technically they could go for a charging order but if you are paying off the debt that's very unlikely.
7. Regarding the clothing allowance, you still need to know what you have spent over the last year. Was it £1200 and you need to rein in, or £600 and you know you can afford a decent winter coat if necessary?
8. You can renew your mortgage with your existing provider as long as you keep paying regularly and have no arrears. Given how low your mortgage is compared with likely rental costs, you'd be wise to stick with it. You do need to have something in the budget for maintenance and build savings for domestic emergencies.
9. When you can get more "free" childcare, your budget will improve. Start by putting more into savings so you can deal with car and house emergencies. Then knock off one debt at a time as you may start getting discounted offers or be able to pay off a small debt.

Beddz

https://forums.moneysavingexpert.com/discussion/comment/82102913#Comment_82102913

What am I looking for in the MBNA and Hastings contracts, we will use the savings to pay the solicitors fees then. Do I not get in touch with Stepchange or anybody until the accounts have fully defaulted? Should I contact any of the creditors at all?

RAS

The quickest way to get defaults is to stay radio silent with creditors. They can't do anything except send text, phone and email. Engage and you delay the defaults.

Stepchange will start a DMP immediately, leading to Arrangement to Pay of similar markers. Those affect your credit record for 6 years after the debt is paid off. Defaults are removed sooner, 6 years after the default even if you do not pay back a penny. Perverse, but those are the rules.

So you both need nerves of steel. You could change your contact details now, may be set up a throw away email, remove phone numbers.

But you must read letters as all legal notices have to be sent by snail mail to the last known address. A lot of letters will tell you your account is in default (you owe money). You want a demand for repayment in full with a short time scale. And then the confirmation letter that the relationship has broken down and a default will be issued.

At that point monitor your credit records regularly and a default should be registered within a few months. The creditor may send demands for payment, may advise that the debt has been assigned to a debt collector or has been sold. You'll be dealing with the debt collector most times, who will write telling you how to pay.

sourcrates

I know it sounds strange to keep radio silent, and not contact your creditors at all, but what you have to understand is that this is just business, and non payment and default is 99% an automated process, the computer spits out letters, tells the call handler to ring you, does most everything basically, if you try to become involved, they will just offer you short term payments plans, which will be of no use to you, and after 6 months they would just refer you to the debt charities anyway.

Its much better to understand the collection process, how it works, and play the game to your advantage.

The current lenders you have now, will likely not be the ones you end up starting debt management with, as debts are outsourced to collection companies, and they also get sold on to 3rd party companies, who specialise in buying such debts, so its best to keep personalities out of such matters, and just treat it as a business matter, which is exactly what it is.

This has been covered in other posts, but simply for clarification, if a creditor takes legal action, and obtains a CCJ, they can also obtain a charging order at the same time, but, as long as court approved monthly payments are maintained, no further enforcement action can be taken.

Orders for sale are very rare these days, so rare in fact they stopped keeping official figures for them in 2019.

Beddz

https://forums.moneysavingexpert.com/discussion/comment/82103079#Comment_82103079

Once defaults have been applied do I even bother with StepChange and if I don't what's my process contacting these debt collectors and come to a monthly payment agreement?