Struggling :(

jack_tyler

Hello, I am looking for any help or advice as to what I can do, or what may be the best thing to do, and also asking for no judgement please.

I currently have 50k of debt across 5 credit cards and I am struggling to live. A few years ago I lost my husband and everything with our house was in my late husbands name, bills mortgage etc, as he was the main bread winner and earned more money than me. For quite some time I relied on the cards to get me by, to pay bills, food shopping fuel for my car, clothing for my son, school uniform, school trips, the list goes on.

It started with 1 card on a promotional offer, then when that card was coming to end, I did a balance transfer on to another card, until I had 5 cards. But as I said above, when ever I needed money for something, I turned to the cards to help me. I have never missed a payment, I have never been late making a payment and always paid slightly more than the minimum requested.

I work, but only part time. I have asked about increasing my hours but unfortunately that isn't an option that my employer can offer. I have looked elsewhere for another job, but nothing has come up.

Over the weekend I have received an email from one of the credit cards saying that a promotional offer is due to end on 8th Nov, then after that another is due to end on the 22nd Nov. This is the case with all the cards now, the offers on them of 0% interest, is coming to an end so my monthly payment is increasing sometimes by 2x as much or even 3x as much.

I have a car that is on a PCP, this was taken out over 48 months. I have looked into handing that back, but because I have not completed over 50% of the balance, I would have to hand over cash as well as the car, and I just don't have the cash, so I am stuck with it…..having said that I need the car to get to work.

I have been in touch with CAB - they were very helpful, went through everything for me and worked out that when I have paid absolutely everything every month, I have £70 left. That's bearing in mind the cost of living doesn't get any higher. I am not putting the heating on as much and I am only buying food as and when I need too.

The lady at CAB advised that it seems my only option is to do an IVA. She said that I can't declare Bankruptcy as I own a property, I can't do a DRO as I owe more than £30k, which leaves an IVA. The only thing with that, is that it would be on my credit file for 7 yrs, which would take me to 64 and in that time I would not be able to get finance or credit on anything, which isn't a bad thing, but as my car is on finance, when that PCP is coming to an end, I would not be able to get finance again on another vehicle, and I need a car to get to work.

I have put claims in for the DCA for my late husband, and 6 of them have come back to me and said that his agreements had this, but that is just a waiting game. I have also looked into a CHC claim that I tried to get for my late mother, this is looking very promising, just waiting for the health authority to get back to me. I have done this through a company on a No Win No Fee basis, so if that is indeed successful, after the company have taken their fee, I could get around £15/20k, but again its a waiting game.

So, what I would like to know is, is there anyone on here who has been on an IVA and if so how was it? Or if anyone knows if there is anything else I could look at instead of an IVA then please let me know

Thank you

Brie

This may be better on the debt free wannabe board so I'll move it over there for more expert advice.

But meantime I'd like to make a few comments.

CAB is right that you can't get a DRO but not because you owe more than £30k (£50k is actually the limit). It's because you own your home.

I'm not sure why you are applying for something for your husband. Perhaps you could explain that. If he had debts in his name and the house and any savings automatically became yours on his death then it's possible that those debts can be ignored.

Frankly I think what you might need is a debt management plan rather than an IVA. IVAs very often fail particularly when people are on low incomes such as yourself. A change of circumstances (i.e. rising utility costs) and the payments are no longer affordable and out that goes. With a DMP there would be no interest being charged on your debts which is a major issue with CCs. Have a read of the debt camel website to understand more.

Debt solutions - what is your best option?

Of you could of course sell the house. Not an easy thing but if you have limited income it might help you clear the debt and have less outgoings in the future by moving to a smaller place (closer to work?).

Hopefully CAB gave you a copy of your income statement, what we call a statement of accounts here. I would suggest that you fill in our SOA (see the link below on my signature) and post it on here and let us see if we can help tighten up your budget. It's truly hard to see where things might not look right when they are the numbers you see every month.

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82172594#Comment_82172594

Hello, thank you for replying.

The things for more husband, are not debts as he did not have any debts, its the discretionary commission arrangements on finance agreements he had. I have challenged these on his behalf, as Martin Lewis said you can do, and 6 of those companies he had HP with, have come back to me and said that the agreement had this discretionary commission on, so once this has all be settled, any funds will come back to me.

fatbelly

I agree that if you could do a soa, we would have a better understanding of your position.

https://lemonfool.co.uk/financecalculators/soa.php

Don't rush into anything, certainly not an IVA.

Edit: The limit for a DRO is 50k but as the gross value of a property is counted, in practice homeowners are excluded

Vitor

I’d get a second opinion from StepChange or National Debtline before committing to an IVA. Crucially, is that £70 left after OP's existing credit card payments, or before them? That makes a considerable difference to OP's options.

Was there any life cover and any employer death-in-service benefit? With the husband having been the main earner, it is an important gap in the information given.

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82172686#Comment_82172686

Thats £70 left after everything has been paid, credit cards, car finance, utility bills, council tax.

No, my husband did not have life cover or death in service, he was classed as self employed and worked for his brother. He also didn't make a will, so after his death I had to apply for Grant of Probate which cost me £500

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82172763#Comment_82172763

Was his estate in excess of £270k? I ask because a spouse does not inherit it all if it exceeds that amount and you have children.

You don’t mention mortgage payments so would it be correct to assume he had insurance to cover the outstanding amount?

curlu

as Brie has said, I’m not sure why a DMP has not been suggested , do you know why?

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82172774#Comment_82172774

No, the estate was not in excess of £270k, it was much much less than this. I haven't mentioned mortgage payments because I don't have a mortgage. When my late husband passed, unbeknownst to me he had a private pension, which on his death paid out £50k, which was enough pay the mortgage off

jack_tyler

https://forums.moneysavingexpert.com/discussion/comment/82172782#Comment_82172782

I was told that a debt management plan is not legally binding and it relies on my creditors accepting the reduced payments. I will continue to pay until the full amount of debt is cleared and some creditors might freeze interest or charges although it is not guaranteed. Also the creditors can still contact me and take legal action if they want to and some creditors may not agree to a debt management plan, where as an IVA is a set amount for 6 yrs and what ever is left is written off, it is legally binding, interest and charges are frozen.

Grumpelstiltskin

https://forums.moneysavingexpert.com/discussion/comment/82172797#Comment_82172797

Who told you this? Not someone trying to sell you an IVA?

The chance of a creditor refusing a DMP is virtually zero