Going into debt every month just to make ends meet - I don’t know what to do

[SilverliningHunter]

I’m a single parent to two DC and I only qualify for child benefit.

Their DF is abusive and it cost me thousands in legal costs in family court so I’m paying them off every month and a car loan for four more years and I’ve just been told it needs a new engine. I work full time and I have a side job, I’m exhausted. And as the thread title says, I am going into debt every month just paying all the bills that need to be paid, never mind the extras like broken car/school trips etc.

I have a massive mortgage that I didn’t fix so that has increased by £500 a month and I am at my wit’s end. I’ve been applying for new jobs but there’s very few in my area that pay more than I’m already on and that I’d be qualified for.

The only thing I can think to do is to sell the house, clear the debt with the equity and rent. Rent is the same price if not more than my mortgage but the benefit would be char I’d clear the debts so wouldn’t feel like I’m drowning all the time.

Has anyone done similar? I can’t sleep for worry.

Honestly OP, get on to the MSE site - look into starting a DMP. Stop your payments now, as a PP said your credit will be shot for 6 years, and then its not.

You'll pay off your UNSECURED debt, without risking losing your home. Research it first on MSE but it truly made a difference to our lives when we thought we were drowning in high interest rates and repayments.

IVA?
trashes your credit rating but you're protected from creditors whilst you pay your debts off and your payments are reduced.

Ask the mortgage company if you can go interest only for a while ?

Reading your replies your options are -

Trim the edges - switch utilities, freeview tv, sim only phones, cancel any unnecessary subscriptions, shop at Lidl/iceland

Or sell the house. This would be a shame as it's an asset in the long term.

One other option re mortgage? Your payments would be higher but if you paid your debt you might be better off.

I wouldn't normally suggest this but if it enabled you to hold onto the house could you take a break in paying into your pension for a year? In that year work very hard at getting a better paid job. Obviously try to get the loans transferred to 0% or low interest as well.

CAB are very good at advice for debts
They can liaise with your creditors to renegotiate payments and show you manageable options
IVA possibly?
This will affect your credit rating but if it was me I would accept that
30k is a lot of weight on your shoulders
I'm so sorry things are tough but please keep hold of your house. Renting is likely the same as your mortgage with no asset

Do you have a room you can rent out or take in students? Would it be sensible to move to a cheaper area? Might not help, I know.

@SilverliningHunter the other issue is what's the rental situation like in the area you need for family's school etc? Given they are older I don't see it as the end of the world if you did rent - however would renting be more affordable than mortgage plus £30k of debt repayments a month? If it was significantly cheaper then I would myself consider it if you have older children - as others say IVF and debt management also worth considering but will bugger up credit rating for 6 years. If you actually need hard cash in order to have a car (that you need) and are out of options then it might be best to sell up -

I've been working with some amazing organisations who help people with debt and budgeting - they are usually locally based so do see who is near to you by googling. For example, Christians Against Poverty (don't be put off by the name!) will assign a personal advisor to people who come to them who will line by line help to get you back on track. I was amazed at what they and others offer - free and without any judgement - and would not hesitate to bring in their help if I needed it (about to divorce in difficult financial circumstances so may well need it too). It WILL be ok, but sometimes it can feel hopeless and hard to see past. Get someone else to work it out with you

I don’t think it is my budgeting that’s the issue, it’s that the bills have all grown exponentially while my income has not which is why I’m considering such a drastic option such as selling the house.

Surely the interest rate rises must have left lots of people facing the same dilemma?

Definitely ask for a pay rise

Could you buy into new build shared ownership OP as you only need 10% deposit on the bit you are buying? Obviously the income level has to work too and I don't think you mentioned that - but as an example on a £380k flat if you bought 25% - you would need around £12,000 initially (including solicitors fees) and then rent and mortgage and service charge would be around £1600 a month - but if you've cleared your debts that may be doable - I don't know your income- you would probably be needing to clear around £3200 a month to get it

What is your income op? I assume you have checked that you are getting all the benefits you are due? Have you checked entitled to? Are you sure your ex is paying the right amount of cm?

Can you borrow money from a trusted friend of family member to reduce the debt and the highest interest payment? Even if you could borrow that interest free for a few months it might give you some breathing room.

Have you considered crime? Seriously though I'm in a similar situation money wise and it's so shit. Feel like I'm working to survive, no money for fun. Debts accrued for necessary purchases (not extravagant spending as everyone assumes). You're definitely not alone. It helps me to count my blessings, be grateful for what I have and remember that money is a construct!

Stop paying your credit cards. I did, years ago. Got a CCJ of course but it was wiped off after 7 years and then I was able to get a mortgage.

Don't sell your house to pay off credit card companies! That would be your third and most damaging mistake

Write to your creditors and explain the situation. Your mortgage bank might give you a payment holiday. I know it adds to the term but it will give you some breathing space.

See if citizens advice can help you particularly as you have legal debt.

Is there anything of value you can sell?

I don't think selling your home is a good plan because you would have to pay rent somewhere.

When my waste of oxygen ex-partner left I was in debt to utilities and rent. I contacted everyone and explained the situation and I was given more time to get straight. It took a year until I was up to date.

It's so stressful.

If you had no debts to pay besides a mortgage council tax and utilities, would you be able to manage?

If so then go speak to CAB or one of the debt management advice groups like step change or Christians Against Poverty.
You have a few options there:

A debt management plan continues as long as it takes to pay all the debt off, trashes credit .

IVA is a 5-year debt repayment plan, advantages are that you only pay what you can afford, and after 5 years debt is cancelled, trashes credit for 6 years. You cannot miss payments or IVA can fail and you're back to square one.

Both of the above look at your income, make allowances for mandatory payments you have to make and give you an allowance for emergencies like clothes, birthdays, pets, etc then they split what's left between creditors.

i have several friends who have had trouble paying their mortgage. Solutions have included:
bunking up with the kids in 1 room and getting a short term lodger.
Renting out their house for the summer whilst they lived ina cheap caravan & tent at the bottom of their own garden.
Asking/ begging their relatives for an advance on any potential inheritance.
Pride does nobody any favours here

To answer some further questions/to clarify.

Yes I’ve considered crime - but I wouldn’t be able to afford the increased energy bills for a cannabis farm so I ruled that out.

I’m not paying interest on the credit card debt, it is all on interest free credits cards which I move around as required and make minimum repayments.

I don’t have anything of particular value to sell but I have popped a few bits on Vinted recently which help towards food costs but it feels like a drop in the ocean.

it’s the increase in my mortgage since I took it on that has been the real killer and every other bill I have has gone up too.

I’d echo posting on Money Saving Experts Debt Free Wannabe board. There are very experienced posters who really understand debt and debt repayment who can advise on how best to move forward. I know it seems hopeless just now but there’s always a way through, I think a lot of people are teetering on the edge just now sadly but I’ve seen some fantastic advice on that board.

The dishwasher and the car have scared you and made you realise that you have no wriggle room at all when it comes to unexpected costs so I get why you are panicking now. Don’t sell your house if you will be paying the same or more in rent.
You aren’t paying interest on the cc which is great, how much are you managing to reduce that £30k by each month?

Yes that’s right, @onemorerose. Every unexpected cost makes me anxious. And I already check my bank balance several times a day - I’m not sure why

I pay £450 a month on debts - car loan and credit card repayments.

Thanks @Jellycatspyjamas, I’ll check it out.