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.

To me £450 is a brilliant amount to be paying each month. What’s the breakdown and is that the only the minimum on each? I would be tempted to look at one of the credit management plans suggested above so you can reduce that amount and get yourself some emergency funds saved.

I’ve lost a house and been through bankruptcy 3 years ago and do have a cc now but it’s to try to build my credit and it’s paid off in full each month. Just to point out that you will be able to get a cc again, even if it’s with rubbish rates. (also check my bank account several times a day but now it’s to see what I have not what I owe)

The money you're spending on credit card debt is what's crippling you.

It might be on 0%, but it's still payments you have to make every month.

Please don't sell you house to pay off credit cards.

And stopping paying into your pension, even temporarily, would be your 4th big mistake. Don't do that either. Just stop paying the debt.

Not my first thought to be debt free a ‘cannabis farm’ more likely to loose your children if you did that, not a smart way to think.

I don’t think renting short term and clearing your debts is a terrible idea. But you need a concrete plan in place for buying another property ie how much will you need to save and when will you be able to achieve it? Renting long term is not good, it offers no security and how will you pay rent out of a pension? You need to be rent/mortgage free by the time you retire. Are you certain you can’t buy anything now with a 30k deposit and no debts? New builds offer 5% deposit paid for example and really low interest rates under the ‘Own new’ scheme.

Use the government charter to go interest free on your current mortgage for six months. It’s available to everyone. Your future mortgage payments will go up by a tiny amount, use an online calculator to work out the amount. Would this pay for your car engine and clear some debts or give you an emergency fund for the future?

Can you downgrade you car?

Could you stop paying into your pension whilst you focus on clearing the debts down? Clearing debts should always come before saving for retirement.

Can you consolidate any of the debts to lower the monthly repayments? Interest rates may drop in August so you may get a better interest rate than you’re currently paying.

Can you increase your current mortgage to clear some of the debts? Some people advise against turning unsecured debt into secured debt but really that’s what you’d be doing by selling and using equity to clear debts, except you get to stay in your own home without the upheaval and expense of moving.

I would not take out an IVA or DMP unless it’s a an absolute last resort. By ruining your credit rating you could be stuck in future. I know someone who took one out, neighbour from hell moved in next door and they couldn’t get a mortgage on a new property because of their DMP. Also when your mortgage fixed rate expires you won’t be able to remortgage to a new fixed deal and will get stuck on a tracker rate potentially causing you financial difficulties then.

If you post your income and expenses and debts with interest rates and end dates we can advise further. There maybe some ways to save a bit on your expenses or clear debts quicker.

Big hugs to you.

Have a look at this debt checker and it should point you in the direction of what your options are www.gov.uk/pay-off-debts

National Debtline offer free advice www.gov.uk/debt-advice

There's a charity called Step Change who may be able to help www.stepchange.org

I hope these offer some help, better than dodgy get rich quick schemes or a cannabis farm!

The cannabis farm was a joke for anyone wondering.

I have a profession that I mostly enjoy and I earn okayish, retraining wouldn’t secure me anything higher than this around here and I use my professional skills in my second job.

if I sell I think it would be very very difficult to get back on the ladder around here. House prices and rent are insane although the former at least seem to have stopped going up.

I only got a pension in my thirties for the first time so I think it would be daft of me to stop paying into that as I’m already behind.

I appreciate the advice and the sympathy in particular, it is very lonely worrying about money all the time as a single person.

Also if your child’s father isn’t paying what he should is that something you could chase up. It’s not fair that it should all fall on you.
You sound so similar to me single mum, starting pension late. Don’t lose your house if you can avoid it. You will have this sorted in a few years if you seek the help there is available as advised above.

He pays child maintenance set at CMS level (not a lot) so there’s nothing I can do there, he doesn’t pay a penny more for uniform/trips etc.

It’s really made me feel like I’ve swapped one type of awful living environment for another one of being in a financial pressure cooker.

You need to find a debt counselling service. Citizens advice used to provide this service

I spent years and years in debt and overdraft. Though I didn't have to do this as a single parent. The thing that has finally helped is moving jobs. You can and should ask your current employer for a payrise, but I've realised many years later than I should, that even if you like your job, moving jobs is how people secure a step-change in salary rate.

Secondly, although I think it is probably good advice to keep your house, if you were renting you may qualify for help towards your rent from universal credit. Disclaimer, you would need to carefully research re your salary, savings etc etc.

This poster isn't wrong. Might feel like the "wrong" thing to do but something like a DMP will trash your credit rating anyway so might as well just not pay! You're no worse off on your credit rating but better off financially.

I'll be honest, I've done it. Now I have a good credit rating again.

The thing to be aware of with this route is you have to cease all contact with the CC companies. Ignore all calls and letters. They can chase you for 6 years from the last communication. Then they have to write it off.

Selling your house would be the worst thing you could do. My sister private rents, DC grown up and left home. She can now only afford a tiny studio, in her 50s. It's miserable for her. Rents will just keep increasing and you'll have no stability. It's not just about currently housing your DC, you have to think long term.

I don't have anything more constructive to add beyond some of the really good advice already posted. But I wanted to add to the chorus of really, really try to keep on the property ladder. Your mortgage has gone up because you did not fix - but you do have options with a mortgage if there is decent equity in a property. If you are privately renting, your landlord can jack up the rent hundreds of pounds per month year on year with zero way out.

I would really try and hold on to the house.

It is worth contacting turn2us

They are a charity that can help you to xhexk you are claiming everything you are entitled to. They also have hardship funds and ... i cant think of the word but its like a scholarship. Basically private wealthy individuals set up a fundto help people with specific things.

Have you considered using a food bank or 'too go to go' scheme?

It's not just for those struggling (and you are!) it helps reduce food waste. Local playgroups and nurseries near me have collection points where supermarkets donate food. A friend of mine uses it and her fridge is stocked with lots of Waitrose goodies every week.

Could the kids share a room? Could you host international students for exchanges perhaps? These are often fairly short term and would be a friend for the kids.

In my experience, I stopped paying credit cards when I knew the house was going to go. Thought there was no point when I’d be bankrupt anyway. They offered me lots of different plans to pay it off. It was very stressful at the time though with them constantly chasing.
Get some sort of debt management plan in place, citizens advice was a brilliant source of advice to me the whole way through, give them a call.

I use Olio when there’s local listings as Too Good to Go isn’t great locally. The food bill is the one area I feel I have been able to make the most savings, I fill the freezer with yellow sticker items and meal plan and have very little waste,I haven’t used a food bank.

Sorry you are in this position OP. It's not just you, a lot of people are struggling out there at the moment.

I agree with the previous advice about contacting stepchange as a first step. I also agree that I have found the Money Saving Expert budgeting planner very helpful in the past.

Can I ask roughly what your main and secondary jobs are? Just wondering whether a different secondary job might be a bigger earner for you?

How old are your kids? Can either of them look at doing a bit of work such as delivering leaflets or mowing lawns in your local village? Not too much to get in the way of school, but gives them a bit of spending money and takes the pressure off you. Also, with the summer holidays approaching can you ask them to declutter their bedrooms and see if there are any unused items that they'd be happy to sell?

Have you checked on the universal credit calculator whether you are entitled to any help? You might be surprised.

@NotMeekNotObedient My children are the opposite sex and one is 15 so it wouldn’t be fair to make them share I don’t think. We are in a student/touristy area though so I wonder if I could sleep on the sofa in the short term.

@Saintmariesleuth

I work in marketing. My second job is a freelance client and it is very flexible (I pick the hours) but it’s a number of hours each week which is an added pressure. I feel lucky to have it though.

My son already referees FA matches for money and DD babysits so they both have their own spends for extras which is very very helpful.

I feel like I do all the right things, there’s just not enough coming in.

No real advice, just sympathies OP. You sound lovely and very rationale, and obviously work hard for your family. Inflation is awful, and it’s not your fault. Best of luck - try to hang onto your home if at all possible.

I understand @SilverliningHunter - we were in a difficult position when my partner lost his job during covid. It's very hard when you have very little to cut back on. I am sure it is even harden when you are the sole earner. Once you're in debt it is very difficult to climb out, but you sound very sensible and I'm sure with some help and advice you can get there.

From what you've said, you're already budgeting, cutting back and avoiding waste wherever possible. It's those repayments that are the killer. Pick up the phone and call for help tomorrow- I wish you the best of luck

Don't get rid if your house. Renting is expensive and goes on forever. I would free up one bedroom (either by you sleeping in the living room or sharing with your daughter.) You may be able to rent out to someone who wants to rent Mon to Fri so less intrusive than FT. You can earn up to £7,500 a year tax free under the rent a room scheme if you are renting out a room in your own home.

I'd try and keep hold of your house. Can you talk to your mortgage provider about lower payments for a few months?