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.

You should be able to extend up to 40 years OP. Better than going back to renting!

We've just extended ours to 35 years because of nursery costs

I think the repayment break makes the most sense so I’ll look into that tomorrow.

I could take a tenant when my eldest (hopefully) goes to uni but that more than three years away and this feels like a half life in the meantime. Also then I’d lose single person council tax discount, energy bills would go up plus sharing an already small space with a stranger isn’t appealing but needs must I suppose:

I would take the payment holiday on the mortgage (if you never pay it off it might not matter as you can always downside or move - six months isn't going to make a lot of difference).

Use whatever you pay either to snowball your debts or to get rid of the one making the biggest dent in your monthly income.

It's servicing the debt that's crippling you so that's where to focus your attention. You should contact Step Change to get advice. Even if you are not at DMP stage, it might be helpful to know your other options if plan A doesn't free up enough.

Agree MSE forums are better for this kind of advice. Good luck.

It’s daft to pay into a pension when you can’t afford your monthly expenses. Opting out for a little while isn’t going to have much effect long term on your retirement plans. The money you’ve already invested will continue to grow whilst you temporarily pause your contributions.

What are these jobs please??

How far away from your home is your job?

Shared ownership is a good option for a person on one income. All new estates have some and as the new government has said it is going to relax planning laws there will be more new builds springing up everywhere. I think you need proper debt advice but one option could be to sell, clear all debts and look into shared ownership options. You could rent for a short period. This would preserve your credit rating. One other option could be a Debt Relief order but you really need specialist debt advice as there are probably implications for your credit rating.

Yes I second about speaking to your mortgage provider, it's in their interest for you not to fall in arrears and you'll also find they're very helpful in finding a way forward, the same goes for utility companies, if you say you can't pay it they'll find you an amount you can afford each month, good luck OP, I hope things become easier for you soon.

She won't be eligible for a debt relief order as she is a homeowner.

DMP or IVA are only real options for a firm plan to repay, but before that, I would contact your mortgage provider for a payment holiday or interest-only period.
Try and use that period to either clear one of your debts and free up some disposable income or put aside for an emergency fund for car repairs, or unexpected expenses, so you are less likely to need more debt.

Contact the CC companies and look into reducing your monthly payments. (mention its due to the cost of living, the FCA has instructed all CC companies that they need to help anyone struggling with the cost of living)
Most companies would prefer to work with you and avoid default in the long run.

I understand your reluctance to put your pension payments on hold for a period, but if you cant afford to eat then you may have to as a temporary measure.

Thanks for correcting me “reesewithoutaspoon”. Ignore me OP, I forgot that you can’t be a homeowner for a DRO.

How much is your mortgage as a % of your salary?

How much would your mortgage be on interest only?

Unsecured debts should be your lowest priority at the moment.

My mortgage is 50% of my take home income.

My sympathies to you - it's very hard when you're working all hours, doing the right thing, but having all these money worries.

Your house is absolutely your best asset - prioritise hanging onto it at all costs. The credit card debts can maybe be renegotiated? I would contact the card companies to see what they can offer. Regarding your car and the car loan, have you got any male in your family who is car savvy? You could sell your present car and buy one for cash maybe?

What about your parents - could they help you financially?

Please don't sell your house and rent - it will destabilise your future and that of your children.

You are always going to struggle at that income against mortgage with any debt at all- never mind lots of it. I'm going to go against the grain here OP, I think you should sell and rent-and clear all debt - at least renting you might get some help if anything went wrong workwise.you won't with a mortgage and you don't have any leeway to fall back on if slightest thing goes wrong.. Keep plenty back and maybe as I said before investigate shared ownership a bit further down the line- nothing has to be forever and I do think new routes to ownership may well open up- whose to say as well you might not be in a 2 income relationship at some point or a better paid role - your mental health is important too - and I think a payment holiday whilst maybe helpful for a few months doesn't sort the longer term issue- if your mortgage was 50% but no debt repayments at all- I might say different .

I do kick myself for not fixing as it wasn’t that high a percentage of my income before that.

@SilverliningHunter I feel for you -it's difficult to know what to do for the best - only you know mentally how long you can cope if things are so tight and not having the reserves if things go wrong- I know myself what I would do - but then again I totally hate having no spare money

Is work close enough to bike ride to?

Money worries are the worst!

We were getting into debt each month after I went back to work from mat leave. I worked really hard and became a scrooge and managed to save us about £300 a month by cutting all unnecessary subscriptions and making a food plan and being strict with food shopping.

I think you should speak to your mortgage company and let them know you are struggling, and your credit card company too. Why don't you speak to a mortgage advisor and see what they say. It would be a shame to sell the house as that's your security and would be hard to get back on the ladder if you don't want to relocate.

If you can find a work from home/hybrid job that helps save money on travel.

It may not feel like it but that significant that your CC debt is interest free and you’re chipping away at the total owed each month. Plus you’re managing to pay your mortgage despite a £500 increase as well as all other bills jumping up. You're doing a great job. It must feel joyless and exhausting doing all this and working two jobs and looking after your kids. As well as looking elsewhere I would immediately ask for a pay rise at current job. Look online for advice on this and any prep work for your industry to do in advance to support the request. I also wonder if it might make you feel better to document your debt so you a) feel in control and b) see the progress being made. So if each month you updated a spreadsheet to see what had been paid off and what the balance was now. Also on MSE people suggest different strategies to keep up motivation such as, if interest rate isn’t the decider for which debt to prioritise, paying off a small credit card balance first so you get to tick it off and close it etc. it’s not easy and you should be really impressed with yourself and all that you’re handling.

@Warringstars Thank you for your kind words. You and everyone on this thread have shown such care for a stranger on the internet who is facing a tough time. In a weird way it has made me feel able to cope with my current situation without making a drastic change just because I feel less alone with my troubles.

I really appreciate it.

@SilverliningHunter I think it's the stuff going round in your head without anyone to bounce it off OP - it's like those 4am ruminations we all have!! If you get it out in the open -even on here and you think 'yes there are options' suddenly it can make coping with the current situation better- even if you change nothing- good luck!!

an IVA is much better- you get protection from creditors, avoid CCJ's and its done in either 5 or 6 years depending on house assets etc.

Maybe keep in mind that you can sell and rent in a year, if need be, once your son has done his GCSEs. Moving in year 11 is a last resort isn’t it but you can try other things - mortgage holiday, DMP - first for 12 months