To leave my job & apply for a DRO

[Justkeepsplashing]

Good Morning, please be kind with me as I’m feeling very fragile and sick with worry. I did post on the Money Matters forum but only one person replied. I’ve woken this morning with a horrible feeling and pain in my chest. I’ve made terrible money choices over the years and I’ve no one to turn to in real life, now I’m in a mess.

I’m early 40s from a family where being a single mum in poverty is the norm. I’ve no money sense at all. During my 30s, I fled domestic abuse with two children and moved away. Where we are now, it’s just us and I’ve no family or friends here. I’ve always worked in low paid jobs as a carer, but I went to Uni and got a BSc and MA. I proceeded to do my PhD and worked part time, but my eldest left to go back to our home town as he missed family and friends, and my relative who was caring for him started asking for more money than I could give. So I took out credit cards to send them money or food shopping, and to buy whatever he needed etc.

I left my PhD in the second year, as I needed a full time job and was offered a brilliant role in domestic abuse, but to get this job I’d need a car. So I took out more credits cards to pay for weekly driving lessons and then took a car out on finance in 2020, just before I passed my driving test.

Last year, I made a silly decision and left my job to go to Uni to study social work. Even with the car still on finance and being a single mum (I’m not sure if I have ADHD but I’ve always made silly choices like this).

The time I started my MA coincides with my youngest starting secondary school and their Autism and Anxiety became a lot worse. Over the next few months, whilst studying and being on placement, she was self-harming, school refusal, awful anxiety, aggressive towards me. I have no support from her dad or anyone and In March of this year, I had a mental breakdown and withdrew from my studies.

I went on UC for a few months and I’ve still been paying for the car finance and chipping away at debts but I’m not making a difference - having left the PhD and MA, means I’m now in thousands of debt to the university. I make silly decisions thinking I’m improving things but it gets worse.

I also have over a thousand in arrears council tax and rent.

Over the last few months, my child was allocated a social worker and I took medication for my mental health. My old boss offered me a job and I started last week - I dared to feel that things were looking up until yesterday when my car broke down and the mechanic said it needs a new engine. I can’t afford the £1000+ for that and it’s still on finance. I’ll also lose my job if I don’t have a car as I need to visit clients.

I don’t have a partner or family member I can ask for help, it’s been a tough year and I feel battered. My brain today has told me to give up, leave my job, return the car and get a DRO. I’ve emailed CAB and the finance company but they’re closed until tomorrow.

What do you all think? Please be kind, and sorry it’s so long.

So sorry this is happening OP. Please contact https://www.stepchange.org/

they are amazing and will help you manage this. Things will get better

Thank you so much!

I assume you have looked into the details of getting a DRO (Debt Relief Order)?

• Your credit rating will be affected for six years
• Owning your own property or having assets over £2,000 will stop you entering into a Debt Relief Order
• A Debt Relief Order may be cancelled if your circumstances change during the the 12 month period
• Entering into a DRO will be recorded on a public register
• If you can afford more than £75 after your monthly essentials have been budgeted for then you will not qualify

I have no idea what the best solution would be for you, but I would have thought you might be better off keeping your job and looking at alternative solutions - jobs are not always easy to come by. Have you tried the Citizens’ Advice Bureau? They are often able to help. Good luck!

10 years ago I was drowning in debt, it was about £20k, absolutely no way of paying it off. Constantly being harassed by creditors. I signed upto a debt management company, the contact from creditors was handled by them so I was a little less stressed, but after two years I realised that I was only paying off the interest.
I decided to file for bankruptcy. It was the best decision I could have made at the time. It isn’t right for everyone, and not all debts can be included (I don’t think student loans are).
But now, 12 years later, I have an excellent credit rating so I have access to lines of credit if I need it. I don’t get anything on finance, I have learned to live within my means and save a little every month.

Just a quick note that you don't need to leave your job to be eligible for a DRO, it goes off how much income vs expenditure you have so I'd recommend trying to keep your job, if you can.
As far as I know, you might not be automatically eligible for UC if you leave your job too, you would need to explain that your car broke, your health was bad and you couldn't do the job any more and hopefully they'd agree you didn't voluntarily leave and pay UC.
CAB should be able to advise you on this aspect as well as the DRO so have a good chat to them.

How much do you owe? (You don’t have to tell us, you just need to make sure you know the figure! It might be less, or more, than you thought).
your first step is to work that out, pay rent and council tax as a priority debt.
try and consolidate the credit card debt onto an interest free credit card

You need to pay your rent so at least whatever is going on you have a stable home.
Could you seek budgeting help?
Would moving closer back to family & friends help with support?
Is the family who are looking after your son unable to recieve financial help besides from you?
I am unsure about your car, job.
Is it possible to get something low stress that suits you & being available with your child & transport.
You have goals and aspirations so do not be to hard on yourself.
Unfortunetly cost of living is impacting many people.

I would highly recommend you contact your nearest Citizens Advice and ask for a debt assessment. Most of them have deals with utlity companies and local councils to wipe out arrears if you pay a very small amount each month, plus they have specialist debt teams to help you decide what the best options are for your situation.

I can’t move closer to home - my ex partner lives very near to my family. Also, my family are very toxic (my mum was physically abusive to me as a child and I went to live with my Nan. My Nan is the relative who cared for my son but he’s an adult now and she’s elderly). I will get the bus to work for as long as I can, and wait to hear from CAB.

In the thousands definitely - I’m guessing near £20,000.

I don't have any experience in this area, but broadly I feel that sometimes you need a "re-set". Some of the options you are considering may allow that.

However I think if you do re-set then it will only work if you manage to get better financial habits. You wouldn't have access to credit so that may help but eventually you will need to understand your finances, stop making impulsive decisions and look for financial stability.

You have a lot of life left and you can rebuild and regroup. Find the people who can help you and commit to taking things more slowly.

Thank you, I’ve always kept my work coach updated via the UC journal and let him know I’ve started working full time again.

would anyone have any advice regarding the car please?

Hi OP. I have some knowledge and experience here. The advice you’ve been given to speak to a debt charity is definitely right. Stepchange is good, as is CAP, and other more local ones.

It sounds like you’re a bit hazy about your exact financial situation. I know it’s scary, but working out exactly how much you owe, down to the penny, is the first step to coming up with a plan. Ask a friend to do it with you if this sounds a bit intimidating to do alone. You also need to work out a monthly budget - how much you have coming in, and how much going out. The debt charities mentioned should be able to help you with this.

Lastly, as already suggested, don’t quit your job. You can do a DRO while you’re working if your financial situation is still tight (<£75 of spare income a month, plus a few other conditions). Being in work brings so many benefits, to your finances but also often your mental health. It sounds like you have a meaningful job with a good boss. That’s a rare and precious thing, not to be given up lightly.

Thank you so much for your kind words. Yes, my boss is so kind with me and we are lucky to have her. I am hazy with finances, I’ve put everything in a drawer and buried my head in the sand.

what do you think I should do with the car? What are my options when a car breaks on finance please? Thank you

Well, there are two questions: what are your legal rights? And do you need a car going forwards?

For the first, check your finance contract. It might tell you about what happens if the car breaks down. Did you buy the car new or second hand, and is the finance contract PCP, Hire Purchase or a simple loan? If it’s a loan then you’re probably on your own. If it’s PCP you may (may!) be able to get the finance company to absorb the costs. But the only way to know is to actually read the contract you were given.

(On a separate note - how old is the car? Modern cars are well built and don’t normally just suffer total engine failure. Were you maintaining the car according to the recommended schedule? Was the previous owner?)

The second question is do you really need one. When I see clients with the debt charity I’m involved with, car related debts are often a major issue. But after a little probing it often turns out that they want a car and find it convenient, but don’t absolutely need a car. Sometimes they don’t fully realise how much the car is costing them either. Is this you? Do you need a car because driving is an intrinsic part of your job (maybe you carry tools, maybe you’re a carer and visit clients in difficult-to/reach places)? Or do you just use the car to commute to your work because that’s what most people do? If so, have you considered alternative means of getting there? Is there a bus route? (Even one with a twenty minute walk). Could you cycle, or maybe use an e-bike? Is there someone you can car-share with? Perhaps the answer is no and the car is absolutely necessary - but it’s worth seriously asking this question first. It could save you literally thousands per year.