Price increases pushing further us into debt

[Undermyumberella]

Here for a hand hold but need a bit of advice.

We’re a family of 5, always been a bit crap with money, but over the last year have really pulled things in due to increasing bills etc. DH and I have some debt from a few years ago which is taking time to pay off, missed a few payments in the past which I know isn’t great, but on the whole we’ve kept on top of it.

We’ve not really had the money to do much over the last year, and I’m sure we’re not alone, DH is on decent money, I work PT as we pay nursery fees and trying to balance this. After paying the bills and food shop and fuelling the car we're pretty much empty. We’re in that bracket where we’re not eligible for UC etc due to earnings but this is all eaten up by paying bills.

With things going up, what we’ve got left to spend on food is rapidly declining. I think the only way out now is an Iva/debt management etc. DH works in finance so this could impact his job and we can’t afford for him to lose it, so he’s understandably reluctant. But I seriously don’t see another option.

We've spoken to creditors and they’ve been willing in the past to put a hold on repayments for a few months, but after this want what was owed back within a few months, so we get a bit of relief but then the payments go up to more than we were originally paying.

My main worry is that we’re currently renting, I know the landlord wants our house back to sell so I’ve got NO IDEA what the hell we can do as we won’t pass the credit checks for anywhere else at the moment.

I’ve tried every little thing to try and make extra cash, matched betting, surveys etc but it’s so time consuming with a baby at home as well as a never ending list of jobs.

How much debt do you have? It looks like the fees can be quite high to set up debt management things so might not be worth it depending on your situation. I'd be really concerned about risking dh's job too, given that he's the main earner.

Is there any way you can take on more work, or your DH take on overtime? It doesn't have to be permanently, but an income boost would be good! The surveys and things take so much time for so little reward.

When will you receive free nursery funding?

One of the things a debt management agreement would do is to get creditors to stop charging you interest for a while. Is that something you could ask them for? They would rather give you that than have you default on the loan!

I would contact citizen information and explain your situation to them. They can advise you further on what the best thing to do in your circumstances. They could put you in contact with non fee paying debit organisation that could help you sort out your problems.
I would not sign up to an iva with some debit management company. I believe that they take a percentage of the money you pay each week or month to them before paying your creditors.
I would also look at Martin Lewis website and see what advice he gives. I know he has a budget plan on this. You need to look at what money is coming in and what your bills are.
You said you work PT and your paying for nursery. Are you entitled to free hours? Are you on the correct tax band? Are you claiming any benefits that your entitled to?
Also could you or your husband parents mind your child when you are in work?
Would it be better for you to work more hours or get a better paying job?
Could you get work evenings in a local shop ie Tesco ect when your husband minds your child? This time of the year with Xmas coming places will be looking for temp staff.

I know when you're in debit you can't see a way out. At the moment it hard because of the cost of living and your wages are not going up at the same rate. You need to get some good advice, budget hard and tell people that you are not buying presents this Xmas.

Cutting spending feels so hard when you are already running a very tight ship. The effort give such marginal gains. I'm sorry you're in such a tough situation OP, it truly sucks.

So what about income?! Finance jobs are so hard to recruit for due to a shortage of experienced staff. Your DH should ask for a raise citing cost of living crisis AND Job hunt. Even if he has only been in his job for one year; salaries are escalating. You can help him brush up his cv and search for jobs. My advice would be register his CV with various branches of job agencies in London, SE and bigger towns or cities stating clearly on the CV he is only looking for 100% remote jobs. There are MANY companies searching further afield mainly out of desperation and as employers are set up for hybrid working, more and more are considering fully remote candidates who are not close to the office, and who are a little bit cheaper as they don't command London salaries. Also if your DH is wfh he will save on commuting costs and it will justify keeping the house warm when your and baby are also st home.

And also how these nursery costs for your DC - are you sure you/DH are using your discounted "tax free" childcare allowances properly? Also: Consider if you could manage FT work. It may seem impossible but don't dismiss this idea yet! 5 days at my nursery works out almost same price as 4 days. It made working FT viable for me with DC1. You may be able to request flexible working frm your employer to help with drop offs and pick ups vs your working hours.

Or could you stay PT and then also take a weekend or evening job when DP is not at work? Just in short term it could help tide you over.

NB that "list of things to do" will always be frighteningly long - if you and DH both work FT you will still cope (unless there are other factors like illness in play). It feels like a tidal wave of tasks, I know - but you just stay on top of the urgent ones, lower your standards of housework, and keep a loooong list of all the things that arent getting done.

Look at Debt management plans. Talk to pay plan, they have been great for us. If you are eligible for DMP it's doesn't show on your search history like an IVA.

Good luck I know it's super stressful but please get in contact with a debt company.

I am a part time debt manager advisor through a charity, I take people through their options and work out a way forward. You don't need an IVA unless things are dire, and I mean DIRE.

Happy to discuss via PM

If you’re not eligible for free childcare, can you or DH get tax free childcare vouchers through your work. I’ve not done it but I think it works by them taking the money from the person’s gross pay, saving about 20%.

Ideas:

1. Turn off the oven about 5-10 minutes before a Meal finishes cooking to save on energy
2. Definitely do a budget every single month on payday
3. Look for better paying jobs
4. Could you and another mum share child minding duties but informally so no need to register with OFSTED.
5. If your phone is out of contract get a cheap sim only deal
6. Cancel any unused subscriptions

OP if your DH does a voluntary write off of debt or is made bankrupt he can kiss goodbye to working in finance again. I'd avoid this at all cost. What about you advertising cleaning during evenings when DH is home or dog walking. Could your DH do some handyman work at weekends cutting lawns, painting etc. Otherwise cut back dramatically on food. Buy basics and meal plan. Stop buying snacks like crisps with no nutritional value. Buy second hand clothing. Get rid of any Netflix and just have Freeview. Sell any expensive phones and get cheap ones on SIM only. Lots of little savings. 5 min showers no baths. No takeaways. You won't be only family cutting back.

Are you married? If so look at whether you're eligible for married tax allowance.

Could your DH take on PT work in a pub/waiter? Or could you go back full time work? I know most money goes in childcare for 2 years but after that some help available. Can you claim UC childcare if you go back to work full time?

Not an IVA, companies charge for them. Speak to Citizens Advice. They have the clout to help with debts. Good luck.

Could you get an evening job so DH has the childcare?