Credit card debt - please help

[Feelingverystressed]

I'm a single mum with three DC, two of them under 2. Due to very expensive childcare where we live plus XH not paying any child maintenance (case opened with CSA but they're dragging their feet) I'm unable to return to work until youngest DCs start school, and as a result I have been using my only credit card to pay for extras every month such as uniforms, car servicing, electricity bill etc. Essentials and rent are just about covered by benefits. I have managed to accumulate a credit card debt of 15K during the past two years (card which is now maxed out; really high interest paying nearly £400 monthly on interest/min payment) plus a bank loan of 15K which I used to pay for my divorce.

It has been a really bad couple of months with quite a few unexpected expenses so I'm finding myself now with no credit card available to cover those extra expenses (as I'm over my limit) and no other way to meet now my usual monthly expenses with the money from the benefits I'm getting. I recently applied for two different 0% balance transfer credit cards (as my credit score was excellent) but they were declined.

I'm planning to call both my bank and the credit card company and ask them whether I would be able to miss one single payment this month; not paying those amounts would help me get back in track for future months...

Is that a really bad idea? I'm aware that it will affect my otherwise impeccable credit record but I can't find of any other way to find the cash for this month's living expenses. I've been ebaying everything I could around the house but it's just not enough.

Any advice on what to do would be much appreciated, feeling very stressed about this whole situation, especially as there's nothing I could have done to avoid getting myself into so much debt :-(. Thanks a lot in advance.

never been in this situation but can you make an appointment with your local citizens advice centre to discuss?

as i say i dont know much but they should be able to advise.

there is also the money advice service which i think if a free telephone service who can discuss this with you and offer advice. good luck

Thank you ginger, will check them out.

Bankruptcy might be an option, but speak to CAB.

CAB will most likely book you a generalist appointment first. You need to be 100% on all income/expenditure - there are forms you can download on their website to make it easy to organise.

Step Change is a great organisation and easily googleable googleable. You may also need a benefit check to see if you're getting all you're entitled too.

Lastly, maybe think of things you could get rid of. Tv contact, downsize photo contact etc.

Thank you all. I'm not sure I want to fill for bankruptcy though ....If I drastically cut down on everything but essentials I can manage monthly expenses moving forward so realistically I would only need help with a one-off sum this month (hence trying to avoid putting the money I have on to paying my credit card). I'll be returning to work in a years time anyway as soon as youngest DC start school so not a long term issue.

Thinking that surely one single missed credit card payment (and warning the credit card company in advance) is better long term that filling for bankruptcy....?

they may be able to help you arrange more manageable re-payments. there is also a step before bankruptcy if i am right.

if you wont be seeking employment for another year i think you need to think a bit more long term than just this month. also i doubt anyone will give you any money just help you manage the issues you are experiencing at the moment with repayments.

try not to panic though theyre are people out there who can help and people that have been there before or worse.

filling the forms in is a good idea as you might get a bit more insight seeing it all written down.

if you start missing payments it will really screw your credit rating to the point where you probably may aswel be declared bankrupt. if anything i would try and arrange a smaller payment.

i dont know if this is hear say but i think i have heard before that as long as you show you are trying to pay e.g. some form of payment then they have to accept that. could be completely wrong though.

Thank you ginger. It is reassuring to know that there's people out there who can try and help me sort this mess out; it's all very stressful especially as I would have virtually no debts weren't it for my XH being a complete idiot .

I am already paying the minimum amount on the card so not sure whether they would accept even a lower payment? I'll be ringing the organisations mentioned upthread on Tuesday and see what their advice is.... thank you again

I second contacting StepChange, they are a very helpful organisation.

If you are using a credit card to pay for every day living costs, it's not sustainable and you will only spiral further into debt. As you are only paying the minimums and the interest will only be increasing you won't ever pay it off.

I was in this situation once and StepChange helped me realise that the only way to go forward was by starting a debt management plan with them to pay off my debts in an affordable way. They negotiated with creditors and worked out how much I could pay each. Your credit rating is worthless when you are using credit to meet essential living costs. It took me several years to pay everything off unit was completely worth it. Please go on their website, it's free advice from a national debt charity

I went bankrupt with advice from Stepchange a few years ago. It's a last resort but it doesn't impact as badly as many people fear - I was still able to have a bank account, debit card, online banking etc. I am rebuilding my credit already with a credit card which I pay off in full monthly, and it hasn't affected my job. If you're on benefits you aren't required to make any payments once bankruptcy is filed and everyone gets discharged after a year (which means you're no longer responsible for paying the debts), so it can help you move on far more quickly than repaying on a debt management plan or paying the minimum amount.

It could take you decades to repay your debts, even if you return to work, as I'm sure childcare expenses would eat into your salary a lot. Whereas I've been a discharged bankrupt now for less than a year and have been able to accumulate some savings and not have any further debt hanging over me, and it will fall off my credit file in five years.

If you call Stepchange they can go through your income and expenses and realistically assess what options are open to you. If you're renting and don't have major assets then it's more likely that bankruptcy would be suggested, but they can only judge it based on detailed information on your circumstances.

About 6 years ago I'd maxed out my credit card and couldn't make a payment. I asked could I miss the payment and pay double the next month. They tesco credit card said that was only possible if they put me on an agreed payment plan which would affect my credit rating. They couldn't do it as a one off. Scared the shit out of me.

Luckily a family member gifted me that month's payment. No idea what I'd have done otherwise.

It's a horrible feeling and I sypsthise.

Given you've no job, why batter yourself with those massive repayments? Go to the CAB and they will help you find a path through this. Don't worry about your credit rating now - you've got actual life stuff to get through.

Thank you all. Very true Down about actual life stuff to get through ... I've always had my finances under control but XH has really played a number on me . I am embarrassed enough about receiving benefits, having to potentially file for bankruptcy is going to make me feel so much worse........

You needn't feel embarrassed about bankruptcy, you're unlikely to need to tell anyone if you don't want to except for specific financial circumstances. None of my family or friends know and it won't come up on a Google search. It appears on the insolvency register website but it would be rare for anyone to search that specifically. If anything you will feel much less stressed once the burden of debt is lifted.

Op I was in this same position after my divorce. Stepchange put me on a debt management plan. Hopefully when you start getting maintenance payments and go back to work, things will get sorted. But for now please contact them to arrange reduced payments, even if that does impact on your credit rating. Credit ratings can be improved later. I've now been offered mortgage which I never thought would be possible. Best of luck op

Thank you, so much. It is a huge burden, it really is . I'm the only one providing for my DC and (although not my fault and completely out of my hands) I have messed up royally finding myself in this position.

I'll be ringing Stepchange in the morning. I currently pay a total of £600 monthly on both the loan and the card, it would really be amazing if that amount could be decreased somehow...

Thank you all again

I got into difficulties after my separation and divorce with credit cards too.
I don't know what I'd have done without Stepchange. My debt management plan doesn't finish for a while but I can see the light at the end of the tunnel now.

Good luck.

Thank you Ilove