I just can't pay everything!

[IvyLeaf]

That really. We're up to our eyes in debt and need to find over £600 more than we have this month (week actually) to meet minimum payments to various catalogues. I can't find this. This is has been fairly ongoing and twice now I've taken out new cards to put minimum payments on. They're maxed. We simply cannot pay right now. In theory we have enough coming in each month to cover the payments but in reality we just can't meet every day costs and these. I've done the Step Change online assessment many times and it just thinks that we have enough coming in so should pay, but we simply don't and can't!
Our rent is paid, council tax is paid and basic bills, it's just debt repayments we can't manage. I don't know what to do? I have to feed the children, get to work, put petrol in the car etc but if I do that we can't pay these debts. Most are all one month overdue already but the money to cover them just isn't there and step change haven't got any suggestions. We can't cut back, we're already shopping in Aldi, we feed 4 children and 2 adults on £80ish a week, drive an old (broken) car that is essential due to work location. We claim all we're entitled to. Our household bills are as low as they can be, regular meter readings mean we just pay for what we use.
We have no mortgage (renting) so all debt is unsecured, but we're juggling 8 credit cards and 6 catalogues between us. All have been used for basics like household items/appliances, clothes for children. There's no extravagance. We both work, our childcare is the cheapest option we could find. It's just shit.
I'm currently tempted to just let everything default but we had this problem 6 years ago and those problems have nearly dropped off our credit files and now this. It's relentless

It sounds like you're being hit by two things:

• the sheer cost of servicing your debt
• not planning for non-monthly expenses.

When you did the calculation on Step Change did you include a percentage of non-monthly expenses being budgeted for each month, e.g. Christmas, car repairs, emergency fund? You will never be able to get on an even keel without knowing your true expenses as every time you think you're on the up something else will come along. And with no margin for error in your budget you can very quickly tumble back into a worse debt position than before, as you're finding.

I would do a Statement of Affairs at The Motley Fool or MoneySavingExpert and they will really rip your budget to shreds looking for things you've forgotten or things you think are completely justified ('yes I do pay £50 a month for a smartphone contract but so does everyone else, right?'). This will give you a much more accurate picture of your finances.

I would then speak to National Debtline as it sounds as if you need a debt management plan to get these debts dealt with, whilst also looking at the root cause for your repeated overspending (not meant to sound judgemental, because of the snowballing of interest charges, you don't have to overspend by much to end up a long way in debt, but you comment that you defaulted on debts six years ago).

Possibly declare yourself bankrupt....you can only worry, think about and take so much..you are human....this is the only option I can see.....wish you luck and please take care....this s not going to go away and will eventually affect your health....

If the step change assessment says you have enough money then you need to go through your outgoings again and work out what you're missing out. Use the money saving expert statement of affairs template.

we can't go bankrupt, we don't owe enough or indeed actually need to.

We do 'overspend,' in terms of our budget, but it's on basic living, not extravagance. It's frustrating because on paper the budget is fine 'next month' but it's always next month and never this one! DH gets a bonus at the end of this month that was supposed to be buying a cheap second car but I will be diverting to pay off and get back on track. It's just so frustrating to be trying so hard and failing.

I should also probably have noted that the previous problems were when I was a very young, single parent on benefits. I had nothing and was, quite frankly, utterly stupid. I deserved to be in a mess then I was so shit with money!

I will go to MSE. They're scary though.

Good advice above. In the meantime, you can always phone your creditors and negotiate a reduced payment plan. They should agree (and freeze interest and any late payment charges). It sounds scary but I have done this many times and they are usually nice (if you get an arse, ask for their manager).

^ Should add, that will also stop them hassling you.
Btw work out how much you can pay them now, even if it's £5 - they will accept it as it's better than nothing.
Iiwy I would actually agree a realistic monthly amount and stick to it, and use your Dh's bonus for things you need/ save it so that you don't get hit with unexpected expenses down the line.

Thanks, Broken that's really helpful. I've been head burying and avoiding the phone calls

get on the phone and get those debts frozen. There IS a way out.

Everyone pays only for the energy they use; are you on the cheapest tariff? Do you switch insurers each year? Are you on a water meter?

And as you hopefully realise, forget tatmas and presents. First things first!

Yes, cheapest tarrifs for everything, and I mean we're not in credit/overpaying for energy.
Insurers always switched, no water meter as we have more people than bedrooms so cheaper as it is.

You're welcome. Been there

I just wanted to come back and thank everyone again. I bit the bullet and called creditors and they were all extremely helpful, our credit cards even agreed to 'match' our half payments in order to meet the minimum. Feeling much better now.

I hadn't posted before but have just seen your update.

Well done for biting the bullet and making those phone calls, I can understand that that must have been very difficult.

I hope that everything gets a bit easier now for you and your family.