Can anyone help please - debt

[pansydansy]

Hi sooo..

Dh have been looking over our finances today and it's shocking!

Dh earns a minimum of £2880 a month.

We get £47.12 child tax credits and £302 child benefit a month. Which equals £3,229.12

And our outgoings are month is £3,230.01 a month.

There's £23,987.65 of debt too. And only some of it is being paid which is included in our outgoings.

What are we going to do? Step change can't help us because of dh self employment. Cab weren't much help. Can anyone point us in some sort of direction please.

Dh and I that was suppose to say 🙄

So many typos sorry 😐

There’s a thread on debt I’ve been following that’s really helpful. I’ll try and find a link.

www.mumsnet.com/Talk/legal_money_matters/3436092-a-thread-for-people-trying-to-pay-off-debt

Is there a way you can reduce your monthly cost of debts to at least enable breaking even?

Is your debt loans / credit cards / finance deals? What interest rates are you paying?

Are you renting or mortgage?

I would look at what other interest rates are out there ( fingers crossed your credit scores are still good )

Then either look to consolidate debt if possible into a lower interest rate loan / additional borrowing on property

Or lower rate credit cards ( look at all options before choosing )
Also I would carefully look at bills try to get a fixed deal with electric/ gas perhaps loom at using a company like utility warehouse who in theory should find best deals for you. ( again check this is right for you )

I would make sure I am meal planning and buying in just what is needed.

Any of these ideas new or you already looked into this? X x

What are your outgoings? Any that can be reduced? You need to prioritise rent, council tax and making minimum payments on the debt

Good credit score is pretty much needed for the consolidation idea provided affordability can be met.

Citizens advice might be able to point you in a good direction x

How much are your minimum payments?

Hi thank you all.

No credit cards.
House is rented.
There's a few Loans which are interest free and not being paid.
Our priority debts are being paid.
Our credit scores are poor.
No finance. 2 cars paid for.

Debts we are paying.

Rent arrears.
Housing benefit overpayment.
Tax credit over payment.
Council tax arrears.
And I pay £15 a month to two debt agency's.

Hope this helps.

Cab weren't much help I'm afraid.

I'm going to see if we can get are energy with someone is because it's quite high. I shop in Aldi's and Iceland and spend about £130 on grocery's, toiletries, nappy's, laundry stuff.

We have two cars but are needed.

We have freeview and Netflix.

@BelulahBlanca thank you I'll check it out.

I would learn about personal finance, there are some useful podcasts:
The Dave Ramsey Show - it is US based but the initial three babysteps apply in the UK and later steps can be tailored.
Meaningful Money - UK based by a financial planner. Lots of different topics covered.
Money To The Masses - UK based. Have a look at articles listed under Tackling Debt

Start tracking ALL things you pay. Look at ways to cut back - meal plan and cook at home for example - and look at ways to increase income such as selling stuff you no longer want/need, working more hours, increasing business profits.

The debt free wannabe section on mse might be useful. You are encouraged to complete a full statement of outgoings a nd incoming and posters are good at making suggestions.

@pansydansy when you say 2 cars are needed...think about what you could do if one broke down? E.g drive DH To work, public transport options etc. there may be a way of reducing to one car??

Also I know it’s not much technically but possibly get rid of Netflix?

Meal plan to reduce food expenditures?

Drive a bit less to reduce fuel ?

OK put a list on here or on Money Saving Expert's forum of every single payment out and you'll get great advice.

@Youmadorwhat two cars are definitely needed. Dh needs his to get to work and he works all over. I need mine for dc hospital appointments. We live rurally and getting public transport with 5 kids would be too much. Dh works away a lot which would leave me stranded.

Netflix is only £6.99 a month and is our lifeline. Keeps the kids entertained and as we don't have money to go out we have a lot of movie nights with the kids. Apart from that we do free things. Parks. Walking. Fairy hunting in the forests. In the summer theirs quite a lot of splash parks around.

@pansydansy 👍

How much are you spending on loan repayments per month?

@HollowTalk they are £270, £112.34 and £106.47.

You say you have a few loans that are interest free but not being paid...you do realise once you default they are no longer interest free? Worth checking the current total and interest on these

@popcorndiva none have gone to default yet.

The housing benefit and tax credits overpayments - how much and for how much longer are you paying for these? If they will be paid off very soon, then stick at it and remind yourself that there will be a little bit more to pay against other things soon. But otherwise I would phone up about these and try to negotiate slower repayments.

You state your Dh's "minimum income" - I take it that some months he may get more than this depending on how his self-employed work is going? How common is that, and is the minimum now something you can be confident in? When he does earn more, what do you do with the extra? I'm thinking that you need a clear plan of what you do with any "bonuses" that will maximise your ability to keep whittling away at your debts month by month.

For example, if you know that it will be just a couple of months of better income and then several likely only at the minimum, your budget tells you how much you need to put aside to top up subsequent months to keep afloat. Or, if it is likely that every other month might be better than minimum, perhaps you can prioritise which debt gets paid extra when possible.

I am reminded of what my mother tells me she worked out a few months after she was married, when she discovered a whole lot of stuff my dad had on hire purchase and realised she'd been feeding him for months prior, because he had no surplus income. This was after she'd given up her job to get married ...

So yes, increasing income will be another strategy to pursue, but it sounds like you have a lot on your plate at home already. Are there things you can do to help your husband grow his self-employment income / increase its stability further?

@Pythonesque the overpayments are high (several thousand) it's gonna take years to pay them off. But we pay them and it's only £60 for one and £40 for the other.

Yes some months he earns more but that figure up there is the minimum ( unless he has days off) when he's paid more it goes on stuff the kids need, we try and save a little for emergencies ( we've had prescriptions that we've not had money to pay for) it pays for any tools he need too. March- September are the months that he usually gets paid more.

I'm trying to get weekend work to help out but it's really difficult because he will work Saturdays if he can get them. And I can't get childcare for the days that he does, it's just so hard. Always evening are difficult too because he can be home anytime between 6-10 in the evening depending on where he's working and if he's finished.

There are options for the self employed, Stepchange are on their knees with the amount of referrals unfortunately, and although self employed people do have plenty of options it’s more complex work. Which is potentially why they said they couldn’t help.

Payplan also give free debt advice if you haven’t already contacted them.

If you are struggling make sure your priority bills are being paid, these include housing costs, council tax, utilities etc credit card and loans companies can wait.

If you email your creditors saying you are looking at debt advice, they have to legally give you 30 days minimum to find a solution. Many will give you 60 days, and most will stop interest building up or late fees.

You can complete a self assessment for your options on the step change website also, but Payplan are a good option too.

Insolvency, such as an IVA, might work for you. However this is not a quick fix and means you have to stick to a very strict budget for the next 5-6 years, but you could get a portion of the debt written off.

A debt management plan is similar to an IVA, but it’s more informal and you don’t have the option to get debt written off.

Hope you find a debt solution that works for you