In a big mess.. help!

[Rockbottom22]

Hi been on here a while but named changed . ( Please no nasty comments)

I've buried my head in the sand over this situation for a long time and now I need help taking the first steps to sort it out.

Bit of background I'm early 20's two children and got a dp been together since we were teenagers. Have both struggled with money . Come from very poor families and falling pregnant at 18 obviously didn't help .

My dp has got a good career that he's been in now for two years making £25,000 with payrises every year not huge ones but hopefully in the next few years he should increase to £30,000.

I'm not working due to having 1 year old and before that only managed to do part time minimum wage jobs.

So the problem is now I have about £7,000 or more not quite sure in debt from things like catalogue, credit card council tax mobile phone bill . And I've been ignoring this for about a year and now my credit rating is in bit and I'm getting all these letters .

But I don't know what to do. I don't have a job so have no way of paying it off. We struggle as it is to pay all our bills as it is. We both aren't good with budgetting. My dp also paying of a trust deed he's one year in of about £120 a month for his debts.

The thing is I am looking for work but I haven't been getting any interviews and even if I did we couldn't afford childcare.

I dont have anyone to talk to in real life and I suffer with depression this is making it worse . So even talking on the phone sets me into a panic . I know I can't ignore the problem much longer. I fear I will get taken to court etc.

What do I do 😭 how do I get out of this mess . Sorry for the long rambling post but I need to get it off my chest and make a plan.

Thanks

OK, stay calm.

First things first - does your DP know the truth about the extent of your debt? If not, you need to sit down, tell him everything and go through your financial situation together.

The one debt that you MUST prioritise is the Council Tax as the ramifications are most severe for that one.

But given your situation, I'd advise you speak to a debt organisation like Step Change or Christians Against Poverty. They'll be able to help you find ways to restructure the debt to make it manageable.

Once this immediate crisis has passed, you and DP need to look at your spending to work out where you're going wrong (are you frittering money on treats you don't need or is there a fundamental gap in your finances). The Money Saving Expert website is a brilliant resource, you should check it out.

You've done the bravest and most important bit acknowledging your problem. Best of luck.

Second the recommendations for Step Change, CAP and Moneysavingexpert.

At some point, whoever you ask for help is going to want to know about your budget. I'd go one step further and read through this, and do everything that is relevant. You might find you can claim extra benefits and trim some essential costs, which leaves more left for having a life and paying debts.

www.moneysavingexpert.com/family/money-help/

Also get your DP on board, because if he's not, you could be doing all the good work in the world, and he could be undoing it by not sticking to whatever budget you work out.

Like Lipstick says, you need to prioritise.

Firstly you need to keep paying your normal essential living expenses - rent, bills, food, travel to work, DC expenses, even a small amount for annual and irregular expenses like insurance, Christmas, car maintenance, white goods replacements.

Only then do you need to pay your debts after everything essential has been covered - if you can't pay all your debts without missing out on essentials, that's when you need a more formal solution. The mention of a Trust Deed suggests that you are in Scotland, so if this is correct make sure everyone you talk to/post online knows this, as rules and procedures maybe different.

In order to up your income, are you able to work when your DP is at home to look after DC, so you don't need to pay childcare? Although you might be able to get help with most of the cost as you are on a low income.

I echo previous posters and recommended StepChange, they are absolutely wonderful OP.

Yes step change helped me in 2014/5 and were fantastic. Free for all and no judgement or pressure.

You'd probably be best looking at your budget jointly. Council tax is a joint responsibility so needs to come out of the household income.

Pool all income

Pay all essentials including savings for joint essentials like broken white goods, Christmas, DC clothes, insurance

Equal small amount for personal spending

What's left is available to pay debts, although the Trust Deed probably needs to come out of joint essential spending, unless it was run up due to your DP spending on his own interests, as a formal debt payment, so has to be paid.

Echo what PPs said, get proper help, we can only give tips on here as we don't have your info in front of us.

Prioritise Council Tax.

Get all the statements together. You need to know exactly what comes in and what goes out. It really is surprising when you sit and analyse it, for example, after mortgage, our biggest expense is food (Tesco).

How much is the mobile phone bill? It really shouldn't be more than £15 p/m per person.

Luxuries like Sky packages etc need to go.

Now is a great time to look for seasonal work over Christmas, which will give you a bit of extra £ and can be evenings & weekends meaning no childcare costs as DP can childmind.

Do not buy anything else on the catalogue/credit cards. Use the tools on MSE etc to see if you can qualify for a 0% card and transfer balance to that, to pay of a little each month.

Have a clear out and do an indoor car boot. Can make about £80-100 this way.

Good luck.

What the previous posters said and I’ll suggest getting a job around when your partner is at home to look after the 1yo. One of my friends was in a similar situation and she got a night care job in a care home. She only works 2 nights a week and because there’s no childcare cost, her earnings was enough to make the monthly payments on their debts. Many care homes here are always recruiting anyway

Oh gosh I would def make the council tax a priority. And contact step change ASAP.
How does your partner think you are paying for all this without any earnings? Could you list you outgoings and we could try and help you budget better? You need to takle this together.

Also you will need to get a job nows the time. Work in the evening when your partner comes home, care work supermarket, pub work. OK mostly only 8 or 9 per hour but you could easily make 100 a week towards your debts and living costs. Start looking for evening work.

Agree with above posters about contacting Stepchange.

Do you receive any tax credits or UC? If not, it might benefit you to apply for the latter to help with cost of living, freeing up some money for your debts. It will also help with childcare costs. I assume you are getting child benefit for the children.

benefits-calculator.turn2us.org.uk/AboutYou

HTH.

You say you don’t have any money - don’t you and dp have equal spending money since you are a family? If not I would say that has a lot to do with how this has occurred.

i’m on benefits and recently split from my partner, which has left me in a massive pile of debt that i have no way of dealing with.

i plucked up the courage and called Stepchange. i have diagnosed anxiety and am terrible at phone calls, but they could not have been lovelier or more helpful.

it’s not an easy out - i have had to face up to my debt, give Stepchange outstanding balances (which was horrifying) and i’ve had to do a lot of paperwork - eg writing to my creditors to advise that i’m working with Stepchange, providing Stepchange themselves with signed paperwork and evidence of my income etc.

they went through my budgeted outgoings with me on the phone in great detail, so you need to be prepared and have all the information at hand. one of my debts is a loan that my ex-partner signed on as Guarantor for. it has already defaulted to him, but Stepchange have included it in my debts and will include it in the Debt Management Plan they will submit to my creditors.

the thing with Stepchange is that they will recommend the best course of action based on your personal circumstances - what they are suggesting for me may not be the best solution with you, but they will ensure you take the best course of action.

you need to do this now, OP, before it gets any worse. get all your paperwork together, have your budgeted outgoings listed, and call Stepchange as soon as possible.

it was terrifying, but it looks like i will be able to keep my head above water, rather than continuing to sink.

best of luck.

Step change are good or if you want face to face citizens advice usually have debt advisers.

Well done recognising the problems.

www.stepchange.org/how-we-help/debt-advice.aspx

www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/

Another one recommending a debt plan - we used Payplan, free but run by the credit industry. They negotiated interest freezes on most of our debt. £37k over 6 years with a similar income to yours - hard but we did it.

Council Tax takes priority because they can take out a criminal prosecution for non payment. However you can ask for a payment plan to pay back any arrears.

Also dig out all your statements, your partners statements and go through them to work out exactly what you are spending your money on. Work out what your spending triggers are - mine are catching a train, buying books & magazines. I got into the habit of buying a coffee and calling into Smiths at the station- now I carry a flask, download magazines and get out a library book. When that saving is scaled to once a week for 40 weeks a year it adds up.

Go through all your spending and strip it back to basics - contractual, roof and just enough food to get through. Anything else is a luxury - think about these things as essentials skews your perception. TV, phones, car, nights out, clothes, holidays are not essential. they are nice to have but spend on them thoughtfully.

Most importantly your partner & you need to be totally open and honest with each other about what needs to be paid back - it will be impossible for you to plan properly if he views your savings as his to spend, because there is an unexpectedly large amount in the bank at the end of the month.