Up financial shit creek without a paddle

[mummydoingamasters]

Just as the title suggests really!

I've had to pull my head out of the sand today and face my reality. Not including my husbands debt (which is loose change in comparison) I have nearly £20k of debt. Not including my student loans (UK so not earning enough to pay back).

I did an online enquiry and got a call back and I was given the advice that bankruptcy is probably my only option. I just feel so bloody defeated.

The advisor said I wouldn't get a DRO as I'm married and our income is too high! The only criteria I can find is that we have to have less than £75 a month spare, no cap on what comes in.

I want to avoid bankruptcy if I can because our car is on finance and can't afford to be without a car that fits us all in.

I'm just at a bit of a loss really and want to go back to ignoring it which isn't very grown up I know, but I just don't know how to get out of this hole 😞

OP have you spoken to all the companies you owe money to? You can sort out a debt repayment plan yourself paying £1 a month if it’s all you have. You must stress to the companies how much this is affecting your mental health. They have a duty of care.

Have you spoken to your husband - how are your finances divided?

Sorry to hear this. The CAB should be able to help.

Who did you speak to. The 3 organisations to approach are
CAB
Christians against poverty CAP
Step change.

Are you entitled to any benefits. Have you done a calculation on the Turn2us site or entitled2

Can you approach each debt yourself. Ask for them to be frozen until you can make an offer?

Well done for starting to tackle the situation. It is the first step to getting some control of your money. And working out a budget.

Who did you speak to. The 3 organisations to approach are

CAB
Christians against poverty CAP
Step change.

this *

contact all 3

Use this and fill

Step change have a good spreadsheet as a starting point, I've done debt counselling at my church but I use their spreadsheet to start off.

As a married couple your finances are considered joint so he needs to be part of the solution too. Could you take on a second job, could he? Can you cancel expensive subscriptions or contracts? Your creditors will negotiate on repayments but you need to maximise income too

I owed almost 20k. Stepchange helped my set up a DMP. Give them a call

What have you spent it all on? Are these credit cards?

Can you do a bit of a break down so we can see the numbers?

The sticking point with a DRO could be how much each of you pay out on household finances. It will need to be clear that the household is short of money, rather than you having the DRO and your DH having money to save and spend on non essentials for the family. But that will depend on all your incomings and outgoings.

Who's name is the car finance in? Do you own or rent your home? How has the debt built up?

Before you commit to anything it's worth having a really good review of your finances because if you sign up to any sort of serious debt solution like a DRO, or a debt management plan, then you're effectively banned from credit for 6 years, which means you have to live within your means and cope with all your annual and irregular expenses from your normal income.

So as well as setting your budget to include your regular bills, you need to account for everything else you might have to pay from time to time, like car repairs, washing machine replacement etc. Because it will happen in the next few years and you need to have a modest amount put by to address the problem - you're not expected to live on beans and do without essential household goods until your debt is paid off. You're allowed a fairly normal, albeit modest life. Have a look at:

www.moneysavingexpert.com/loans/debt-help-plan/

Thank you everyone.
The £20k is between credit cards, loans, and a catalogue account.

We basically live payslip to payslip every month. I work part time term time only (two young children) and husband earns about £23k. I am applying for better paid jobs to try and resolve and I already work a second job when I have the energy.

The people I spoke to were none of the 3 recommended so I will start there tomorrow. I've written down all my income and outgoings. I just need my husbands (we have a joint account for household stuff but keep separate accounts for any personal spends). I would have just preferred to keep it separate but obviously I can't.

My debts are no secret. He knows, has even contributed to them himself.

I already claim all eligible benefits including childcare element of UC.

As well as contacting the charities look at money saving expert - debt free wannabes boards. They are harsh but will help you find ways of saving pence here there and everywhere.

Ok, I don’t think you can afford to work part time. How old are your kids? Do either get the 30 free hours? When do they start school?

Good luck OP. You will come out the other side with persistence and sticking to your repayment plans. We did, took 8 years but feels so good when you’re debt free!

They are 2 and 4. One qualifies for 30 hours in September and the oldest is at school already but uses after school club too.

The cost of childcare throughout the year makes working part time the, slightly, more viable option.

How many hours do you work?

30 hours a week during term time

There are plenty of evening jobs in pubs, restaurants, care available that can increase your income

just a couple of evening a week 8 hrs work at minimum wage would increase your income by £264 a month

if you both did 8 hrs extra that’s £500 a month towards the debt

With that level of debt I would be looking at moving to a cheaper house in order to pay it off. I’m not sure a few extra hours in a pub would make a significant difference but it would exhaust OP. Can you do something like that, moving to a cheaper house?

More hours when dp is at home, is your only option I’m afraid. I feel for you. It’s tough at the moment.

Wouldloveanother

it was just the thought that 3 years that would be £19000 which on a £20k debt would be worthwhile

its not for everyone though

You have done the hardest bit, to admit there is a problem. I hope your DH is on board with you to crack it together. Because you are married if you can get a managed payback over time it will be joint with DH. Ring Step Change they are brilliant and not judgy. You will need to get more incomings. Can your partner do any overtime in his job? One of you could do a shift in a restaurant or bar a couple of evening a week. The other one a different couple of Evenings or over a weekend. Do you have mortgage or rent? If rent, could you move somewhere cheaper? Apart from bills like rent, council tax, water rates, gas and electric you might find it easier to control your money if you use cash only, no credit card. Ring Step Change and they will help you sort it out. I know a person who was £31k in debt and he turned it around without going bankrupt. Try to avoid that at all cost because it will always be with you and preventing you from getting things and doing things in the future.

I have a second job already that I do when I'm not completely wiped out. Without being completely outing, my job is quite full on but it ends soon and I am applying for a higher paid role.

We live in affordable housing so our rent is as low as it will go. We have cut back everywhere we can which is why I'm now looking at debt because I pay out nearly £400 a month to that alone.

In all honesty, my childcare costs have been spread across the whole year so I have a fixed payment rather than one that fluctuates. I'm lucky to have a very understanding childcare provider and I claim back 85% through UC.

I have 2 credit cards which payments are £300 for. A credit agreement which is £30, a loan which is £70 and a catalogue which is £40. I just need to sort it so there's an end in sight, hopefully without destroying my credit rating too much.

Do you own your own home? If you do, could you remortgage and remove some equity to wipe the debt?

Sorry just seen you rent. Hope you can make some payment plans with some of the companies you own money to so you can avoid bankruptcy. Do you have anything you can sell? Even old clothes, I've made £200-£300 selling on vinted in the last few months.