I'm really frightened

[herbaltea21]

I've name changed for this as I'm ashamed, frightened and embarrassed.

I am a single parent to two children. I am in the process of moving into a council property. I was married but my husband walked out. I was a victim of mental abuse and I had support via women's aid and minds matters to help me overcome what I went though.

Over the past couple of years I have accumulated debt of just under £2500 through credit cards and 1 personal loan. How did it get so high? I just don't know. I just haven't been able to get my head above water since my husband left me and I have fallen into the cycle of living off credit cards.

I have just completed a step change online account set up as I cannot afford to pay my bills now my circumstances have changed. I NEED to move my life forward. I need to get on top of this. It recommended me to apply for debt breathing space and to call them tomorrow.

My whole body feels stone cold right now. I'm so embarrassed, I feel like a complete failure. I feel like I'm going to have no options. I'm so worried about loosing my bank account/my job (I work in the finical industry and have done for 10 plus years).

Has anyone been here? I am assuming I'll be put onto a debt management plan but my budget only suggests I have £100 spare per month :(

Can anyone help settle my nerves :( any positive stories? Have I done the right thing?

Debt of just under £25000 not £2500.

You've done the right thing. I owed more than that and Stepchange helped me to turn it round.

There's light at the end of the tunnel. Good luck.

YOu are DEFINITELY doing the right thing in identifying the problem and taking steps to sort it out.

Bear in mind that the people/companies towhom you owe the money will have other customers who owe 10x as much as you do, or more. The sums involved will seem small fry to them.

But they're not small fry to you. All the same, try not to panic. You've caught this and will be able to stop it before it's unsurmountable.

Thank you so much for sharing. Do you mind me asking what they suggested for you?

Stepchange will be the best thing you'll ever have done.

Interest will be frozen, as soon as you say stepchange. Then stepchange will liaise with each creditor for you once they receive your budget.

Repayments will be minimal.

The advisors at stepchange are kind and knowledgeable.

Please don't worry, lots of people find themselves in this situation.

You can get out of it.

I have tears I. My eyes reading your replies. I can't put into words how much this has troubled me.
I just haven't been able to breath properly since my husband left because he left me in the thick of everything. I've just felt so incredibly alone

My friend is a volunteer for Step Change. He's really great at problem solving and absolutely loves to make such a difference to people's lives. Hopefully they will be able to help you sort this out now but it's vital you take steps to not get in that situation again as the next time it'll be harder to persuade companies to get on board.

The important thing is to tell the SC people everything - take every bill with you and don't ignore something as it makes you feel too sick to deal with it - they will help you but they need complete transparency.

Step change are very good. You’ve definitely done the right thing and you will get through this 💐

Step change were brilliant with me and really helped. They take all the stress of contacting your creditors and setting up repayment plans away. All you have to do is stick to your budget and send them a direct debit once a month.

In addition to PP have you checked you are claiming everything you are entitled to in order to maximise your income?

Step change was the best thing I ever did, debt free now, the relief is incredible.

I've also used Stepchange and it was life changing. Show them everything and they will tell you your best option to sort all this out, and then contact all your creditors for you.

Please don't feel like a failure, the only way from here is up. All the best

I owed enough for an IVA but I insisted on a debt management plan because I'd have had to declare an IVA to my employer and might have lost my job. However my managers did know about the debt management plan and that didn't put my job at risk. I worked in criminal justice at the time.

The first few weeks were awful as some of my creditors rang me at work as well as at home. Stepchange were unfailingly supportive though and things did settle down. Many of my creditors sold the debt to agencies and I got a lot of default letters. It did end eventually and things are OK now.

Oh god I just started to feel abit better and I've just realised that I missed one creditor off which means they've not been included in my breathing space! I checked my list so many times before clicking submit, I just totally forgot about them :(

Again thank you so much for the support. I have no body in real life to talk to about this so these comments really do mean so much!

That's fine, you can just call them tomorrow and add that one on. For now try get some sleep!

My sister is with stepchange and to echo others they have been fantastic with her and she is looking forward to a debt free and stress free life where she isn't terrified of the post arriving or her phone ringing.

You will get there, you are doing all the right things.

And well done for getting out of such an awful situation. You are stronger than you are giving yourself credit for.

Great advice on here wishing you the best of luck OP 🥰

To echo all the others, you've made an important first step and while it might not feel like it right now, you're now on the road to sorting things out and getting back on your feet.

It's probably worth finding out exactly how your employer will deal with an employee being in debt, or taking formal solutions like an IVA or bankruptcy. It's probably rare that they will actually dismiss an otherwise valued employee due to this, so do check.

With such a small surplus, that could be further squeezed by inflation, and a fairly large debt, it could take a very long time to pay the debt off in full, which is why solutions like IVAs and bankruptcy exist. Can you look at a policy, anonymously ask HR, employee assistance or a union?

It's also worth reviewing your finances in preparation for the next step. You need to build a comprehensive sustainable budget that you can live on long term without borrowing, and only what's left after that being available for debt repayments. Have a look at Moneysaving Expert, which will add suggestions about increasing income and cutting costs, which will help increase your surplus:

www.moneysavingexpert.com/banking/budget-planning/

Good luck!

Thanks all for the support, it's really ment so much to me.
I spoke to SC today and I've filled out all the online details it's recommended a DMP which would last 27 years 🙁
The other options were available but not recommended?
I am going to call them to talk through. I wonder if the other options were recommended as my car has a value of over £2000?

Either way I am breathing a bit lighter today!

A 27 year plan is not realistic.
Please look into bankruptcy. I wouldn't normally say that but I think it may be the best option for you.

Either that look at ways you can substantially increase your income.

So sorry OP, it sounds like an awful situation but you are trying to address it and that’s so important. Hoping things improve for you xx

They said that bankruptcy is not recommended and that I would need to get support from somewhere else for that.
I am earning as much as I can 🙈

Did you manage to tell him about the additional debt?

Oh so what happens for 27 years? Is that the length of time you have to repay everything?

Are you eligible for a debt relief order?
A 27 year plan isn't ideal ...

I agree that a 27 year DMP is a ludicrous suggestion.

Why is bankruptcy not recommended?

If it's because you would lose your job, could you get a different one?

Unless you have a good chance of significantly increasing your income in the short term (under 5 years) or will have a lot more disposable income when your DC are older and you need less childcare, you would almost certainly be better off (as in getting it sorted, over and done with and being able to get on with your life without debt hanging over you) with a formal solution.

What about a debt relief order?

www.stepchange.org/how-we-help/debt-relief-order.aspx?gclid=Cj0KCQiA4aacBhCUARIsAI55maHW5Oss9-ujpjWjXQ5CX33f6Qs84ouOZbuOxP20JQS9U0qSIMvyaTQaAibKEALw_wcB&gclsrc=aw.ds

You say you have £100 spare each month, and it would need to be under £75 to qualify for a DRO. But is your budget comprehensive and sustainable, as in has it accounted for recent price rises, sufficient food for your family (many people in debt try to pay debts and scrimp on food and spend far less on groceries than formal debt solutions allow because your bill can include sundries like batteries and other small consumables)?

If you review your budget, you could find that you have less than £75 available - remember that you won't be able to borrow any money and have to account for all annual and irregular essentials including putting a small amount away so you could replace the washing machine when it breaks, buy school uniforms, pay for things like insurance etc etc.

Have a look at this forum, there are lots of threads where people prepare their budgets before they apply for DROs by making sure they haven't forgotten anything that is making their disposable income look higher than it really is.

forums.moneysavingexpert.com/categories/iva-dro