I need help please

A question about : I need help please

Hi everyone. This is my first post on the boards after being directed here by someone else. I'm hoping someone might be able to help me.

I left my husband 5 months ago and moved into a rental property with my 3 children. I work part time earning around Ј10,000 pa.

I was in a bit of debt before but I've had to totally furnish the new house and some of this has gone on credit.

Initially the council wrote to me to tell me I would receive full housing benefit and 100% council tax reduction. However, they have written to me to say that they miscalculated and that actually I will now have to pay Ј200 towards my rent and Ј350 ish towards my council tax for the remainder of the tax year. I have also been over paid and they will be collecting this back from me at Ј31 pw from my housing benefit.

By coincidence, tax credits also wrote to me the same day to tell me that they have also over paid me. I rung them to discuss this and after going through my finances, they are looking into it as my outgoings far exceed my income.

I was just about managing before but having to find an additional Ј300 a month just for rent and council tax has left me panicking. Council tax won't allow me to pay by instalments either and want the full payment now. I don't have it.

I realise now that I urgently need to clear my debts but with nothing extra each month, I don't know how I can do this.

Can anyone advise me as to my next steps in dealing with this please? Many thanks in advance.

Best answers:

• Hi and welcome to the forum.
  Sounds like you are going through a lot of changes at the moment?
  How much do you owe on consumer credit debts in total? up until now have you been able to make at least the minimum repayments on these?
  As rent and council tax are priority debts it may be that if you cannot afford everything that you will need to reduce your repayments to your consumner credit debts or default on payments.
  It might be useful if you start by working out an income & expenditure to see what you have to pay out on essentials etc before making debt repayments. On here this is called a statement of affairs and this is a good calculator we recommend - https://www.stoozing.com/calculator/soa.php
  Once you can see that you should then see how much of a shortfall you have each month and if you can post the statement of affairs on here people will be better placed to suggest what options you have and the best way to tackle things.
• Thank you for the warm welcome. I'm afraid I don't know how to use the emoticons.
  I'm extremely embarrassed to admit this but my debt is roughly Ј6,800 spread over various creditors.
  I shall complete the statement of affairs now.
• {\rtf1\ansi\ansicpg1252
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  \f0\fs22 \cf2 \cb3 \expnd0\expndtw0\kerning0
  \outl0\strokewidth0 \strokec2 [font=courier new]Statement of Affairs and Personal Balance Sheet\
  \
  Household Information\
  Number of adults in household........... 1\
  Number of children in household......... 3\
  Number of cars owned.................... 1\
  \
  Monthly Income Details\
  Monthly income after tax................ 747\
  Partners monthly income after tax....... 0\
  Benefits................................ 570\
  Other income............................ 0\
  Total monthly income.................... 1317\
  \
  Monthly Expense Details\
  Mortgage................................ 0\
  Secured/HP loan repayments.............. 0\
  Rent.................................... 500\
  Management charge (leasehold property).. 0\
  Council tax............................. 104\
  Electricity............................. 35\
  Gas..................................... 0\
  Oil..................................... 0\
  Water rates............................. 20\
  Telephone (land line)................... 35\
  Mobile phone............................ 0\
  TV Licence.............................. 12.12\
  Satellite/Cable TV...................... 0\
  Internet Services....................... 0\
  Groceries etc. ......................... 400\
  Clothing................................ 100\
  Petrol/diesel........................... 120\
  Road tax................................ 0\
  Car Insurance........................... 35\
  Car maintenance (including MOT)......... 8\
  Car parking............................. 0\
  Other travel............................ 0\
  Childcare/nursery....................... 10\
  Other child related expenses............ 0\
  Medical (prescriptions, dentist etc).... 0\
  Pet insurance/vet bills................. 0\
  Buildings insurance..................... 0\
  Contents insurance...................... 0\
  Life assurance ......................... 0\
  Other insurance......................... 0\
  Presents (birthday, christmas etc)...... 1000\
  Haircuts................................ 120\
  Entertainment........................... 50\
  Holiday................................. 0\
  Emergency fund.......................... 0\
  Total monthly expenses.................. 2549.12\
  \
  \
  Assets\
  Cash.................................... 0\
  House value (Gross)..................... 0\
  Shares and bonds........................ 0\
  Car(s).................................. 1500\
  Other assets............................ 0\
  Total Assets............................ 1500\
  \
  No Secured nor Hire Purchase Debts\
  \
  Unsecured Debts\
  Description....................Debt......Monthly.. .APR\
  Store account..................1500......130.......25\
  Credit card....................2000......100.......30\
  Credit card....................800.......17........30\
  Store cards....................700.......25........30\
  Catalogue .....................1100......110.......0\
  Store card.....................1800......35........30\
  Total unsecured debts..........7900......417.......- \
  \
  \
  Monthly Budget Summary\
  Total monthly income.................... 1,317\
  Expenses (including HP & secured debts). 2,549.12\
  Available for debt repayments........... -1,232.12\
  Monthly UNsecured debt repayments....... 417\
  Amount short for making debt repayments. -1,649.12\
  \
  Personal Balance Sheet Summary\
  Total assets (things you own)........... 1,500\
  Total HP & Secured debt................. -0\
  Total Unsecured debt.................... -7,900\
  Net Assets.............................. -6,400\
  \
• I hope that I have done it correctly. I have rounded some figures so I could be quick in completing the information.
• I have realised the figure for birthdays etc is incorrect. It is Ј1000 a year so about Ј80 a month.
• Just to add, as I missed the question above, I have never been late in repayments and have not defaulted up to this point.
• Hi.
  Your Ј1000 for presents is hopefully per year and not per month? And the same for haircuts?
  You'll need road tax, and is your electricity really only Ј35 per month when you don't have gas? We can't get gas where I live. Is this is correct, please tell me how so I can do it too.
  Sorry to be personal but do you not get any maintenance payments from your husband?
• Clothing and groceries are high!Is husband you left paying anything towards the kids?
• Thank you for the further replies. I can see I've made many errors.
  I have my hair cut twice a year and the children are the same except my son needs more regular haircuts.
  I found it difficult to estimate for clothing but I very rarely buy clothes for myself.
  My direct debit for gas and electricity is currently Ј35 a month but may change after the next meter reading.
  My husband has agreed to pay maintenance but has not done so as yet. He says he cannot afford to do this.
• Thanks for posting that up. Even with the presents mistake (and maybe haircuts?) it does look like you still have a significant shortfall each month.
  I think it probably will be a good idea to talk to one of the debt advice charities for them to help advise you. As it looks like you can afford your day to day costs and rents and have a small amount to put towards your debts.
  The debt charities should be able to advise you on what options might be best e.g. perhaps a DMP (debt management plan) or maybe a DRO.
  See here IMPORTANT - Where to seek professional impartial advice about your debts.
  Presumably you have checked that the new figures from housing benefit and tax credits are correct? Is there any chance of getting maintenance for the children from your ex (or their father)?
• I've tried again here
  \
  Household Information[/b]\
  Number of adults in household........... 1\
  Number of children in household......... 3\
  Number of cars owned.................... 1\
  \
  Monthly Income Details\
  Monthly income after tax................ 747.47\
  Partners monthly income after tax....... 0\
  Benefits................................ 570\
  Other income............................ 0\
  Total monthly income.................... 1317.47\
  \
  Monthly Expense Details\
  Mortgage................................ 0\
  Secured/HP loan repayments.............. 0\
  Rent.................................... 500\
  Management charge (leasehold property).. 0\
  Council tax............................. 104\
  Electricity............................. 35\
  Gas..................................... 0\
  Oil..................................... 0\
  Water rates............................. 20\
  Telephone (land line)................... 35\
  Mobile phone............................ 0\
  TV Licence.............................. 12.12\
  Satellite/Cable TV...................... 0\
  Internet Services....................... 0\
  Groceries etc. ......................... 400\
  Clothing................................ 100\
  Petrol/diesel........................... 120\
  Road tax................................ 0\
  Car Insurance........................... 35\
  Car maintenance (including MOT)......... 0\
  Car parking............................. 0\
  Other travel............................ 0\
  Childcare/nursery....................... 25\
  Other child related expenses............ 0\
  Medical (prescriptions, dentist etc).... 0\
  Pet insurance/vet bills................. 0\
  Buildings insurance..................... 0\
  Contents insurance...................... 0\
  Life assurance ......................... 0\
  Other insurance......................... 0\
  Presents (birthday, christmas etc)...... 83\
  Haircuts................................ 10\
  Entertainment........................... 0\
  Holiday................................. 0\
  Emergency fund.......................... 0\
  Total monthly expenses.................. 1479.12\
  \
  \
  Assets\
  Cash.................................... 0\
  House value (Gross)..................... 0\
  Shares and bonds........................ 0\
  Car(s).................................. 1500\
  Other assets............................ 0\
  Total Assets............................ 1500\
  \
  No Secured nor Hire Purchase Debts\
  \
  Unsecured Debts\
  Description....................Debt......Monthly.. .APR\
  Store card.....................1300......130.......25\
  Credit card....................2000......100.......30\
  Credit card....................800.......17........30\
  Store cards....................700.......25........30\
  Catalogue......................1100......110...... .0\
  Store card.....................1800......30........30\
  Total unsecured debts..........7700......412.......- \
  \
  \
  Monthly Budget Summary\
  Total monthly income.................... 1,317.47\
  Expenses (including HP & secured debts). 1,479.12\
  Available for debt repayments........... -161.65\
  Monthly UNsecured debt repayments....... 412\
  Amount short for making debt repayments. -573.65\
  \
  Personal Balance Sheet Summary\
  Total assets (things you own)........... 1,500\
  Total HP & Secured debt................. -0\
  Total Unsecured debt.................... -7,700\
  Net Assets.............................. -6,200\
  \
• Thank you for all the further replies.
  My parents pay my road tax for me as a birthday present. I am salaried so do not get paid for over time. I already cook most meals from scratch. The groceries figure includes pet food and cleaning products. I am on a water meter so will check with them what I need to be paying. And the same for gas and electricity. My mobile phone is paid for by work. My phone costs include broadband.
  I will go back over to see if I have missed anything.
  I've already contacted Step Change but the email with the budget for me to fill out did not arrive in my inbox. Will I be better off calling them? Will a debt arrangement plan affect my credit rating?
  My husband was financially abusive. Although he earned 3 times my salary, I was required to pay for everything for the children including all childcare costs despite the fact that we did not qualify for help with childcare due to his salary. I was forced to put everything we needed on credit. I don't know how I can make him pay child maintenance? The CSA have not been very good in my experience.
  I will certainly take on all advice given and do my best to reduce my monthly outgoings.
  I feel very low having to confront my financial problems.
• Your telephone is high. Do the kids make calls? If you are on certain benefits you could qualify for a BT Basic account. This will cut your line rental down to around Ј5 a month. You will also get around Ј1.50 of calls a month inclusive. You are still free to add an internet package from anyone and use that for communicating via email.
  If you do not qualify then look for a call package with line rental and work out the sorts of calls you make. If all mobile to one network because friends and family are on it then consider dumping the landline for a mobile contract. You could drop to a PAYG mobile which will keep you connected but be much less especially if you can make calls from work.
  You could make some savings on the groceries by making yourself. It can be hard at first, especially with kids. The MSE would suggest double or even triple dipping when it comes to groceries. You will save around 30% from each drop so could make big savings. So switch the expensive branded cereals for own brand. I found that even the value brand cereals are perfectly acceptable.
  Though you may not be that extravagant to start with. What I did was look at the things that I bought and then looked at could I make it cheaper myself. For example a trifle will be a couple of pounds but you can make it quite easily with trifle sponges, jelly and tinned fruit or discount fruit and custard for a lot less and you usually get a lot more. That worked for me for a long time. Now I am going even further and making my own trifle bases from a 22p sponge mix from Tesco. I only need to add an egg and water. So I can make it for much less than the stores sell it for. In fact look at any ready meal in this way and you could find that you will make some big savings. I might suggest ploughing some of your savings into getting a food mixer so that you can do even more yourself. It will pay for itself even quicker. The frugal living threads have ideas for eliminating waste by using old veg in soups etc, and all you need for that is a Ј6 hand blender. I even make my own bread every couple of days and that saves me a packet at only 47p a loaf.