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WHEN Phil Regan’s son died at the age of 19, the dad started to lose a grip on his finances.
The 60-year-old from Manchester turned to drink and wasn’t repaying debts.
By 2020, along with wife Fiona Regan, 36, the money owed had ballooned to £14,000.
The couple was living in a state of constant worry and anxiety as they were hounded over the debts.
“We couldn’t see a way out,” Phil told The Sun.
But five years later the couple are debt free and able to enjoy holidays as a family with their daughter, nine, and son, six, and buy them treats without worrying.
It’s a far cry from life just a few years ago at the height of their money issues.
Life had taken a turn for Phil when his son died in 2006 from a rare genetic condition. He turned to alcohol and wasn’t paying bills.
When he met Fiona, she was going through a divorce and also battling money problems.
Due to poor health, Phil can’t work and Fiona acts as his carer.
The family were reliant on food banks to get by.
They were in a vicious cycle with payday loans.
Phil says: “As long as you had £2 in your bank account – they gave us money.
“It’s so easy to get yourself into debt.
“You don’t realise how much interest is going on.”
But the money owed had become a huge stress for the couple.
Phil says: “If someone came to the door, we never opened the door.
“Some days we didn’t eat – as long as the children could eat that’s all that matters.”
It all changed in 2020 when they were referred to charity Christians Against Poverty (CAP).
They had a face to face meeting with an adviser from the charity who went through the options with the couple.
Phil and Fiona decided to apply for a Debt Relief Order (DRO) which freezes debt for a year and then wipes it off completely.
The couple went through every aspect of their finances with their adviser.
The agent gave them a reference number that they could give to debt collectors.
“It felt like a weight had been lifted,” Phil said.
CAP also encouraged Phil to apply for Personal Independence Payments (PIP), as he can’t walk very far.
Around three years ago, Phil had been in hospital with ketoacidosis – a serious complication arising from type 1 diabetes.
He qualified for PIP giving the family an extra £500 a month, which was a financial lifeline.
Then in 2021 they became debt-free.
Phil says: “It was a fresh start.
“The burden of debt, the not opening the door. That was all gone.”
After they became debt free the family finally went on their first holiday to Morecambe.
Phil says: “Normally, we had not been able to go on fair rides.
“When you’re in debt, you can’t afford to do these things and the kids feel like they’re missing out.
“But this time, we could treat them to ice creams and to go on rides.
“We’ve been able to make memories with them, which is what it’s all about.
“It feels really good, to be able to do that.”
But he added: “We don’t spend what we can’t afford.”
Phil says they are now in a position to give something back to the food banks.
He adds: “We show our children this is the right thing to do.
“We all have to help each other.”
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us’ benefits calculator works out what you could get.
Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
How a debt relief order (DRO) works
A debt relief order is a form of insolvency, alongside bankruptcy or an Individual Voluntary Agreement.
You could qualify for a DRO if you owe less than £50,000 and don’t own your home or another property .
As part of the arrangement, you will need to show that you have £75 or less left over each month after paying for bills and other essentials.
You can’t have savings or a possession worth more than £2,000 – though you can own a vehicle up to the value of £4,000.
You can’t take out a DRO if you have an IVA in place or if you’re going through bankruptcy.
The order will then freeze your debt for 12 months and creditors will not be able to contact you about money owed during this time.
However, you will need to follow certain restrictions.
For example, you are not allowed to get credit for more than £500 without telling the lender you have a DRO.
After this time period, the debt is wiped off and some of the restrictions are lifted.
When you take out a DRO your credit rating is damaged, which means that it will become more difficult to get credit in the future.
And the DRO stays on your credit file for up to six years.
Previously, you had to pay a £90 administration fee to enter a DRO – but this has now been scrapped to make the solution more accessible to those who need it.
You can only go through one DRO in six years.
Apply for a DRO through a specialist DRO adviser.
This professional person will have the skills and permission to complete forms, as well as give advice on DROs.
They can then check you qualify and confirm if a DRO is the right course of action for you.
The free debt charities, including Christians Against Poverty can signpost you.
Check if you are in an eligible area through the website capuk.org.
Other free debt charities include:
- Citizens Advice – 0800 144 8848 (England) / 0800 702 2020 (Wales)
- StepChange – 0800138 1111.
- National Debtline – 0808 808 4000.
- Debt Advice Foundation – 0800 043 405
How to cut the cost of your debt
IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money
Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don’t pay
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.
