Stuck in debt

matthewharmon102

I'll try to keep this short, my story isn't particularly unique, but I'm rapidly running out of options.

I built up some debt iny early 20's but I was ae to pay most of this off. I started my own company and did pretty well, I was clearing debt and was almost debt free. I would dip intoy credit cards for things like holidays or large purchases, but within a few months these were cleared. I did some balance transfers to try and reduce costs and things were manageable.
Things started to go wrong towards the start of 2020. I had some huge bills come in from my company, which resulted in me paying around £12,000 in matter of weeks. By the end of January, my debt had gone up from around £6,000 to £18,000. Over the course of the year, things have got worse, to a point where I now owe around £33,000 on credit cards and overdrafts. I have done my best to reduce bills and cut things, I had had a rent reduction from my landlord and taken advantage of some of the coronavirus support, but I seem to be stuck making minimum payments on everything and by the end of the month, there is nothing left. Any unexpected expense, even a small one, just pushes me further into debt. My credit rating has been destroid through a combination of missed payments and maxing out cards.

I have 1 card with around £3,800 on it, which will come to the end of its interest free period next month. I don't have the credit score to apply for a balance transfer, and debt consolidation loans are out of the question.

I have no savings and no assets and the stress of it all keeps me up at night. I feel sick at the thought of this mountain of debt that just seems unmanageable.

To add insult to injury, every few months I receive letters tellinge my credit is being reduced, or my interest rate is going up. I don't have the flexibility to change cards, so I feel like I am stuck and I genuinely don't see a way out.

My partner and I would love to get married and start a family soon, but the thought of having to pay for a ring, let alone a wedding just terrifies me.

Any help/advice will be greatly received

datlex

What do you do for a living normally?  I am sure your partner is not with you for the money!  You don't have to spend a fortune on a ring and given you can only have 15 people to a wedding might make it the cheapest time you can find to get married.(not that I am suggesting you do). Do you live together? Could you share with anyone else? Could save you money and get you out of debt.
In the meantime post your income and expenses and folk may be able to suggest cut backs.

tacpot12

It looks like you need professional debt advice. I would contact your local Citizens Advice and see if they get you appointment with a debt worker. 

I would also get someone to look at your business to see if it is viable. If it is only going to produce further debts for you, you need to close it down asap. 

Retireby40

How much is your business turning over a year? It's all fair and well owning your own business but if it isnt profitable its not worth anything.

Best thing you could do is do a SOA. Put down all incomings and outgoings. From the outside looking it basically your spending more than your earning. Holidays should never be put on credit cards. If you havent got the cash in the bank then your living beyond your means.

DCFC79

Remember your credit score is only seen by you, your history is what's important here.

CreditCardJunkie

Have you spoken to stepchange? They can provide advice on what your options are...please remember that things will get better. Take a look at some of the diaries on here, people have had debts larger than yours and come through the other side.

enthusiasticsaver

Is your business still viable?  Otherwise you may be throwing good money after bad if you are paying out but not making anything now and you may have to look at bankruptcy.  Is it a limited company or are you self employed? As your credit record is  already shot I would speak to your creditors and ask for some breathing space to look into your next steps.  An soa is a good start or contacting stepchange but if the main issue is your business they may not be able to help.  

matthewharmon102

Thank you all for the comments. The business is not viable, the reality is it stopped being viable a while ago, but I am now closing it down. I have a full time job outside of it, so it's just a burden at this stage.

Me and my partner do live together, she is suffering with a long term injury but is starting her own business in diet and nutrition. It's early days but this could give some relief in the future.

I have been in touch with a few of the companies directly, but it's proving a challenge. I waited over an hour to speak to NatWest (after they emailed me offering debt help) to basically be told there isn't anything they can do for me as I've already had the £500 interest free overdraft offered!

I am in the process of making a budget. It sounds silly but I can only do a couple of bits at a time, otherwise I end up spiralling and it all gets a bit much. Things like Seeing such a large negative number as my account balance gives me anxiety to the point where I don't want to look at my balance. I've been looking to set up a new bank account, almost like a fresh start in terms of incoming and outgoing money, plus I'm tired of being told "we want to help" in letters and emails only to find it's nothing more than a marketing ploy.

I did have some success talking direct to companies. My landlord agreed to a small rent reduction of about £25 a month for the next 12 months, and we have had a brand new boiler fitted(the old one was about 10 years old) as part of the deal, so this should help reduce energy bills. I also used the "Look after my bills" service and found a better energy deal, (about £140 a year cheaper). After getting nowhere with EE over my mobile phone bill, I switched to Vodafone and saved £15 a month for the same service, and did the same with Virgin Media and saved £10 a month. I've adjusted my hours at work slightly, so I can travel off peak and save a little bit on the tube fares too.

These small changes I hope will add up to something.

enthusiasticsaver

If you have a full time job then you can deal with this.  Presumably the debts are in your personal name rather than the company?  If they are then you may need to look at some sort of debt solution like a DMP or even bankruptcy if you have no assets but it depends on your soa (statement of account) and what shortfall there is on outgoings.  If you can make your budget work but getting balance transfers and interest payments are the problem then stepchange can help you with a DMP.  

If you opt for a DMP there is a support thread on here.  The sooner you default the better but the defaults will be on your record for 6 years.  If you already have missed payments though you already will struggle with further credit so no difference. You need to save up for emergencies as you will have no access to credit but some people say that it is a relief to get away from the merry go round of balance transfers etc and you can sustainably start  living within your income. 

fatbelly

I notice you're putting a budget together. Do you want to share it with us?

You can use this calculator

https://www.lemonfool.co.uk/financecalculators/soa.php

Please format for mse

NeverendingDMP

A fresh  bank account might help everything look clearer. You could use it's as your going forward budget to live within my means account. Everything else you can look at over time. With regards to the debts you need to perhaps list them, figure out interest rates, whose name they are in- ie you or the business and whether you have defaulted or not yet. The link fatbelly posted is useful if that if you feel up to sharing we will help with areas of the budget that may have too much or too little money allocated to them. People may also ask about your job. Not to be nosy about you but to figure out whether your credit  needs to be considered in what options you have. 
It's a lot to take it and will feel a lot to do but the first thing is noticing you are in a pickle and you have done that.
Also you have lots of positives in that you have full time work a landlord who must value you as a good tenant and a decent boiler as winter is here!