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Big debt, don’t know where to start!

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Jclayton28
Jclayton28 Posts: 5 Forumite
Fifth Anniversary First Post Combo Breaker
in Debt-free wannabe
Hi everyone, hoping you can help, I’ve spoken with money advise service but they didn’t really help me.

I have 3 types of debt, credit cards, personal loan and HMRC corporation tax debt. I’ve been putting my head in the sand for a few years now, several things have happened, bought a house which needed basically everything doing (hence the loan) and this maxed all the cards too. We then had a baby which again put a strain on the finances. My wife is now a stay at home mum so no income from her side. 

Where I’ve been embarrassed to reach out for help is that my income is actually quite high, but with it I’ve now got proportionally high outgoings too! 

It’s got to the point now where two of my 4 credit cards have contacted me to say that because I’ve been in persistent debt for so long they’re going to stop the cards. HMRC are also contacting my by mail regularly.

My question is where do I start?! Do I prioritise HMRC and keep paying minimum on the cards? Do I blitz trying to clear the cards so that 6 months down the line I’ll feel the benefit of that and have extra cash each month to put towards HMRC? Do I take out a secured loan to consolidate everything or pay off HMRC? I just don’t know where to turn or what to do.

thank you in advance

james
«1

Comments

  • fatbelly
    fatbelly Posts: 22,860 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Please don't consolidate with a secured loan.

    Can you post a statement of affairs for us?

    https://www.lemonfool.co.uk/financecalculators/soa.php
  • Jclayton28
    Jclayton28 Posts: 5 Forumite
    Fifth Anniversary First Post Combo Breaker
    [font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

    Household Information[/b]
    Number of adults in household........... 2
    Number of children in household......... 1
    Number of cars owned.................... 1[b]

    Monthly Income Details[/b]
    Monthly income after tax................ 10000
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 0[b]
    Total monthly income.................... 10000[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 980
    Secured/HP loan repayments.............. 211
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 158
    Electricity............................. 75
    Gas..................................... 75
    Oil..................................... 0
    Water rates............................. 50
    Telephone (land line)................... 0
    Mobile phone............................ 160
    TV Licence.............................. 12
    Satellite/Cable TV...................... 150
    Internet Services....................... 0
    Groceries etc. ......................... 500
    Clothing................................ 0
    Petrol/diesel........................... 0
    Road tax................................ 60
    Car Insurance........................... 120
    Car maintenance (including MOT)......... 0
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 40
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 150
    Buildings insurance..................... 35
    Contents insurance...................... 0
    Life assurance ......................... 44
    Other insurance......................... 30
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 2850[/b]
    [b]

    Assets[/b]
    Cash.................................... 0
    House value (Gross)..................... 360000
    Shares and bonds........................ 0
    Car(s).................................. 1
    Other assets............................ 0[b]
    Total Assets............................ 360001[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 240000...(980)......1.8
    Hire Purchase (HP) debt ...... 12000....(211)......4[b]
    Total secured & HP debts...... 252000....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Credit card....................14000.....300.......12.9
    Credit card ...................8000......200.......16.9
    Credit card ...................2500......75........16.9
    HMRC debt......................50000.....0.........0
    Loan...........................29000.....541.......14.9
    Credit card....................2500......75........16.9[b]
    Total unsecured debts..........106000....1191......-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 10,000
    Expenses (including HP & secured debts). 2,850
    Available for debt repayments........... 7,150
    Monthly UNsecured debt repayments....... 1,191[b]
    Amount left after debt repayments....... 5,959[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 360,001
    Total HP & Secured debt................. -252,000
    Total Unsecured debt.................... -106,000[b]
    Net Assets.............................. 2,001[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    Hi, you say "Hi everyone, hoping you can help, I’ve spoken with money advise service but they didn’t really help me."

    That is very unusual indeed. Have you spoken to anyone at StepChange? Link here :     https://www.stepchange.org/

    StepChange CAN and WILL help you with any financial problem or worry. You are asking questions on this site that the advisors at StepChange are asked every single day. You have already prepared a comprehensive statement of account so you have that ready to discuss with an advisor. 

    You ask where to start and I would say please start by contacting StepChange. And go through all your problems with a named advisor who will be allocated to you. I have been in terrible financial trouble myself in the past and I know how it can make you feel. Sometimes it's difficult to talk to people on the phone about all the things that are worrying you and getting you down. But they REALLY can help! They do not judge you and there is no need to be embarrassed. 

    Do give them another chance because they helped me so much. Of course it is not an instant solution, nobody can offer that but I am now debt free, having come out of the other end of a Debt Relief Order. It stayed on my credit report for six years, as does bankruptcy but it was worth it. 

    StepChange - in common with the other debt help agencies - are authorised to help with arranging solutions and that is also really beneficial. You've taken the first step and you've put a lot of personal information on here (and had 95 views so far) so why not try talking to someone in a confidential manner about your problems? Also, have you shared everything with your wife? You are in a partnership and she deserves to know and share your worries. It isn't fair to keep her in the dark. You just keep saying 'I' but there are two adults here.
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • Sea_Shell
    Sea_Shell Posts: 10,000 Forumite
    Tenth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 11 June 2021 at 7:33AM
    Do you really have almost £6000 a month left over?

    There seems to be a few categories left at £0.   

    Clothing................................ 0
    Petrol/diesel........................... 0
    Contents insurance...................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    How's it going, AKA, Nutwatch? - 12 month spends to date = 2.60% of current retirement "pot" (as at end May 2025)
  • Jclayton28
    Jclayton28 Posts: 5 Forumite
    Fifth Anniversary First Post Combo Breaker
    Sea_Shell said:
    Do you really have almost £6000 a month left over?

    There seems to be a few categories left at £0.   

    Clothing................................ 0
    Petrol/diesel........................... 0
    Contents insurance...................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 0
    Holiday................................. 0
    I’ve just started a second job, so I’m working 2 full time contracts, hence the extra money. I just don’t know where to spend that extra money, HMRC or credit card debt - or an equal split between the two
  • TheAble
    TheAble Posts: 1,676 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    That's quite a decent surplus you have. HMRC is surely the priority debt I would have thought.
  • Sea_Shell
    Sea_Shell Posts: 10,000 Forumite
    Tenth Anniversary 1,000 Posts Photogenic Name Dropper
    TheAble said:
    That's quite a decent surplus you have. HMRC is surely the priority debt I would have thought.

    I'd agree.

    Is the HMRC debt actually at 0% interest?     Is that usual?
    How's it going, AKA, Nutwatch? - 12 month spends to date = 2.60% of current retirement "pot" (as at end May 2025)
  • Jclayton28
    Jclayton28 Posts: 5 Forumite
    Fifth Anniversary First Post Combo Breaker
    Sea_Shell said:
    TheAble said:
    That's quite a decent surplus you have. HMRC is surely the priority debt I would have thought.

    I'd agree.

    Is the HMRC debt actually at 0% interest?     Is that usual?
    I don’t think it’s 0% but it’s around £1.50 a day or something - off £50k I’m not sure what that equates to!
  • comeandgo
    comeandgo Posts: 5,930 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Are you really paying £180 a month on car licence and insurance on a car worth £1?  Have you made a mistake on car value?
  • Jclayton28
    Jclayton28 Posts: 5 Forumite
    Fifth Anniversary First Post Combo Breaker
    comeandgo said:
    Are you really paying £180 a month on car licence and insurance on a car worth £1?  Have you made a mistake on car value?
    Possibly! I’m paying both my wife’s car and mine, as she’s on long term maternity now. My car is £50 a month tax and hers is £10 and the joint insurance is £120. Her car is on PCP at £211 a month, I own my car outright - worth maybe £4500
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