Big debt, don’t know where to start!

Sea_Shell

TBH, I think you need to go back to your SoA and really go through it in more detail, and make sure that everything is nailed down to (or as near to) exactly what the position is.    That way people will be able to advise you better.

warby68

HMRC can be the least tolerant creditor - I would prioritise coming to agreement with them first.  Presumably you have had accountant advice that the amount is correct and due and also that there are no more arrears to come out of the woodwork.

With your stated surplus being easily able to deal with your current payments, that is probably why your first approach to the debt charities did not offer much.

Your SoA adds up to something well within half your income even including debt repayments so I know you say the 2nd job is new but understanding where your money is/was going is also key. Have you been trying to pay off HMRC or is there a lot more personal spending not yet accounted for? A lot of the spending categories are at Nil. 

2 full time contracts sounds a lot. Is this a short term measure to tackle the debt? Be careful with your health and well being. It may be worth considering payment proposals that do not assume that amount of money will continue long term.

At first glance your surplus can deal with all your debt in less than 2 years so clearly there is plenty to work with once you know what HMRC will accept and possibly a more thorough assessment of what you can throw at debts, bearing in mind the payments on the withdrawn cards will probably need to go up.

squirrelchops2

You have some outgoings that seem quite high to me.
The car tax and insurance : £50 per month tax - what on earth are you driving that costs £600 a year to tax - is this figure right. Similarly £120 per month for x 2 insurance - that is £1440 - is one of you a new driver or had an accident? That seems a huge amount.
Mobile phone £160 a month? I pay £8 sim only. Even contracted deals including a handset are not that much.
Even gas and electric for 2 adults and a child seems very high at £150 month, we are 2 adults only and bill is £46 a month for both. Perhaps you need to get this switched.

herebeme

The corporation tax interest rate is 2.6%. But there’s no interest on the interest. Call them ASAP and see what what minimum payment per month they’d take - it’s called a time to pay arrangement. You’ll only be given 12 months max to repay in, and it might be less. The longer you leave it the less likely they are to go for an informal arrangement like this.  They’ll probably ask to see your accounts and cash flow, so make sure everything is in perfect order. And if you’ve given yourself a directors loan that’ll probably be recalled / dividends those will have to stop. If you have an accountant, give them a heads up too. If you have trading losses in the current period you may be able to off-set some of your tax liability from past period; speak to an expert. 

Jami74

£10,000 a month income and your mortgage is the same as my rent. I'm on £2,200 a month
I don't know anything about HMRC debt but if it was me and there was really £5000 spare a month I'd probably try and pay them £4000 a month and then put £1000 a month towards credit cards.

JCS1

Do you have an accountant?  And on your income, is that before or after tax?

[Deleted User]

Jclayton28 said:

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

Are you a salaried employee paying tax through PAYE for both of those jobs or are you a self employed contractor paying yourself through a limited company? If it’s the latter is the £10,000 income net of any tax you you will have to pay HMRC or is the tax being set aside in a business account to pay HMRC? 

[Deleted User]

Jclayton28 said:

[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]

There’s a lot missing from this SOA and I doubt you really have £5959 left each month. You need to pull together a realistic SOA rather to understand where you are financially. That means going through all your bank statements to see what you are really spending. 

You might not buy clothes, haircuts, birthday presents or Christmas presents every month but over the past 12 months you will have spent some money on those items so find out how much that is and divide by 12 for each category.