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Debt hole. Falling further.

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Hiya, 27 year old from South West.

In debt situation and really struggling. I've always put my head into the sand but realising my mistakes early 20s have caught up.

Full time employment 2012-2018 (£12,000-£30,000).
Opened £1500 credit card account in 2015 and used until 2018. Was using for petrol, food shops, paying back the monthly payments + to increase credit score. I had over spill money each month so opened up the standard Stocks and Shares ISA and Lifetime ISA and was maxing them out.
Gradually credit account was increased to 3500 I phoned to stop at the 1500 but it was a standard progression. My spending also slowly increased. Summer 2018 I stopped using the card but was able to pay back the monthlies bringing it down to £3250 owed.

In Autumn 2018 after years of thought I started my own business, applied to UC and started getting orders in. Payment for the credit card stopped as income was highly reduced. I still had high out goings but weened off; £600 rent £105 insurance, 200 phone internet and other costs such as food. £400 for other business costs.

2019 Salary: £9000
2020 Salary: £3000
This is much lower than what it could be but I go nocturnal due to money anxiety. Second year was expected to double first.

Moved back to parents May 2019. Head down tried to make money. I have over 500 letters unopened.
Everything is now snowballing, bank has passed the debt on to Moorcroft. They also have my personal phone contract.
I do not qualify for UC.
My business is supplying and designing bathrooms. Increasing profit loses customers.

Sometimes I charge a design fee but;
Minimum a bathroom product order is £5000. 
I then pay £4950 for product from a business (even 5050 sometimes and lose partial design fee) 
Because 5000 comes in, I don't get universal credit support. If I want UC money, I have to lie or cheat their system with milage.

Current situation personal (business)
Income - 150 (700) avg
Outcome - 100 (555) avg

Debit account: -£500 (has been for over 2 years) £0 available.
Credit card debt: 3500 with Moorcroft
Phone bill debt: 88 with Moorcroft
LISA: £3400 which I cannot touch unless paying 25%
Family and friend loans: £250

I live rent + food free. I have to pay for petrol, car insurance, tax. I can't afford to have personal phone. I don't drink I don't smoke, haven't been to see friends since starting the business (COVIf didn't help)

In my head, as clients vary from Carol Vordeman to bankers and my own family, it seems ridiculous to go get another job but at the same time I don't know how to stop these anxiety attacks. If I told a few installers/showrooms I was in debt, they would offer me a job. They already do which makes me feel worse as I'm not succeeding.
For the last 3 years, Every day, every few minutes I think, how do I change it, whirlwinding into a panic mindset. I work 30-50 hours in a row depending on the job.

Last 6 months it's been getting really bad. Shout at friends and family, I don't want to talk to them or go out for meals. I have to ask for someone to pay everytime. Dad was diagnosed with cancer in Feb then second bout now. He lies in bed and just struggling watching my personal and businesses life failing and struggling.  
I've called debt support and been through different channels but just get told to ring different numbers.
I've explained to UC about suicide help lines but they just hang up on the mention.

Suppose the questions are;
Do I get a job on top of 120 hours a week?
Do I sell my LISA losing £1000 and still not cover debt? (But credit score will be so bad from this I assume, having a LISA would be pointless?)
Parents have retirement money that I've heard them say, they'll have to use for me. 

Do I focus on keeping bank account out of overdraft or pay back Moorcroft?

I called Moorcroft and they said pay... I couldn't afford banks monthlies.

I would struggle to pay these companies a few £ per month.

Apologies if this isn't clear 
Thank you for anything, any opinion, I haven't been able to talk fully to anyone about my issues before.

Comments

  • ImJonnyD
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    Apologies if not clear;

    LISA +£3500
    S+S ISA +£200 (currently liquidising)

    Current account -£500
    Moorcroft debt -£3600
    Friends and family -£250

    Also 4 stag does coming up. I've said no to all. I can't do it but would love to. Can't prioritise 1/4.

    Thanks again
  • fatbelly
    fatbelly Posts: 20,814 Forumite
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    Anxiety attacks are a medical condition and there are effective treatments. If you haven't explored them you will be surprised at how helpful they can be. They divide into talking therapies and medication. You may benefit from one or other or both. Your GP is a good place to start.

    It will be easier to plan your business once those are dealt with. It sounds like potentially there is a surplus to be had there

    The debts are what we call non-priority - at least the Moorcroft ones are. Nothing's going to happen with them in the short term except at some point Moorcroft will run out of standard letters to send you, and return the debt. They are debt collectors, not debt buyers. They do not charge interest.

    I would leave the LISA for now. If you do have some monthly surplus (and your figures showed around £200 per month) then get the bank account back in credit (as that will be high interest) and then your friends and family are next.

    It may be most cost effective to wait until another company (Lowell are the main ones) buys those Moorcroft debts and then try for full & final settlement deals on them.

    But your health is the most important thing here.
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
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    Hello, I'm so sorry that you are in this situation. Just reading your post I can feel your angst. Without trying to be patronising at all I just think you are so young, you have time to sort things out, please try not to worry or feel so bad. Many of us on this forum have been in similar situations and we have survived. You can too. Sometimes it seems as if you just can't think straight but asking for some help - and just writing everything down - is a really good first step. 

    You say that you have "called debt support and been through different channels but just get told to ring different numbers".

    I do not know what kind of 'support' that was supposed to be but have you tried StepChange? Their link -

    https://www.stepchange.org/

    I turned to them a few years ago when I was at rock bottom and feeling totally suicidal about my financial position and they were able to help me. They do not tell you to 'ring different numbers'. They speak to you and they help. All you need when you phone is a list of your incomings and outgoings. A Statement of Account or SOA for short.

    You will be allocated a personal advisor who will listen to you and then discuss some options with you in a very calm and organised way. They are kind and compassionate and not at all judgemental. 

    I can recommend them and I'm sure you won't regret it if you do contact them.

    As fatbelly has said your health is the most important thing and I agree that your GP would not be a bad place to start. Do look after yourself. 
    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.
  • Borders2017
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    You need to accept that you are just not cut out to run your own business. You are not mentally strong. That's fine. Not all of use can be doctors or lawyers.
    Go and get a normal job from one of the installers/showrooms. Get yourself back on track. Dont burden your family.
    If things go well and you can save some wages (you should easily do this if you dont pay rent) pay off debts within a year or so then you can start up the business again if you feel better.

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