Can't pay back bank loan

Cjts

Hello i'm looking for any advice please..
I'm self-employed and recently lost my main contract.
I've secured a PAYE job but the salary is too low to continue paying my £15k bank loan and 4k of self assessment arrears.
I've been onto StepChange to complete a budget and was hoping to set up a DMP but don't have enough left after my priority debts to pay the loan.
I need help to see what i can do without affecting my partner or my mortgage..
Thank you in advance

fatbelly

Firstly make sure you are doing all your banking with a bank that isn't even in the same group as the one who gave you the loan.

The HMRC debt is a higher priority than the bank so your order of priority is:

1. Your essential household expenses (eating, keeping warm, keeping any cars legal)
2. Your mortgage and any other priority debt
3. HMRC - get a payment plan based on any available income
4. everyone else - I'd let the bank default you then set up a token £1 offer for the short term.

Your house will only be affected if you cannot pay mortgage or secured loan.

If the bank loan is solely in your name but the mortgage is joint, then your partner's credit history will be affected as a connected person - but that is unavoidable if you can't meet the contractual payment

RAS

And do make sure neither of you is paying into any joint accounts that belong to the banking group where the debt is held and avoid sole accounts in the same group.

If necessary, set up a new bank account now with a safe provider.

Cjts

Thank you for both replies. I've opened a new account. 
Wouldn't it be better for me to go to StepChange as they use the same order of priority as @fatbelly suggests..? 
Thanks again

Cjts

Cjts said:

Thank you for both replies. I've opened a new account. 
Wouldn't it be better for me to go to StepChange as they use the same order of priority as @fatbelly suggests..? 
Thanks again

🙄 So sorry, forgot to update before i posted the above!
I have now been offered another job with better pay, but still not much left over to pay the loan.
I went on StepChange and completed a budget which suggested a DMP which does cover the HMRC as a priority debt.
Would you suggest using this route ?

Thanks again

RAS

You really need to sort out the HMRC debt. But let the loan provider know the situation.

I'd consider not paying any more on the loan until it defaults. When you are reasonably confident you can pay off the HMRC debt, once the loan defaults, make a token payment (£5 per month) until you've sorted out the HMRC debt.

But please start an emergency fund and pay as much as possible into it before it before you start a DMP. You won't be able to access credit, so need a safety net. And remember that if the boiler blows, you can let your DMP provider know and they can suspend payments. But it's easier if you have a fund to cover the boiler costs, rather than scrating  around to cover the cost.

Cjts

Thanks Ras 👍