Tipping over the edge

Skint15

Today for the first time in my life my bank card was declined due to lack of funds and I had no alternative method of payment, I’m skint and had to leave the shop empty handed. 

I’m fortunate to earn a fairly decent salary and money has never really been a problem. That changed 18 months ago when I bought a house right on the limit of my affordability and I took out loans and credit cards to get the house into a liveable condition. 

I thought I was handling the debt ok until the last few weeks where everything seems to have hit me at once:

- the monthly payments on my debts are almost at an unmanageable level
- my credit score has plummeted and for the first time I can’t access credit with reasonable interest rates
- my mortgage is up for renewal early next year and the extra interest I’ll have to pay is worrying

I’ve only just come across these forums in the last few days in an attempt to find some help so please forgive me if I’m not providing the right context or information but my situation is:

Debt
Loan 1 - £28,009 @ 7.9%, settlement amount £24,529 
Loan 2 - £39,278 @ 15.9%, settlement amount £24,635
American Express - £5078 
Parents - £10,000
Tax Bill - £5,200

My plan is pay down the American Express first as it has the highest rate and then target loan 2, but I also need to worry about the tax bill that is due by Jan 24 or I end up paying interest on that too. My main concern is the lack of available funds to pay down these debts each month, which will only get harder once my mortgage payments increase at renewal. I know I’m in a difficult situation, entirely of my own making, but I’m determined to fix it and become debt free.

Cloth_of_Gold

If you were willing to post a Statement of Affairs, which gives your income and outgoings in more detail, it would help people to give advice.

Longwalker

Sorry that things are tough for you, been there, got the tee shirt, wore it a while, survived

You will as well

I would always advise tax bill before any bill. I lost the security of a family home as a teen when dad got made bankrupt by HMRC. Gave me a hard start in life but I always pay HNRC before anyone 

Taxes and roof 

Every other bill can wait - as long as you keep speaking with them. Gas/electric companies will work with you as long as you keep them updated on whats happening - how much you can afford

A  SOA will help us ( users of the forums ) give you advice on where you can cut back 

Flugelhorn

definitely taxes and roof - take a deep breath, write  all expenditure down and take it from there 

joedenise

As others have said HMRC first.  Contact them and arrange to pay the owed tax through your salary.  You should be able to have your Tax Code changed to repay it over the next year.  Means your take home pay will be lower but it will be a debt being paid off.

Then get rid of the CCs and loans.

As others have said posting a SOA will give users an idea of where you can cut back.

gwynlas

A lot of people on here have been in the same position including myself. Try and be creative about increasing your income would it be possible for you to rent out a room in your house? There are a number of ways you could do this without it intruding too much such as creating bed sitting room with use of kitchen and bathroom, Sell anything that you do not need. Take on a part time job bar work or retail have to py a least minimum wage,

Green_hopeful

I was going to suggest getting a lodger or two. It’s a really good way of making extra money if you can cope with sharing your home. I had three lodgers at one point when I got divorced and needed to pay off my mortgage quickly. There are tax implications both income and capital gains taxes if you go over the limits and or have lots of lodgers but I didn’t end up paying much. You can earn £7500 per year under rent a room and pay no taxes on it at all. That could be £625 per month tax free. 

CMD79

Hi Skint15,

Two really important things I have learned here on the forum:

1) You are not alone
2) You will be okay

In terms of what you need to provide, that's entirely up to you how much you want to say, and what you want to keep privately, and that will depend on what you think the forum can help you with and what advice you'd like from us.

If you'd like us to check-in and make sure you're doing okay, then I'd just treat it a bit like a diary entry - tell us how you're feeling and the responses you'll get will likely be us empathising and hoping to offer encouragement to keep going. My tuppence on this point is to tell you that many of us have been exactly where you are, and many have cleared their debts well ahead of their expected debt free date, and others like me, have relapsed and going around again. We're all here with no judgement and as someone said to me the other day on my own diary, we're (mostly) all here because we're not very good with money. (Though many others are here with savings goals, and many who were not good with money and are now VERY good with money!)

If you'd like advice on taking the debt, then as others said, if you are happy to share an SOA people will respond with advice on where you can reduce you general outgoings and tackle the debt etc. For context, it would be good to know how much the income is versus the outgoings and who is at home etc. 

Having been at the point where I'd ran out of money to get to pay day myself, I can tell you about a few ideas to make extra money to see you through.  I actually ran out of money and whilst trying to make extra money I saw someone offering a days cleaning work 20 miles away and because I didn't get paid straight away as I had expected, I didn't have enough fuel in the car to get home. That was probably my all time low point in my journey actually, thinking back now. I'm not a cleaner, so after a long day of cleaning, I was exhausted, physically and mentally and was waiting indefinitely in a car park for money to arrive in my bank account. Anyway, if you're interested in making extra money, or if this is helpful to anyone else reading; You mentioned you had a good income, so this might not be what you need, but just in case:

Mystery shopping - Recommend Tern as if you do a shop one week, you'll get paid on the Monday, even if it's a weekend shop. They are typically very easy visits between £10 and £20. If you live in a rural location, probably won't help much!

Surveys - Prolific is great if you can get in! they often have a waitlist, but join the waitlist because you may get accepted quite quickly. They can have some quite lengthily surveys, but they are often really interesting, and typically pay quite well. They tell you the equiv hourly pay rate even if a survey only take one minute. The minimum cash out is £5.00 and you can sometimes get good days where you'll make £10 or £20, but others, you won't see anything. The other is Qmee. There is no minimum cash out and there are dozens of surveys available throughout the day, usually between 20p and £2.00 (I've not used it for months, so I presume still the same!) The big issue with Qmee is, you can get into a survey and it'll tell you you're not eligible. This can be really frustrating, which is why I don't use it anymore, but if I was in the situation I was when I started my diary, some days it gave me just enough to make one payment to the next when I'd run out of money.

Good luck with everything, try to get a plan together and stay positive....


C x 

[Deleted User]

How are you feeling? I'll be following your journey. I felt ever so sad when your card declined. That was me a couple of years ago. Sending a hug x