Self Managed DMP and HMRC debt

thelibrarian11

Hi, my finances will change this September and I'm trying to wrap my head around how I will handle debt then so I can stop worrying.

I have 17 unsecured creditors about 9.5k over them all, and owe about 7k to HMRC, that's how things will be in September anyway.

I am sure a DMP is the best way, I'm definitely not eligible for a DRO although I wish I was there's no way to make that work, I have more than £75 spare. I have a full set of defaults and have been paying £1 to each unsecured and £400 to HMRC.

I might have £250 spare a month out my usual wages, I've been using freelance money to clear debts but it's dried right up, and I want to find a way of using my full time wages to cover everything because the uncertainty is killing me. To be honest I want to stop working freelance completely the extra hours are too much and managing all the invoicing and trying to get work bookings adds to it. The September change is I will have paid my car finance off.

I don't think HMRC will accept less, I reckon they'll want £500 a month and I don't know what to do about that. I'd love to be able to use Stepchange again and just give them that £250 and forget about it, can I do that with a HMRC debt? They will still take extra action won't they, but the unsecured ones won't? If I self manage, do I prioritise HMRC? I could carry on the token payments until it's cleared, then do the unsecured debts.

My best option is probably to cut right back to the point where my kids go without Xmas presents and stuff to get that £500 a month and get the tax cleared, and I'm struggling to accept that. Or at least there'll be no Xmas presents until some freelance work appears again. Really regret working freelance extra to service my debts and not putting self assessment money away, I've essentially just converted unsecured debt to a HMRC debt which is worse, what a twit. I'm just looking for any comments that might help me get it straight in my head what I will do and stop ruminating about all this.

fatbelly

HMRC is a priority creditor. If you can keep them happy, then the others can stay on £1 until your circumstances change. 

That's not a huge amount of debt and you do have surplus income so i agree debt management is the way forward for you

thelibrarian11

Thankyou for just being a superstar. That's what I have in my head, negotiate with HMRC and plan my life round what they say. I hate that earning more has made this all worse my head won't leave that alone, but that's not the problem really is it, it's how I managed it all. It's not a huge debt is it, I'll try and focus on that instead.

RAS

The HMRC is priority but if they are happy with £400 so far, you might want to cut your family some slack and offer £450, and pay everyone else a £1. If you get freelance, put that towards the HMRC debt, after stashing the self-assessment money.

Think very carefully about your priorities are for that little bit of money. And remember the time with you is the most valuable thing you can offer your kids. Make basic pizza together from scratch and they'll have great memories.

On a basic level, is there stuff for a car boot or similar, just to raise say £200 for a bit of an emergency fund?


 

thelibrarian11

Well maybe my freelance will pick up again for some extra £ who knows, I never see what drives a company to book me. I'll have to pay more because we've just gone over a tax year so I owe for that year now too. They put penalties on if I don't pay what they want so I just have to do what they say.