Sleepless in Liverpool - worried about debt

Scousefire

Hi folks,

I am a bit embarrassed by the situation I have got myself into, and whilst I see from the forum there are other people with much more larger debts than me, it is keeping me awake at night and causing a lot of anxiety for me.

So, I am a single guy who lives in a three-bedroom house on the outskirts of Liverpool. I bought the house in 2019 under the right to buy scheme from the local housing authority when my mum sadly passed away unexpectedly. I was very lucky in the sense that I was offered the house for £33k and soon negotiated a mortgage of £190 per month.

Over the last few years my financial state has been much like a rollercoaster. Used some pay day loans, got myself straight again, then came into a large amount of money unexpectedly, pretty much squandered it over a couple of years, got a credit card, consolidated my loans with some grossly unwise decisions and now here I am pretty much in a pickle.

I remortgaged my home in 2024 and took out an 18-year mortgage at 5.94% which currently leaves with me with a mortgage of £47,000 to pay by 2029 (my house is valued at around £140,000). I am paying £376 each month now, which I totally accept is a lot lower than other people, but I still have credit cards and loans.

My monthly take home is £2,400 after deductions. My outgoings are:

£123 (total £5,400 owed)Loan until 2029

£100 (total £700 owed)Loan until September

£100 (total £1,800 owed) Capital One card with extortionate interest rates

£100 (total £1000 owed)Paypal Credit

Mortgage, council tax, home insurance on top of that, plus mobile phone contract, home broadband, gym membership which I don’t class as debt.

But, the fly in the ointment is I two friends/family members money too. One friend I owe £1,300 from a holiday last year, plus a family member I owe £2,700 to.

My friend is very understanding and has asked for £100 per month to pay him back.

My family member won’t necessarily be so understanding and is likely to need the money back a lot sooner.

Cards on the table, I am reckless with money, despite having a really responsible job. I have gotten better, but still, I am gutted, embarrassed and literally don’t know where to turn.

CliveOfIndia

Welcome to the forum.

First things first - don't feel embarrassed or ashamed !!!! All you'll find on here is objective help and no hint of judgement.

Next up, fill out a complete SOA : https://www.lemonfool.co.uk/financecalculators/soa.php

Select the "Format for MSE" option and paste the results into this thread. We can then take a look through your complete budget and offer impartial, objective advice. Often, all it needs is a fresh pair of eyes to spot easy savings you can make, or different approached to tackling your debt.

Well done for taking the difficult first step and posting on here, hopefully you'll realise that we're a friendly bunch who will do all we can to help.

RAS

You have already turned consumer debt into secure debt, which is almost always unwise. So don't do it again.

You need to budget properly. That means you list essential payments starting with mortgage, CT, utilities, food, insurance, travel to work, clothing. When you do that, how much do you have left over?

And since you have a spare room or two, you could get a lodger under the Rent a Room scheme, £7500 tax free. What's the Local Housing Allowance for single person under 35 years.

ManyWays

By "reckless", do you mean gambling?

Scousefire

https://forums.moneysavingexpert.com/discussion/comment/81917337#Comment_81917337

Hi ManyWays, not so much gambling, although I do the Irish lottery each week and the occasional football bet. When I say 'reckless', its more going out socialising when off work all the time, rather than limiting it to once or twice a month, takeaways when I could just as easily cook, that kind of stuff.

To be fair to myself that aspect I have knocked on the head a lot.

Scousefire

Thank you very much for the kind words and practical advice, I really appreciate it.

ManyWays

I think seeing a SoA would be a help. Getting a lodger for a year or two could let you transform your situation if you can also stop using the credit card and paypal completely. First paying back the family and friend debts, then the first loan will have been gone you can set about the clearing the others.

itsthelittlethings

Well done for taking the first step and admitting there’s a problem. Change can be slow but it’s definitely worth it. Seconded that an SOA will help people give advice.

When you say socialising is that around alcohol? Just wondering if that is a bigger issue than just the money spent (no judgement, I had an alcohol problem for years). If so perhaps consider looking for some help with that as it’s not the easiest habit to break.

Keep talking, support is here!

AndyD1978

https://forums.moneysavingexpert.com/discussion/comment/81917507#Comment_81917507

Thank you for replying itsthelittlethings, I really appreciate it. I can understand how that might seem, but thankfully there is no bigger issues. I have a very responsible job which I really enjoy so I wouldn't put that at risk. I will absolutely do an SOA and look forward to more support from folks on here.

saajan_12

https://forums.moneysavingexpert.com/discussion/6658981/sleepless-in-liverpool-worried-about-debt

Mortgage, council tax, home insurance on top of that, plus mobile phone contract, home broadband, gym membership which I don’t class as debt.

First step is to list these out, plus the other essentials like food and transport. Regardless of whether they are debt or not, it'll allow you to see if there's room to cut the cost or budget around these costs. Best way is to use the SOA linked upthread.

But, the fly in the ointment is I two friends/family members money too. One friend I owe £1,300 from a holiday last year, plus a family member I owe £2,700 to.

My friend is very understanding and has asked for £100 per month to pay him back.

My family member won’t necessarily be so understanding and is likely to need the money back a lot sooner.

Once you have the above budget, you can work out what you can afford to pay them back. They may well be more understanding if you make a start, actions over words and all.

marcia_

support in Liverpool. CAP helped me a lot https://www.longlanechurch.com/cap-debt-centre

CAB are good but difficult to get a face to face appointment https://www.citizensadviceliverpool.org.uk/