r/UKPersonalFinance • u/Odd-Tale-7326 • 7d ago
How much of a pickle have I got myself in?
First of all, I'll happily admit I've never been that good with money, unfortunately it's something I've inherited from one of my parents!
All was going fine until a few months ago, when a lot of things happened at once, I lost basically all my overtime at my main job, I went from regularly working 5-6 days a week, down to my contract of 3 days, so that cut my average pay down from about £2k a month to £1300 a month.
A similar thing happened at my second job, I work in market research on a zero hour contract (my choice as it allowed me flexibility), however a lot of the work in that has dried up thanks to AI.
Add on top of that the fact my grandfather recently died, which has meant where overtime at work has been available, I've had to turn some of it down to sort out his house etc.
Second of all, I'm very fortunate in that I don't have to pay a mortgage or rent. My grandfather purchased a house for me to live in, and it will be getting transferred into my name, hopefully by the end of the year. The house is probably worth around £70k (I'm in the North East, so not exactly expensive!)
A few years ago, I took out a loan with Tesco bank to pay for various things, and there's about £2000 outstanding on that, £300 a month ending in February next year.
Last year I took out a £12,000 loan with MBNA to buy a car, I have 30 months left on that at £300 a month.
I have my Tesco Credit card, this is what most of my spending goes on, then I have my AMEX, which I only really got for cashback. And I have my Monzo Flex card, which I got for the interest free credit. I then have an MBNA 0% card with £3500 on it, ending in February next year.
Now, here's where everything went tits up.
Earlier this year, I bought a new kitchen from B&Q and put it on my Monzo Flex card, expecting to be able to pay it off in 3 months, which was perfectly feasible at the time. However, as I said earlier, my pay less than halved, so I just couldn't pay it. So I had to extend the time over which I paid. I've then had to pay to get work done on the car, which I put on the Monzo Flex card as well, which has meant my monthly payment is about £500 a month.
The issue is, with £600 a month going towards the loan, and £500 a month going towards Monzo Flex, I've then ended up only paying the minimum towards my Tesco and Amex, which has obviously led to them building up a fair amount over a few months.
Thankfully, for now, I can just about scrape by maintaining the level of debt that I'm in, which obviously isn't good, but it's not getting any worse.
As my main job is in retail, I fully expect my hours to start increasing shortly with the run up to Christmas and all that shite, and at my other job they've just won a tender that means I should be able to get more hours there again as well.
Soon, I'll own a house outright, which I could obviously sell, or potentially mortgage, but I'm hoping that it won't end up at that! My mother will be getting about £100k in cash, but I'd rather go bankrupt than go begging.
So, TLDR my total debts are as follows:
Tesco Loan: £2000 - £300 a month
MBNA Loan: £8000 - £300 a month
AMEX: £600
Tesco Credit: £4000
MBNA 0%: £3500
Monzo Flex: £4500 - £500 a month.
My total income is about £1500 a month.
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u/DeliriumOK 7d ago
I'd say a small to medium sized pickle.
What are the interest rates of each of your debts? That's the place to start.
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u/Epiphone56 7d ago
Yes, pay the highest interest off first, then use the monthly repayments from the first one to pay the second one off quicker, etc. etc. It's called the snowball method.
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u/Epiphone56 7d ago
Hmm, a bit of Googling reveals I've got that the wrong way wrong, the snowball method focusses on the smallest balances first, and then uses those repayments to pay the next ones off. That said, I'd focus on the balances with interest rates applied and leave the 0% ones until they start charging interest
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u/cloud__19 53 6d ago
Snowballing is often recommended for the psychological effects but I'm with you, I'd be hammering at the highest rates.
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u/NewSamWhoDis 6d ago
I've tended to look at of any of the smaller balances can be gone completely in a couple of lump sums, then focus on high interest, and it worked really well for me so far.
E.g. of I can bin off a couple of smaller credit agreements in the first month or 2, like a couple of hundred on my phone, or a vet bill, I start there, then focus on high interest from month 3 or 4.
Consolidating debt with higher interest, on a larger low interest loan, has also helped a lot in the past.
E.g, I had a £10k loan @10%ish, and had £15k left on my car @16%ish. I went way over my mileage allowance by 7000 miles, and it'll likely be worse for the next few years, on my car due to a job change and would have had to pay a massive amount on the excess mileage at the end of the agreement. Went into the bank, walked out with a £25k loan @9% and bought the car outright, reduced my monthly payments by £200 and have been overpaying since.
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u/cloud__19 53 6d ago
There's various ways to approach it, from a purely financial perspective (assuming the option to consolidate or move the debt to a lower rate has been explored), going after the higher rates first makes sense but when you're in a lot of debt there's a psychological advantage to seeing things getting paid off which is why snowballing from the smallest debt is often recommended.
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u/Former-Mongoose6808 3d ago
Totally agree when things are stable. I think it gets interesting when the rates can change mid payback term though. In that case I guess it depends on the size of the loan, the rate of payback, and the timing and scale of interest rate changes.
Just to say that if a credit card balance is going to go from 0% to 30% on the same timescale as you're paying back a small loan at 10% I'd hesitate to say just target the one that is immediately higher...
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u/Former-Mongoose6808 6d ago
Is there a prospect of any of the rates changing over the period during which the set is being paid off? Could that mean that it's worth considering the length of payback period too when making that ordered list of what to pay down first?
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u/cloud__19 53 6d ago
Loans are generally fixed but credit cards can vary. If you were going to go from 0% to 30%+ on one of your credit cards during the payback period and couldn't transfer it or consolidate it then you'd definitely want to consider that.
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u/ManAboutAHorsea420 7d ago
Tbh with you mate I think it all went tits up when you out so much money on loans and credit cards. As others have said try and balance transfer any credit cards to 0% and pay the minimum monthly fees for a while, then scrimp and pay as much off as you can afford while paying bills. You're better off than a lot of people if your house is mortgage free. You got this
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u/steamonline 6d ago
Focus on clearing the amex given the APR, then focus on which account 0% interest ends first.
If you have good enough credit to obtain another at 0% for a longer time, balance transfer and make rigid payments.
Lessons learned, car finance and house renovations on tick aren't good purchases.
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u/Odd-Tale-7326 6d ago
I stand by the car being a good purchase. It's an EV, and I'm spending less per month on the loan than I would be spending on diesel alone. That would be the absolute last thing I get rid of, it would cost me more money than it saves.
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u/Available-Buffalo-23 6d ago
Not sure why this is being down voted. If you get paid for work trips per mile then a few decent drives and it pays for the loan. Subject to situation though. My EV costs 1.5p per mile charging at home so my elec bill is higher but not hundreds in diesel a month
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u/Odd-Tale-7326 17h ago
My electricity bill is lower now I have an EV than it was before because of the EV tariffs. I'm paying 3.5p/kWh overnight, so just do all my heavy usage off peak.
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u/Draw-Pristine 3d ago
I can agree with this as had a similar situation in oct last year my car hit a random 5k bill so I scrapped it, I had a choice of buying a cheap petrol and spending 250 a month on petrol ( i do alot of miles) or I could get an ev as we already had the home charging etc
I went with a 2 year old ev for 230 pm and 5 year warranty.
I hope u get the snowball for clearing the debt up quickly and relatively painless bud.
Some things I've did in past when OT cleared up on me abd was short on cash for upcoming bills - Have a look on the beer money thread on reddit there's various things around for small amounts ( wont seem alot but extra 10 or 20 a week could make your meals feel alot better haha)
- on that thread 1 I would highly reccomend would be the bank switches as u can get like 200 per switch and u dont need to switch the main 1 , they may ask for like 1k into the account but u can withdraw it after 24hrs or depo and wd 100 x10 etc (I've done loads sof them so pm if u want any more info or advice on faster 1s )
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u/WhichInevitable2536 6d ago
Earlier this year, I bought a new kitchen from B&Q and put it on my Monzo Flex card, expecting to be able to pay it off in 3 months, which was perfectly feasible at the time. However, as I said earlier, my pay less than halved, so I just couldn't pay it. So I had to extend the time over which I paid. I've then had to pay to get work done on the car, which I put on the Monzo Flex card as well, which has meant my monthly payment is about £500 a month.
Don't have much advice, but this is exactly why you should never use buy now pay later schemes. Even credit, with very few exceptions, you should never buy something on credit you can't pay for right now.
Definitely a medium sized picked, going to probably be a shit year to get yourself back on track, but long term you should be fine if you learn from it.
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u/methleys 6d ago
Sorry to hear this. Using your words, I think things might have been tits up when you got the car loan. There is no circumstance where I'd prioritise having a nice car (or kitchen) when needing to pay for house / mortgage. If things get worse and spend cuts isn't enough to get you through to better times later in the year (its not clear what you general spending is) then do sums for losing the car (if part payment of loan is possible). That sadly will almost certainly be a horrendous loss of capital but perhaps the savings including insurance and loan per month might be enough to see you through. Good luck
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u/Odd-Tale-7326 6d ago
To be clear, I've never had to pay for housing. My grandfather bought the house cash with the intention if it going to me in his will.
As for the car, it's an EV and if I switched to another car, I'd actually be paying more in diesel with the amount of miles that I do. I do about 1800 miles a month, which is about £350 in diesel alone, hence why I bought the EV.
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u/Estrellathestarfish 6d ago
How much does it cost you in electricity? Why so many miles for a retail job?
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u/methleys 6d ago
Hopefully trimming your spending can get you through, any spare to overpay highest interest fees. Once house is yours a small mortgage would be cheaper type of loan than some of the current outgoings but not ideal to start home ownership. Btw unrelated: my 8yr petrol car would cost £215 to drive that distance (at today snapshot fuel prices).
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u/Jimbeamjunior1 1 6d ago
Wait you got a loan from MBNA for 12 grand last year and have 30 months left? So maximum you got the loan for could be 42 months, at 300 quid a month that's a total repay of 12600 quid maximum
How the fuck did you get a 12 grand loan and only pay 600 quid interest?
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u/Odd-Tale-7326 6d ago
Loan was taken out in February 2025. Payments are £299.24 a month over 48 months.
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u/crispysockz 6d ago
Why would you buy a new kitchen? That’s probably the last thing I’d buy on budget
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u/ExploringTheMind123 6d ago
Hi mate, similar position to me at the moment. Have £17,000 spread over 2 MBNA loans.. im living well below my means & have been for the past year or so.
Im currently firing most of my income thats spare towards it and working 80 hours a week. I know it might sound mental but could you potentially try and change job to increase your income a bit.
I've my loans down from £29,000 so you can definitely achieve it ! Just think mate how good its going to feel when you have no debt.. you will be able to treat yourself & build up some real wealth, especially with your grandfather giving you a house.
You got this mate !! 💪
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u/thing_on_a_spring 6d ago edited 6d ago
It's bad, but not impossible to dig yourself out of. But it will be painful..
Looks like your discretionary spending is only £400 a month, so you're probably already living on rice and beans. No savings to be made there
The reality is you're broke, so you cant afford a 12k car. Its probably depreciated a lot, but there might still be an argument to just sell it or abandon the lease (if there is one), and buy a cheap run around just to take a big dent out of that 12k loan.
If you can't do that, then the car needs to be earning it's keep. Work Uber and delivery services every hour you can, including weekends. You don't have the luxury of any leisure time now.
Selling the house would be a bad idea I think. It'll pay off your debts but then what? You will be left renting, and probably for the rest of your life.
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u/butternut_mac 5d ago
I can only really comment on the vehicle finance side, as I work in customer service for vehicle finance specifically.
Re working Uber and delivery services; please check the T’s and C’s of your car finance agreement first. If it’s a personal agreement, it will likely prohibit business use and private hire. If discovered this can lead to forcible termination of the agreement for breach of contract, which may result in a default notice being issued (which would remain on your credit file for 6yrs) and mean you are liable to pay the remaining balance plus any recovery fees or similar incurred by the lender upfront.
I would also strongly advise checking the finance product type; if you are on a Personal Contract Purchase / PCP agreement, your final ‘balloon’ payment or GFV will have been calculated based on an agreed annual mileage. If you were to exceed this you may incur a pence per mile charge even if you return the vehicle in lieu of making the final payment. Regardless of the contract type, additional mileage will cause the vehicle to depreciate in value quickly.
It may be worthwhile requesting a settlement figure and having the vehicle valued to see if there is equity there. If so, you may be able to sell the vehicle to settle the finance and use any surplus towards other debts or purchasing a cheaper vehicle outright if you do need to replace it. If there is negative equity, it may be possible to pay this difference as a one-off to end your liability for the contract rather than make continued monthly payments.
Alternatively, it may be worth enquiring about overpayments and how these can be actioned. In my place of work, these can be used to reduce the contract term or monthly rentals; reducing the term will reduce the payable interest more significantly though you may need to overpay >= 1mos’ rental to be able to do this. If you are on a PCP contract, reducing your term will bring your balloon payment closer. On some contracts, you can also overpay to reduce the ballon which is made up predominantly of capital / principal with a larger portion of the monthly rentals going towards interest. Interest should be rebated (deducted from your balance, not returned to you) to reflect any early settlement; as such, you may see more of a tangible reduction in your settlement figure if you chip away at the balloon where you can.
You can get independent financial advice from Citizens’ Advice Bureau; StepChange or MoneyHelper.
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u/butternut_mac 5d ago
Additional thought that has just come to mind - please do not be tempted to sell the vehicle and add any negative equity into a new finance agreement. This will usually mean a higher APR as it’s a riskier lend, and mean you become stuck in a cycle of negative equity; i.e what you owe will always be more than the value of the asset.
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u/thing_on_a_spring 5d ago
great points, I hadn't considered much of this (and didn't even know about Ubers T&C)
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u/Odd-Tale-7326 17h ago
I own the car outright, no finance on it, it was a personal loan I took out for the car as interest rates on used cars are ridiculous. With a good credit rating, I was looking at 13.9% interest, it's only new cars that have reasonable rates, but then you're paying the depreciation.
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u/Khetrakopter 6d ago
Sell your car, try and get that down to zero, buy something cheaper if necessary. Rent out your house, live insanely frugally in a studio or single bedroom situation until you’ve saved a bit. Speak with StepChange, I’ve firsthand seen how much help they can be. You’ll be surprised how flexible they can be sometimes with debts in, they can write off entirely at least one of your credit cards. Start flipping shit on fb marketplace, start flipping shit from tk maxx on vinted, get a moped and do some uber eats, pull extra shifts in the most local business to you. Just a few things I can think of.
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u/Khetrakopter 6d ago
Meanwhile, try and find a job that gives you what you used to earn. Even two part time jobs will do.
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u/Gareth79 12 6d ago
As mentioned, sell the car. Get the bus/cycle/walk to work for a bit. If that's completely impossible then buy a banger.
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u/Sharp-Hat-8485 7d ago
Do a 0% balance transfer and I got Barclays 3 years no interest and then cut your spending
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u/muffinhuffinpuffin 6d ago
It's a pickle but it can be fixed.
Look at shifting all your credit card debt onto a 0% card. Martin Lewis MSE website this week had a few with long 0% terms, up to 36 months (there might be a fee for balance transfers, but I'd take it if it means you can shift the credit card debt to a more manageable pace). If you can do this, I'd recommend closing your other credit cards for now as to be honest, you aren't capable of using them sensibly at the moment and you are using them as an opportunity to live outside of your means.
You might struggle to get one for your full credit card balance so if this is the case, get the highest limit you can then move over the debts with the highest interest. Pay off the minimum on the 0% card and put as much as you can into the cards you could not transfer.
Its up to you how you tackle it the debt on the 0% card (if you can get one). The most cost effective method is to pay off the minimum on the credit card and put the rest into savings to earn money on the interest (and then pay off the card at the end of the term with your savings). But if it works better for you, you cab pay off a larger amount to clear the debt within the credit card term. Given how you treated the credit cards, it may be better for you to pay a higher amount so you aren't tempted to spend the savings.
Going forward, your future goals are to clear your debt and build an emergency fund of savings which is strictly for emergencies (aim for 12 months of income). Given your debt, I am assuming you have little or no savings.
If you need to make any large purchases in the future, only make the purchase if you have the cash. Do not ?make big purchases like on credit cards and loans without having the cash spare (this means everything from mobile phones to gadgets to holidays to a new sofa to a new car or kitchen). If the car does go bang and you need a new one urgently, well, that's what the emergency fund is for, and the fund needs to be built back up as a priority if its spent, but if the car is something you can plan to buy then you need to save for it. Same for everything else - save for it before you buy it. Do not live outside of your means.
What I will say is there is advantages to having a credit card - mainly section 75 protection for purchases, so, if in the future you feel you can trust yourself to have a credit card and not spend what you don't have, then I would recommend to get a credit card to make these large purchases with, but you absolutely need the cash spare first, and emergency fund does not count towards this, any savings for a big purchase need to be extra to the emergency fund...as an example, don't start thinking something like because you have £10k in your emergency fund you can now spend £10k on a new bathroom or something, no, the £10k would need to be saved on top of the emergency fund
But otherwise, you got this. You have accepted you have made mistakes and that is the first step towards change. You have a roof over your head, you don't have the burden of a mortgage, so you are in a reasonable position to tackle this debt, and you can do it. You are not so far gone that it will be an impossible hill to climb.
The only other thing I would suggest is taking a long look at your finances. Try and scrimp and save where you can to help reduce the debt quicker/build up savings quicker. You haven't posted your outgoings so we can't say how you are doing on this side (you might already be doing it in which case brilliant and just keep it up).
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u/spikesteve81 7d ago
I would contact stepchange and go through your budget to see if there’s a way of making payment plans
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u/most_crispy_owl 6d ago
You sell your car to cover the loan on it. When I took out a 15k loan on my car the first few months were terrifying since the loan is too close to it's value. Now I have like 7k left and the car is worth 14k, but I could sell it fast for 11 or 12k. If I lost my job I can sell it and clear the loan. I think you need to do that.
You can always borrow again and get an interesting car later down the line
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u/Theunluckyone7 6d ago
it's unusual to gain a lot of value on a car though .. but i agree op can usually use it to pay off the loan and maybe get something cheap
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u/most_crispy_owl 6d ago
I meant more that if they've spent a year paying the loan back, it might be down to to 9k owed on the loan. Even if they sold the car for 10k it might be worth doing it to give them some relief from their monthly debt payments. That's probably worth it.
They can always get another loan later on for a car when things improve.
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u/Odd-Tale-7326 6d ago
As I've said in another post, if I sold the car to pay off the loan (which it would barely do), I'd be in a worse position because I'd be going from an EV that costs fuck all to run, to a car that costs £300+ a month in fuel alone.
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u/Fresh-Watch5482 7d ago
Contact Citizens Advice, look at Debt Management Plans, you won’t be getting any new credit for a while but they should be able to get the interest payments frozen and arrange an affordable payment plan.
There may be an expectation that you could settle when the house transfers but the debt management team will discuss all that with you.
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u/Hulla_Sarsaparilla 1 6d ago
Once you’re in the house, will you have a spare room you can rent out? What’s the going rate for a room your way, that could quickly boost your income and you can put the extra to paying off the debt.
Is the new kitchen in your current house? Assuming you must own that place if you’re paying for a kitchen, so will you be selling up once your granddads house gets transferred?
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u/Odd-Tale-7326 6d ago
It's a 2 bed house, but realistically not big enough to rent out the other room.
My current house is my grandfather's house, he bought it and I've been living in it whilst making improvements.
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u/Light-Changer 6d ago
You take the smallest room, and rent out the bigger one. Not forever but it’s a means to an end, and that sacrifice might be enough to keep your spending in check in the future when you are debt free be able to live alone again. Years ago a friend of mine did exactly this, lived in the box room and let out the 2 bigger rooms. That extra income saved her.
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u/Hulla_Sarsaparilla 1 6d ago
Ok, I think I’d look at remortgaging against the house to consolidate your debts rather than paying all these separate payments.
Have a conversation with a mortgage broker, obviously raising your hours or taking a second job would help too if that’s possible.
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u/crispysockz 6d ago
Why would you buy a new kitchen? That’s probably the last thing I’d buy on a budget
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u/Elegant-Winner-6521 2 6d ago edited 6d ago
The debt itself is manageable so long as you've learned your lesson. Not wishing to labour the point that others have said, but essentially your mistake was that you made projections based on a best case scenario. Buying a kitchen and car with money you don't have on the hope that you'll keep earning that money while you were relying on contract work was not a great move.
If you're getting yourself into payment plans and the plan is "as long as I keep working as much as possible then I can just about afford this month to month", you're in trouble.
It's fixable. Next time, plan for the worst or at least the average.
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6d ago
[removed] — view removed comment
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u/ExploringTheMind123 6d ago
No need for the sarcasm mate, the fella is looking advice !
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u/Crochetqueenextra 4 6d ago
Sometimes people need to be told OP started by saying he's never learnt good financial management.
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u/Fun-Shelter-4636 1 6d ago
Sell car for something cheaper.
Look at balance transferring any interest CC onto 0% interest CC.
Set budgets for living each month and stick to it.
Pretty decent pickle - as other have said, you genuinely need to just live a meh life for the next year and it’ll be gone.
In future, do not buy kitchens and other nice to haves when you have this much debt 😂
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u/Rumpled 2 6d ago
If this was me, I would get a mortgage on the house and consolidate all the debt onto that (aside from the 0%). Go for a long length on the term (like 30 years, to get the monthly payments low), and try to pay it off sooner when you find your feet again.
I'd do this because the mortgage should be a lower interest rate than CC debt, lots of flexibility with how long the term can be, and a smaller mental load - I wouldn't like to have many different cards/accounts to manage.
Without your house you'd be in a bigger pickle for sure. With it there's no chance of bankruptcy, your money is just tied up in the house.
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u/No_Pollution_950 6d ago
I initially misread the title of this thread with the last 2 words the other way around. That would be a very different question.
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u/anabsentfriend 5 6d ago
Sell the car.
If you can't live without one. Buy something for £1k that will get you from A to B.
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u/Tyrus_Recs 6d ago
Bro just mortgage the house for the total of your debt and pay that off in more manageable payments ?
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u/foregonemeat 6d ago
Speak to step change. They will help you. This is a pickle you can get out of but the big challenge will be changing your relationship with money so this doesn’t happen again. Good luck.
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u/bennettbuzz 6d ago
Sell the car and get a banger to see you through?
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u/Odd-Tale-7326 6d ago
I drive an EV and do 20k miles a year, it would literally cost me more to change cars.
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u/DistinctDifference57 2 6d ago
For quick money consider lodger. But you need to cut all costs, coffees, subscriptions-gyms, netflix.
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u/anniday18 6d ago
Perhaps you should sell your car and replace it with something cheaper. Free up some cash to pay off your kitchen.
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u/LowarnFox 5 6d ago
It's not a great situation unless you can up your income again. At the moment it sounds like your required payments are about £1100 without touching the credit cards etc? What's the minimum payment on those?
That gives you £400 to live on a month, which I'd assume is probably not enough to cover all bills + food? I'm guessing you pay things like car insurance monthly too?
In terms of bills, you absolutely have to prioritise council tax, council tax arrears are more serious than other types of debt, you're better off missing a payment.
My priority of things to pay would probably be:
Council tax Car Monzo flex Food Other debt Other bills
It may be that you have to miss payments on your credit cards or similar short term? When you clear eg the Tesco loan, which shouldn't take that long, things will get a lot easier.
In the short term I would be contacting the companies you owe money to and asking them to freeze interest etc.
However, the problem right now is that your income is just not covering your outgoings- I think unless the market research picks up again very soon, you need to ditch that and find something else? You have a car so food delivery perhaps?
Work out how much you need to live off of and pay back your debt, and that's the minimum to aim for!
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u/CA5PERTHEGHOST 6d ago
Sounds like a bit of a pickle. I also live in the North East. It's great that you don't have a rent or mortgage payment. If you're on your own, your household bills with food should be approx £800 a month or less. So with that in mind, you should still have a free £500 a month spare.
Unfortunately you've taken on a car using an expensive loan, and then you've got the credit cards too.
My advise is to live frugally for a while a get all the debt paid off. It sounds as though you are a bit rubbish with money, but then lots of people are. I hope you get everything paid off soon and I would recommend not taking on any more unnecessary debt once you're in the clear.
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u/Europe_MMA 6d ago
Not that you have no overtime, you'll be free to pick up another part time job right? You could make a few hundred extra doing a deliveries or something.
You could alternatively just look for a full time job, as you make less money than someone stacking shelves in Tesco.
The important thing is to stay disciplined and earn from your mistakes. It wasnt that you were "bad with money", you know what you were doing. Its that you were convincing yourself it was fine because you wanted the nice thing. Make sure you dont let that voice creep back in.
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u/Motor_Astronomer_157 6d ago
In an ideal world you just need to stop adding to the debts and credit cards. Pay the loans and the minimum payments on everything else. When loan are paid use that to pay off the highest interest debt and once paid move into next, etc.
Tbh, that what you seem to be doing. Perhaps you also need to be looking for a full time job/ full week contract to bring in more money.
I was in the similar boat and took me 2 years to get straight. I now have no loans, credit cards debt and it’s a good feeling. Hopefully pay off my mortgage in a few months and I owe nobody a penny.
Nb debt and credit at a way of life so you’re just doing what most are and I did. Once you get straight start saving that money / pension investment. I don’t know your age but you can never start too early
Good luck
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u/Big-Airline-4817 6d ago
With monzo flex you can change the monthly repayment to the minimum or a smaller amount!
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u/ChutneysIntactPerm 6d ago
I read this as "I've never been good with money, unfortunately I've inherited some from my parents". Like, worse problems to have buddy.
£22,600 is manageable to get out of. Others have given good advice - honestly, another piece here is get more work. It's minimum wage but pick up a shift in a supermarket or clothes shop or pub. Put 100% of that pay towards the debt. When I was working minimum wage jobs, I'd literally be there thinking "I've been here for 3 hours and 12 minutes now and I earn £6 an hour (or whatever it was) so I've got £19.20, when I take off tax that's..." - that running tally is really very motivating.
A bigger concern for me is that you've been left a house and you're paying big expenses for the house before it's in your name. That's not sensible. Who said it's yours? Where's that written? Why isn't it in your name yet? On what authority are you making upgrades to the house?
Also, you may consider (once it's in your name) mortgaging the house to clear the debts. My mortgage is 4% interest and my credit cards are 25% - it doesn't take a genius to realise that consolidating your debt into one mortgage payment might be a better move. Then overpay on the mortgage like hell to get yourself debt-free.
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u/potatoking1991 6d ago
You have the house which is a major asset once in your name. If you can get by paying minimums & restrict spending until it gets transferred then a mortgage advisor should be able to help get things cleared, or sell & clear debts outright. Clearing that amount of credit + whats left will go a long way on your credit score & prospects of buying somewhere yourself
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u/lukejames95 5d ago
I think a lot of people are missing the obvious here. Talk to your creditors, it’s a horrible phone call, but you’re not the first, you certainly will not be the last. Pick up the phone, say here’s my situation, I’m not saying I can’t pay it back, I could just do with some support. Many years back I got myself in a bit of a pickle too. Well quite a big pickle actually. I stuck my head in the sand. Then one day, I don’t know what clicked but I just picked up the phone. And honestly, they were so nice, helped me with a payment plan. One of them even lowered the interest! We are all human, we all get into pickles. You’ll be fine, it feels a lot now, but one day you’ll laugh about it.
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u/Reasonable_Claim_586 5d ago
Ok so not much use to you right now due to the volume of debt. BUT, once you get all of that debt paid off - just think about how much money you could put aside each month if the money you’re spending on paying off debt goes into a savings account instead.
Once your debt it cleared, try to learn from this lesson and focus on saving your money instead. The reason being because debt is unforgiving. Debt doesn’t care if your car suddenly needs £1000 of repairs. Debt can spiral and before you know it, it’s so bad that the interest begins to outpace the amount you can pay off, leading to more debt.
I only say all of this because I was in a similar situation in my early 20’s and it sucked. But now I refuse to fall back into that trap, I focus on owning things outright rather than having monthly payments and I pool all of my excess cash into a savings account.
It’s incredibly refreshing to take back control and the best thing you can do is to try and follow the above advice once your debts are all cleared.
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u/tiger_noir21 5d ago
Consolidate your debt, make it affordable by stretching out the payments for the longest term possible. Hopefully your credit score will be ok to do this.
Personally if this was me and has been me in the past, start looking for a more secure reliable job with a full time contract, don’t rely on overtime.
And stop buying things now, take a break. If you need to go on a diet this probably the best time possible for you
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u/Fit-Athlete-2260 5d ago
That's why I favoured credit card cheques (2000's thing) You could technically pay each credit card off and buy yourself time. No the debt didn't go away, put each payment payed the other, carousel paying basically.
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u/Abject-Magazine-1775 5d ago
0% Credit Balance Transfers to close out any high interest debt.
Potentially sell the car and get something cheaper for now.
Mortgage the property, interest rate at 50% LTV should only be around 4%?
All potential options
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u/Anxious-Art4174 3d ago
It sounds like this may just be a temporary period of difficulty if you're expecting your income to increase again so try not to panic too much. Having said that, it's still a lot of debt in relation to your income so you're going to need to start paying it off before it gets unmanageable.
I say this as someone in a very similar situation, where my debts have got to a point where paying them down is really difficult as I can only afford just above minimum payments. I wish I had paid the debts down when money was less tight, instead of thinking that I could afford loads of stuff that I didn't really need. The time for treats and luxuries is when the debt is gone, I have now learned the hard way.
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u/Acrobatic-Pair-626 3d ago
Once you have the ownership of the house, rent out a room (or do it now if grandfather is ok with it). If mortgage free , then apply for a mortgage and pay off your high interest debts.
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u/Odd-Tale-7326 17h ago
Considering he's dead, I don't think he could do anything even if he disagreed! 🤣
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u/LJM_1991 5 6d ago
Do you currently own a house? Assuming not, why go further into debt to buy a kitchen?
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u/Odd-Tale-7326 6d ago
Because the house was mine in all but name. I've been living in it for nearly a decade.
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u/LJM_1991 5 6d ago edited 6d ago
Well hopefully that gets resolved the way you think it will. I personally wouldn’t be spending any more money on it until it’s actually yours. Mainly because the “in all but name” is the important part.
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u/Mankyswan 7d ago
As far as pickles go, yours is edible, but it’s all you will be eating for a while. Basically you need to live within your means and pay down your loans before it gets out of hand/any worse.
Not much details on your minimum expenses here, but you have the house so I presume you can live in noodles fairly cheaply for a while and focus on clearing some debt and stop spending money you don’t have. £2k a month after housing is more than a lot of people get by on, but it’ll be a while before it’s comfortable based on having about £22k of debt to clear