#DebtManagement #FinancialAdvice #DebtStruggles #CreditCardDebt
Hey everyone! I’m reaching out because I’m feeling a bit swamped with my financial situation after some business setbacks. I’m 27 years old and, after my business didn’t work out, I found myself in some pretty deep water with around £37.5k in credit card debt. 😬
Right now, I work in a commission-based role, which means my income varies quite a bit. My worst-case monthly take-home is about **£1950**, but on good months, I can make up to **£2400**, averaging around **£2000** a month. But with this kind of fluctuation, it’s really challenging to keep up with my payments. Here’s a quick breakdown of my debts:
Debt | Amount | Minimum Payment |
---|---|---|
AMEX | £4278 | £205 |
MBNA 1 | £5939.37 | £200 |
MBNA 2 | £2525.4 | £125 |
MBNA 3 | £6111 | £285 |
Lloyds | £2422 | £110 |
Virgin | £5496 | £120 |
Halifax | £5473 | £240 |
Zopa Loan | £4000 | £145 |
Insurance | £1000 | £150 |
The number of different payments is overwhelming, and I’m constantly worried about falling behind—especially during those tougher months. I’ve been pondering the following options:
– **Debt Consolidation:** Could rolling everything into a single loan with a lower interest rate simplify payments?
– **Debt Management Plan:** Is joining a plan worth it for reducing stress and gaining some structure?
– **Focus on Specific Cards:** Should I tackle the cards with the highest interest rates first to minimize costs?
💡 I really want to avoid a CVA, as I have plans for the future, like getting onto the property ladder once I’ve sorted this mess out. Luckily, my living costs are relatively low—just around £200 a month for food.
What strategies have worked for you in tackling similar debt? Any tips or personal experiences could be super helpful. Let’s chat about it! 😊
Thanks for your insights!
You say you worry about the months when you only take home £1950 but your average is £2000, which is very similar.
If I was you I would focus on two things:
1. Increasing your commission take home each month – this will have the greatest impact
2. Using this to pay off Lloyds and Insurance quicker, which will then reduce your minimum payments by £260 a month
I’d be more nervous about working commission only than the payments, I’d need a guaranteed wage to feel comfortable in that situation, then I could work overtime or and do private jobs in my free time and on the weekends (I’m in trades)
What are the interest rates for each card?
That’s £1580 just on minimum payments, and you’re earning £2000 a month. That’s 79% of your earnings going on minimum debt servicing.
I can only assume you’re living with your parents or something, as you cannot possibly be paying rent, bills and eating on £420pm.
This is a debt crisis, and you need to be speaking to a debt counselling charity such as Step Change or National Debtline to work out a way forward – which could mean an IVA, DMP or something else.
https://www.moneysavingexpert.com/loans/debt-help-plan/
You’re not going to be buying a house for quite some time with this level of debt, so I would focus on dealing with the debt and then rebuilding your credit.
Take home pay of £24k and you have ~£37k of debt – what is the annual interest on the debt? I assume the rates on the cards are not good?
If you want to clear this up in a resonable time frame with no default you need more income. Can you get a second job evening and weekends? You need all the money you can until you clear this up.
You need to minimise the interest on all of these. What are your monthly outgoings for living?