Yeah, I can help break this down. Let’s map the situation and then think through moves:

Current Situation

Income: IT contractor, very high day rate (£750/d → ~£170k pa), but inconsistent cash flow. Not paid until end of next month.

Debts:

£18k Amex (in collections, crazy APR).

£10k Santander card.

£22k Santander loan.

£65k mortgage (manageable, low LTV, good rate).

£50k car PCP (ouch, £700/m).

£20k HMRC corp tax (2 yrs old).

£200 arrears Sky.

£200 arrears mobiles.

Gas/Electric arrears.

Totals:

£70k unsecured debt (excl mortgage).

£130k total debt (inc mortgage, excl car PCP).

Assets: House with equity (85% owned, 15% LTV). Car (but financed). High earning potential.

Problem: No savings, debts ballooned during layoff, lenders refusing extra borrowing because contracting = high risk.

Immediate Red Flags

Amex in collections → this will tank credit if not already.

HMRC tax debt → priority debt, they can enforce harshly (bailiffs, court, director bans).

Mortgage + utilities are priority → must be paid first to avoid repossession / disconnection.

Car PCP → expensive liability, not an asset.

Strategic Priorities (in order)

Survival baseline: Keep roof, energy, and work mobility. Pay mortgage + gas/electric first, always.

HMRC: Engage with them directly. They will do time-to-pay arrangements (installments). Don’t dodge them.

Collections (Amex): Don’t agree to crazy repayment terms. Negotiate. Offer token payment until contract pay hits.

Car PCP: This is a killer (£700/m). Seriously consider voluntary termination if possible, or swap down to something cheaper once stable. Free up £700.

Unsecured debts (Santander, Sky, mobiles): Non-priority. Minimums or token payments until back on feet.

Budgeting: Strip out all direct debits/subscriptions, track every outgoing. They admitted they never tracked before — this is critical.

Medium-term Play

Once new contract starts:

Funnel first month’s income into clearing arrears (HMRC, utilities, mortgage buffer).

Build a small cash reserve before tackling unsecured.

Attack high-interest debts (Amex, Santander card) first — but negotiate frozen interest if possible.

Explore debt consolidation after stabilising income — but probably not via mortgage (since lender refuses). Could use specialist contractor-friendly lenders or even IVAs if unmanageable.

The Harsh Truth

This isn’t about borrowing more — they’ll struggle to remortgage as a contractor right now. It’s about triage and cash flow management until income resumes. Once they’re earning again, the numbers are survivable, but lifestyle needs cutting back.

👉 If I were advising them directly, I’d say:

Call HMRC tomorrow → set up time-to-pay.

Pay mortgage + utilities.

Offer token payments to others until end of next month.

Ditch the car PCP as soon as practical.

Use the massive future income to bulldoze unsecured debt in 6–12 months.

Edit

Pub: 05 Sep 2025 06:50 UTC

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