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.