Don't know where to turn

amazing1

Hi- first posting so here goes.....

In the past 15 months we have had to put two businesses into voluntary liquidation.
My husband has been out of work for several months as a result and I feel after a lot of help from family there is nowhere else to go. Although my husband has picked up some work 'on the tools' the work has not proved regular enough to cover our outgoings (though I really wish he could plug away and help us keep our heads above water).

For several years our businesses sustained us in a comfortable lifestyle and we are now left with a mortgage, car finance etc that are just unaffordable, alot of the debts were ran up in attempts to refinance the businesses:-

Mortgage joint names £1,350/mth (£238,000 total)
HP car agreement £380/mth (approx £15K remaining) my name only
HP car agreement £225/mth (approx £7.5K owing) in my name only stupidly signed a personal guarantee on a business agreement
Secured personal loan £250/mth (approx £22K owing) in both names
Business Overdraft to arrange settlement £15K owing in my husband's name only personal guarantee
Personal Loan £250 (approx £10K owing in husbands name only)

I am working and have a net income of £1,630/mth plus £125 child benefit and £40/mth tax credits.

Our house is on the market- valued at £375,000- but up for £335,000 and not a sniff of interest due to current climate.


I don't know if an IVA would work or if Bankruptcy is the only option. As I work in Accountancy- I wanted to avoid Bankruptcy if at all possible but maybe a career change is what I need (hasn't served me well to date). Actually, to be fair we did run successful businesses for a considerable time and every decision we made we felt was the right one at the time.

Can anyone help/advise? We have informed our creditors of our position and have pretty much miraculously kept the majority up to date or come to arrangements with them but obviously we are now living on handouts from family just to eat. I am making myself ill with the worry. We just want a clean break and have considered leaving the country but obviously want to come to arrangements with all our creditors and still have enough to start afresh- we have two young children. If the house would sell we would be OK- but thats not going to happen any time soon.

HHH_2

please have a look at CCCS website and fill in their debt remedy on line thingy it will give you some idea of your options. then give them a call and tell them what you've said on here. they are very kind and non judgemental, they've seen it all and best of all they are a charity so anything they do for you is free. in the meantime I know poeple on here will ask to see your statment of affairs to see how thay can help. there is a template maybe at the top? not good at that stuff myself but Im sure someone will give you the link.good luck and dont despair

GeorgeUK

Hi A1

Lets hold off on the IVA and bankruptcy talk for now.
Post up a statement of affairs (SOA) so we can see the income, debt and expenditure. We may be able to make some savings in the expenditure and possibly reduce some of theinterest you are paying. Even if that isn't enough, you can still contact CCCS or Payplan to possibly arrange a debt management plan (DMP) to pay a reduced amount to your creditors each month.
https://www.makesenseofcards.com/soacalc.html

milliemonster

Amazing, your name says it all really, I am truly amazed how you are managing all this on your current level of income, I know that doesn't help you though.

Firstly, I think HHH's advice is spot on, you need to contact one of the debt charities to discuss your options.

Post up an SOA as soon as you can get all the info together, this is the link http://www.makesenseofcards.com/

Have you considered dropping the price of your house again?, unfortunately, the price bracket you are in means in the current climate you are going to get few viewings unless you drop the price SUBSTANTIALLY. I am presuming your mortgage is already interest only?

Have you paid more than half on the HP on either of the cars? if so you may have the option of handing one back and having no more to pay.

Is there any chance of your husband getting some more work, anything to bring more money in?

amazing1

Here is my Statement below:-

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1630
Partners monthly income after tax....... 0
Benefits................................ 165
Other income............................ 0
Total monthly income.................... 1795

Monthly Expense Details
Mortgage................................ 1350
Secured loan repayments................. 248.95
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 180
Electricity............................. 100
Gas..................................... 50
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 0
Mobile phone............................ 10
TV Licence.............................. 10
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400
Clothing................................ 20
Petrol/diesel........................... 120
Road tax................................ 15
Car Insurance........................... 40
Car maintenance (including MOT)......... 20
Car parking............................. 20
Other travel............................ 0
Childcare/nursery....................... 120
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 0
Life assurance ......................... 40
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 2843.95

Assets
Cash.................................... 0
House value (Gross)..................... 335000
Shares and bonds........................ 0
Car(s).................................. 18000
Other assets............................ 0
Total Assets............................ 353000

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 238000...(1350).....4.25
Secured Debt.................. 22000....(248.95)...10
Total secured debts........... 260000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Personal Loan..................10000.....250.......8
Car Finance....................15000.....379.......8
Car Finance....................7500......225.......8
Overdrafts.....................6000......0.........0
Personal Loan..................1400......30........8
Credit Cards...................400.......20........18
Business Overdrafts............15000.....0.........0
Total unsecured debts..........55300.....904.......-

Monthly Budget Summary
Total monthly income.................... 1,795
Expenses (including secured debts)....... 2,843.95
Available for debt repayments........... -1,048.95
Monthly UNsecured debt repayments....... 904
Surplus(deficit if negative)............ -1,952.95

Personal Balance Sheet Summary
Total assets (things you own)........... 353,000
Total Secured debt...................... -260,000
Total Unsecured debt.................... -55,300
Net Assets.............................. 37,700

Created using the SOA calculator at https://www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful.
Thanks everyone for your input so far.

The thing is- if my husband had regular work- I think I could cope albeit extremely tight. For instance he pulled in £1,800 last month which kept the wolves at the door for another month. Also, selling stuff on e-bay sustained us for a time.
One of the HP agreements for the car was only taken out just over a year ago so I need to maintain another 18 mths before I can hand it back. The other was in the business name and I have spoken to the finance company who did offer to put me on a twelve month payment plan for the shortfall if I could find a buyer for the car.

Also I have put the estimated value of the cars in the assets section (as it would not close the form until I did)- however, that is a bit misleading because they are on HP.

We asked the mortgage company to put us on interest only and use the difference to start clearing the business overdraft. We made this offer over a year ago- but we are still on Repayment, they aren't pressing us for the business overdraft as such and if and when they do we just keep reminding them that we are still waiting for them to sort us onto interest only!!

My husband has tried to get a job in his field (unfortunately its construction) but so far to no avail. Which is why he is trying to pick up what he can on the tools.

But it is the constant pressure- family have been great but we cannot be sustained this way for much longer. I think even if we dropped the house to £300K we wouldn't have any takers in the current climate.

Because we have a combination of joint and single debts in our names I just don't know what is our best wat forward. My husband wants to leave the country and start afresh. I definitely don't want to burn our bridges and want to clear this mess up as best I can.

amazing1

Do you know, we're not bad people. Our problem is for too long we worried about ensuring the mortgages of our 15 staff were paid- instead of looking after ourselves. Always thinking things would get better (because often they had). We traded for several years and weren't 'fly by nights'. All our staff were paid considerable redundancy (which they deserved) yet we have been left with nothing.
I never claimed a benefit in my life- even though I have paid over £35,000 in childcare in the last 8 years and never claimed for any sort of credit.

I've always worked, I'm university educated and I am in this mess. I just don't know how I got here. Took risks and they didn't pay off, I guess.

GeorgeUK

Council tax............................. 180
If paying over 10 months, can you ask to pay it over 12?

Electricity............................. 100
Gas..................................... 50
Have a look at the comparison sites to see if you can get a better deal. Make sure not to leave anything on standby.

Telephone (land line)................... 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Nothing for these?

Groceries etc. ......................... 400
Have a look at the oldstyle board for meal plans. Have you tried moving down a brand (shops own)?

There's some useful info from the Nationaldebtline site on HP agreements and voluntary termination.
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=16_how_to_deal_with_hire_purchase_debt#6
You can hand the car back at any time and only be liable for 50% of the original cost.

How much would you gain by being on interest only, and how much would the repayments to the business overdraft be? Is this interest free?

amazing1

Thanks GeorgeUK-

To be honest the energy suppliers I need to negotiate with. We moved into our property just over a year ago and we have been living on estimated readings. I am bang up to date with the gas but have £1,300 owing on the electric:eek:!

If the mortgage went onto interest only we could prob save about £400-£450 mth which we had offered the bank to take as payment towards the overdraft. They have not mentioned charging us any interest (yet).

I didn't realise you could hand the car back at any time and only be made to pay half the original cost. However, there is negative equity from when I took the agreement out on mine so I think I would still have a shortfall of a few thousand pounds. Also, I do use the car for work and collecting the kids etc.

The second car has been on the drive but if my husband gets some regular work then I could tax it for him to use to get around.

And that to be fair, is the whole point I need my husband in regular work. I've quickly read some on the Debt Management Plan info- but I am assuming for that route we will need my husband to have a stable income to make up my income?

Would they entertain him being self-employed- I am sure he could pull in at least £1,000/mth? The silly thing is- on a good job he could earn a significant sum quickly but its just so unreliable a) getting paid on time and b) having the work come in consistently.

milliemonster

Amazing, don't be so hard on yourself, being in this mess doesn't make you bad people, you have just been incredibly unlucky and there are thousands more that are in your shoes or have been.

Your groceries can definitely be cut down, how many are there in your family?, I used to (shamefully) spend over £600 a month on groceries (and extra bits) but have got that down to around £200 now for four of us

However, this isn't going to make much inroads into balancing the books so to speak.

You need to speak to CCCS TODAY, your priority debt is the house and secured loan, everything else you need to speak to each of your creditors and make reduced payments as you clearly are going to go under pretty quickly with a deficit of almost £2k each month

Although you aren't making repayments on the business overdraft at present, are you sure they aren't adding interest to the £15k you owe on this?, because your overdraft is separate from your mortgage I would still pursue going interest only for the time being and making token payments on the overdraft.

I hear what you are saying about your house but you are clearly not going to sell it at its current value, you have to do something.

I do think CCCS may suggest going down the BR route, so be prepared for this, this is because looking at your SOA you do not have enough disposable income (not taking into account anything your husband earns) to cover your essentials before debt repayments. This would mean potentially losing your home anyway because of the equity you have, so you have a chance now before it gets this far to speak to your estate agent and get their advice on pricing your house for a super quick sale, I think your options are rapidly running out

I am really feeling for you

milliemonster

Can your family help out with childcare to save you £120 a month? esp if your husband is not working much at the moment? have you claimed for your mortgage interest benefit payments?, I'm not sure if you could be entitled to this but it is worth a shot

To do a DMP you would need some disposable income after all your essentials to offer creditors, on your current SOA you don't have this, unless your husband is earning regularly I don't see how you could include his earnings into this either

GeorgeUK

I believe CCCS have a department that deals with self employed. You will still need to make a few adjustments to the expenditure as even the £1000pm does not cover everything and you will need some money left over to pay towards your creditors. You can contact them just for advice if you don't want to go down the DMP route right now.

Have you looked at possibly getting the train or bus for getting to work? Then you could still have 1 car available if hubby has work. If you miss payments and the car finance people decide to reposess, you would be liable for the full amount - not 50%.