To BR or not to BR?

Dunpayin

Hello All. I've been reading the forum for a few weeks and it's definitely had the best advice I've found so far. I'm looking for some help with making the decision, or from anyone in a similar position.. This is my first posting, so here goes...

I started my own small Landscaping business 3 years with only about £1'500 debt to my name. It has been a rocky ride, but it has finally levelled out and is ticking over OK, give or take the odd pending recession. Over this time I have gathered about £15K of unsecured debt, made up of loans and credit cards. My monthly budget is about £150 deficit, so not only am I only making minimum repayments (maximum interest), but the juggling act of direct debits, maxed overdrafts and cards plus late payment fees seems never ending. My bank offered me a consolidation loan at such a high rate that I would end up paying the whole debt off twice.

A couple of months ago I went to local personal Debt Charity, who advised a DMP. Next I visited an Insolvency Agent, who advised BR. After that, I did a budget with Payplan, and they advised a DMP. Various phone helplines were equally confusing. The DMP's seem like such a long term solution, while BR is instant and doesn't appear to have any downsides for my particular situation. Then I found this forum, and BR seems like the best option. What advantage would there be for me to do a DMP over BR?

I am a tenant, with no savings or assets, bar an old work van and tools, which I understand I will be able to hang onto. My landlady is fine about BR. I am a sole trader, and understand my business can carry on as normal. I would like to set up a website, but was told the OR might frown on such speculative investments post BR. I have no plans to buy a property, but do intend to set up a land co-op. The Co-op Development Agency assured me a BR credit rating would not be an issue, especially if I am technically a member rather than a director of the co-op. However, a DMP would seriously hamper my ability to be involved in such a project because of the repayment commitments.

I am thoroughly sick of being in debt, but totally acknowledge that it's my own bad money management that got me here. I also feel that I've learnt my lesson, but now have so much debt I'll never get out of it. It's nowhere near as much as alot of people's, but it's consuming me every month and I'm tired of feeling trapped and desperate.

My BR date is November 5th, so if I go for it there'll be a few red letters to add to the bonfire. Any advice would be really appreciated.

So_Sad_Angel

Hi Dunpayin...welcome along.

I know it can be confusing & I`m sure you know this but have you spoken to CCCS/Nat Debtline (Businessline) or CAB. You need to be sure...really sure that this is the route for you. If there is any way that you can afford a DMP then the court may refuse your petition.

Perhaps post your SOA so we can see a fuller picture of the figures.

Meanwhile good to see you & well done for wanting to get this sorted.

Angiex

blind-as-a-bat_2

Dunpayin wrote: »

I would like to set up a website, but was told the OR might frown on such speculative investments post BR. .

How much where you planning to spend on a web site? You need to advertise but a bit of homework and you can do DIY it for less than a tenner, and half that a month for a basic website;)

As for the rest of your post, i think you have done your homework, I must say though its odd an IP has agreed with BR but the DC said DMP who was the local personal Debt Charity?

Dunpayin

Hi BAAB

The DC was only looking at the personal debts, without including business debts. The IP was looking at the whole picture. Both the IP and Payplan said said my Income was not matching my Expenditure. I guess Payplan were suggesting a DMP because that would involve reduced managed monthly repayments, and therefore theoretically within my budget.

Thanks for replying!

Dunpayin

Hi All

Just one question this time.
Does much actually change once you are discharged? Since I am self employed as a sole trader, and am not interested in loans or credit cards (anymore:(), does it just mean the OR is less on your case till the 36 month IPA is up?

Dunpayin

Hi Everyone

I'd really appreciate anyone checking these numbers. I had another thread going, but am just using this one now.


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 545
Partners monthly income after tax....... 0
Benefits................................ 210
Other income............................ 0
Total monthly income.................... 755

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 230
Management charge (leasehold property).. 0
Council tax............................. 26
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 4
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 40
Petrol/diesel........................... 35
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Total monthly expenses.................. 710

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 1000
Total Assets............................ 2300

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Loans..........................5470......0.........0
C.Cards & Overdrafts...........9275......0.........0
Builders Merchants.............650.......0.........0
Total unsecured debts..........15395.....0.........-

Monthly Budget Summary
Total monthly income.................... 755
Expenses (including secured debts)....... 710
Available for debt repayments........... 45
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 45

Personal Balance Sheet Summary
Total assets (things you own)........... 2,300
Total Secured debt...................... -0
Total Unsecured debt.................... -15,395
Net Assets.............................. -13,095

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

I am single, living in a rented house with two other housemates.


BUSINESS OVERHEADS:


TOOL REPAIRS & REPLACEMENTS ..... 50
VAN INSURANCE .................................... 36
BUSINESS INSURANCE........................... 37
GARAGE RENT ..........................................57
MOBILE PHONE ....................................... 80
ADVERTISING .........................................130
VEHICLE COSTS .....................................205 ...............£595



ANNUAL VEHICLE COSTS BREAKDOWN:


MOT ........................................................300
REPAIRS ................................................ 200
TAX .........................................................180
FUEL .......................................................600
VEHICLE PURCHASE ...........................1200......... £2480 (£205 per month)

The vehicle purchase figure comes from the average I have spent per year, over the last 3 years, on buying vans (first £1000, second £2000).

purple-pear

Hi I Am New To Forums Can I Just Ask Have U Actually Been Making The Payments Or Have U Stopped?

tigerfeet2006

purple-pear wrote: »

Hi I Am New To Forums Can I Just Ask Have U Actually Been Making The Payments Or Have U Stopped?

Hi and welcome to the forum.

If you have taken advice from one of the debt charities in my sig and they have advised that BR is your only option and you are going BR soon then you stop paying your creditors and save the money for your BR fees.

tigerfeet2006

Dunpayin wrote: »

Hi Everyone

I'd really appreciate anyone checking these numbers. I had another thread going, but am just using this one now.


Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 545
Partners monthly income after tax....... 0
Benefits................................ 210
Other income............................ 0
Total monthly income.................... 755

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 230
Management charge (leasehold property).. 0
Council tax............................. 26
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 4
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 40 could up to £50 if you need.
Petrol/diesel........................... 35
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 10 what is this?
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 0 You should get some
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10 OR may cut but leave it.
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Total monthly expenses.................. 710

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 1000
Total Assets............................ 2300

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Loans..........................5470......0.........0
C.Cards & Overdrafts...........9275......0.........0
Builders Merchants.............650.......0.........0
Total unsecured debts..........15395.....0.........-

Monthly Budget Summary
Total monthly income.................... 755
Expenses (including secured debts)....... 710
Available for debt repayments........... 45
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 45

Personal Balance Sheet Summary
Total assets (things you own)........... 2,300
Total Secured debt...................... -0
Total Unsecured debt.................... -15,395
Net Assets.............................. -13,095

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

I am single, living in a rented house with two other housemates.


BUSINESS OVERHEADS:


TOOL REPAIRS & REPLACEMENTS ..... 50
VAN INSURANCE .................................... 36
BUSINESS INSURANCE........................... 37
GARAGE RENT ..........................................57
MOBILE PHONE ....................................... 80
ADVERTISING .........................................130
VEHICLE COSTS .....................................205 ...............£595



ANNUAL VEHICLE COSTS BREAKDOWN:


MOT ........................................................300
REPAIRS ................................................ 200
TAX .........................................................180
FUEL .......................................................600
VEHICLE PURCHASE ...........................1200......... £2480 (£205 per month)

The vehicle purchase figure comes from the average I have spent per year, over the last 3 years, on buying vans (first £1000, second £2000).

You're getting there.

Dunpayin

Hi Everyone

Here's my latest SOA, with changes thanks to tigerfeet. I have no contents insurance, and am worried it will look weird if I suddenly start a policy 3 days before BR hearing.

I have a question which is a little complicated, but here goes anyway...

Back in March 2008 my work van was written off due to a failed MOT. I bought a replacement (on a credit card:o) for £2'000, from a local used commercial van place. Two months later the DVLA contacted me and, to cut a long story short, it turned out the van had been registered as destroyed 14 months before I bought it. Inspite of it having a new MOT, tax, insurance (and a respray!), they said there was nothing could be done, and when it comes round for retaxing (Feb 2009) I would have to scrap it. They won't issue a logbook, so I am not the registered keeper, and so can't sell it either. They also said, that had this been flagged up within 12 months of it being registered destroyed, they could have basically pressed a button and changed it's status. The computer really was just saying 'no'!

The chap who sold it to me said he didn't know it was dodgy. I have no way of telling if he's trying to pull a fast one and, ultimately, it's irrelevant. So, I contacted Trading Standards and the FSB and they said that he was guilty of some 1970's trade description act regarding sale of crappy stuff. I wrote to the van chap, and told him if he didn't sort it out (and reply within 10 days), I would approach the local press, and that the case was referenced with TSO and FSB and that me and my (fictional) solicitor would sue.

He got in touch the next day.

I ended up agreeing to a part exchange, to avoid the grief of going through the courts, and having to find another van. All seemed well, as when I originally bought the van, there where several other vans of equivalent price and condition.

That was about 6 months ago.

Turns out that economic slow downs ain't too good for used vehicle salesmen. Everyone wants cheap vans. No one feels like they have the spare cash to invest in upgrading, so there's no fresh inflow of older ones, and the forecourt becomes full of posh expensive ones.

So I still have my kind of illegal van (that the police are getting bored of pulling over), with only 3.5 months left of it being drivable, it's value dropping every month, and bankruptcy hearing on Wednesday 5th November. If you've got this far, then thanks for sticking with me, I'm almost done.

THE QUESTION IS: what do I do about the cash I'll need for the part exchange? It could be as much as £800, anytime between now and February. Or do I take it to court? How would the OR view me sitting on a big lump of cash, waiting for this van transaction? Will I be allowed to borrow the money from friends? If I earn enough to 'save' for it :rolleyes:, will the OR just take that off me?

Basically, I can't run my business without a van. Through no fault of my own I have to do a part exchange sometime soon, and I'm due for BR this week. I could postpone the hearing (again), which will mean more hassle from banks etc re defaults etc, while continuing to wait for the right van to turn up.

If anyone has any answers to this it would be great. It's been such a palava for so long (and believe me, this is the abridged version ), that I'm finding it a bit difficult to get my head round...

Right, that's it for now. On with BR form.

Thanks All **



Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 545
Partners monthly income after tax....... 0
Benefits................................ 210
Other income............................ 0
Total monthly income.................... 755

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 230
Management charge (leasehold property).. 0
Council tax............................. 26
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 4
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 35
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 30
Emergency fund.......................... 0
Total monthly expenses.................. 710

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1300
Other assets............................ 1000
Total Assets............................ 2300

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly.. .APR
Loans..........................5470......0........ .0
C.Cards & Overdrafts...........9275......0.........0
Builders Merchants.............650.......0.........0
Total unsecured debts..........15395.....0.........-

Monthly Budget Summary
Total monthly income.................... 755
Expenses (including secured debts)....... 710
Available for debt repayments........... 45
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 45

Personal Balance Sheet Summary
Total assets (things you own)........... 2,300
Total Secured debt...................... -0
Total Unsecured debt.................... -15,395
Net Assets.............................. -13,095

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

I am single, living in a rented house with two other housemates.


BUSINESS OVERHEADS:


TOOL REPAIRS & REPLACEMENTS ..... 50
VAN INSURANCE .................................... 36
BUSINESS INSURANCE........................... 37
GARAGE RENT ..........................................57
MOBILE PHONE ....................................... 80
ADVERTISING .........................................130
VEHICLE COSTS .....................................205 ...............£595



ANNUAL VEHICLE COSTS BREAKDOWN:


MOT .................................................. ......300
REPAIRS ................................................ 200
TAX .................................................. .......180
FUEL .................................................. .....600
VEHICLE PURCHASE ...........................1200......... £2480 (£205 per month)

The vehicle purchase figure comes from the average I have spent per year, over the last 3 years, on buying vans (first £1000, second £2000).

Dunpayin

Hi Everyone.

Have been doing the form since 8.30 this morning. Some day of rest! What do you think of this statement for the BR form?
Thanks to OhDear for your posting, I plagiarised you a bit, hope you don't mind...

When I started my Landscaping business 3 years ago as a Sole Trader, I borrowed quite heavily to start up, and had problems with jobs over running for the first couple of years, which ran up more debt.
Since then I have juggled debt to pay off debt, but due to several problems (time off due to injury, van failing MOT, etc) and living costs increasing, the total amount kept going up.
I am now totally over committed on credit cards and loans, with no hope of paying them off. I have had my head in the sand for a long time, but now realise I cannot continue this way.
Following advice from an Insolvency Practitioner, I am filing for Bankruptcy. I plan to continue running my business, and move into a housing co-op.
I have kept £... in cash to cover the next months outgoings, and opened a Lloyds TSB account for post bankruptcy.