I think there's only one option...

fc123

sieve wrote: »

I was told that I don't need to account that much for tax as £400 should be plenty based on how I use my home and what I can offset, etc...

As I understand it, you go onto a nil tax code post BR....but again, this is stuff I need to research more...unless anyone knows the answer on here?
PAYE tax codes and sole trader....worked out in a different way.

dvs

Hi sieve

I'm just wondering about your mortgage. £10,000 seems like a lot for an early redemption on the balance of your mortgage at £160,000. Usually it's around six months interest (rather than six months payments). I assume your mortgage is a repayment rather than interest only - or are on very high interest rate?

You should check this out as it may have an effect on your bankruptcy.

With regards to the IVA vs Bankruptcy issue, I personally think bankruptcy is the better option based on what you have said. You should get professional advice though!

sieve

dvs wrote: »

Hi sieve

I'm just wondering about your mortgage. £10,000 seems like a lot for an early redemption on the balance of your mortgage at £160,000. Usually it's around six months interest (rather than six months payments). I assume your mortgage is a repayment rather than interest only - or are on very high interest rate?

You should check this out as it may have an effect on your bankruptcy.

With regards to the IVA vs Bankruptcy issue, I personally think bankruptcy is the better option based on what you have said. You should get professional advice though!

Thanks dvs. Yes the redemption penalty is massive - non main-stream lender (GE money) and it's a repayment mortgage on about 6.5% interest. They sting you for a year's interest if you end it before the fix ends - got another year to go.

dvs

Hi sieve, I'm not sure where you stand with regards to repayment mortgages but I'm sure someone else on here will...

Does anyone know what the situation is with repayment mortgages and working out your income and expenditure? Will the OR insist that the mortgage is an interest only one or will they allow you to make capital repayments ?

JCS1

Any sales invoices that you have raised, but are not paid as at date of BR, will be collected by the OR. They will usually appoint agents (same as IPA people) to contact your customers direct and get the money paid to them.

You may need to time your invoices/credit control in the run up.

sieve

JCS1 wrote: »

Any sales invoices that you have raised, but are not paid as at date of BR, will be collected by the OR. They will usually appoint agents (same as IPA people) to contact your customers direct and get the money paid to them.

You may need to time your invoices/credit control in the run up.

That's a brilliant tip, thanks. I'll make sure nothing is outstanding on the BR date then - the last thing I want is any of my customers getting a call from the OR on my behalf as then they'd know I was BR!

fc123

dvs wrote: »

Hi sieve, I'm not sure where you stand with regards to repayment mortgages but I'm sure someone else on here will...

Does anyone know what the situation is with repayment mortgages and working out your income and expenditure? Will the OR insist that the mortgage is an interest only one or will they allow you to make capital repayments ?

AFAIA, they calculate it on interest only. Your lender must agree though.

Sieves mortgage sounds high so could be repayment.

It depends on the lender. I will be finding out all about mortgaes this Friday coming.

ETA; derrr...he wrote it is repayment

Merry_Gentry

sieve wrote: »

It's weird that. If writing everything off, it sounds like you have more freedom than if you attempt to pay things back. Where's the logic in that? Surely the creditors would rather get something back rather than nothing?

Very often they would, but very often creditors refuse to consider any offers to pay the money back at a reduced rate. It's one of the things that makes personal bankruptcy so galling for many people - if creditors were more humane, prepared to wait a bit, allowed a bit of leeway - some people wouldn't have to go bankrupt at all.

That is not to say that creditors are to blame - just that some of them seem to shoot themselves in the foot with regard to their occasional hard-a$$ed attitude.

fc123

sieve wrote: »

That's a brilliant tip, thanks. I'll make sure nothing is outstanding on the BR date then - the last thing I want is any of my customers getting a call from the OR on my behalf as then they'd know I was BR!

We are carrying on as normal, paying for stock, trading, paying monies that we owe for the time being.

I have learnt that IF BR is the route to go down, it needs to be planned to minimise disruption to your business....as that is how you are going to earn your living and go forward afterwards.

fc123

Merry_Gentry wrote: »

Very often they would, but very often creditors refuse to consider any offers to pay the money back at a reduced rate. It's one of the things that makes personal bankruptcy so galling for many people - if creditors were more humane, prepared to wait a bit, allowed a bit of leeway - some people wouldn't have to go bankrupt at all.

That is not to say that creditors are to blame - just that some of them seem to shoot themselves in the foot with regard to their occasional hard-a$$ed attitude.

It's spite and avarice.

In a business situation, it also can become a game of shove, shove, shove to see who breaks first.

As I said before, my situation is very different from many contributors on this board.