Where to from here?

Corrianderuk

Hi Everyone
I have been reading the forum pages for a while but am only now feeling brave enough to ask for advice. I live with my partner and stepson and currently we are drowning in debt. We are self employed market traders and our outgoings well exceed our income but its all way out of control now. I got divorced 2 years ago and everything spiralled from there really.

Outgoings
Rent £775 per month tied into lease for another 3 months but the rent is about normal for a small 2 bed place in this area. We are on council list but there is a long wait
Council Tax £140 per month
Gas, £250 outstanding bill waiting to be paid
Electric £150 due now
Water £30 per month
Diesel £250 per month on average
Food £200 per month
Telephone bill of £150 due now
Broadband £30 per month
House Insurance £7.50 per month
Car Insurance £23.00 per month
HSBC personal loan of £9,000 @ £205 per month about to go into default on 27th Feb
HSBC business loan £2,500 @ £155 per month about to go into default on 27th Feb
Capital One credit card balance of £1,500 in default I did have an arrangement through the debt collection agency but when I couldn’t make a payment last month it went in default
Barclay Card credit card balance of £1,000 in default same as the Capital One
Citi Card credit card balance £1,000 in default same as above
Car tax is also due this month
We also owe £3,500 to suppliers which we pay at £250 per month


Income is earnings of approx £1,200 a month it does vary depending how busy the markets are should inrease from Easter onwards , I also get £150 per month from my daughter towards diesel as I take her to and from work .

We can’t switch any service providers for the gas, electric, or phone as they are tied into our lease
Diesel is high but we live in a rural area and the public transport is dire so we have to take my stepson back and forth to college etc

I am at a loss as to know what to do the bank has washed its hands of the whole thing I spoke to them a week ago and was told there is nothing they can do.

Any ideas where I go from here? I have been told if one person issues a ccj against me I can go for an admin order and the courts will then tell everyone what I have to pay them is this correct? The calls from the debt collection agencies now go on all day every day and Vie got so fed up with repeating everything over and over again I now say just stop talking about taking me to court and DO IT ! It’s making me and my partner ill.

Would I be better to go to one of the debt management companies? And if I did would they take on the business loan and debts as well as the personal or would they be excluded? If I did would the phone calls chasing money stop?

Should add both bank accounts are overdrawn personal by £400 and business by £150.and getting calls daily from bank call centre asking when it going to be back under overdraft limit

Any ideas gratefully welcomed

Jarlawuk

You can save money on your phone bill by changing tariff if its a mobile, changing option package if its a landline.

If your broadband has been 12 months then consider changing to a different provider - can get broadband for £18 or less for 512k so £30 is a bit on the much side.

If your combined income is £1200 a month you should be eligible for council tax benefit. Best thing to do is pop down to the C.A.B they'd be able to advise you more on that.

Also speak to your credit card companies, they would rather you paid less back over a longer time rather than nothing at all. To be fair if you choose to do minimum payment of 2% each month you might not have to default on the debt?

If you can then avoid any battering to your credit rating perhaps you could get a 0% finance card or a long term low rate card and move as much of the 3 card balances to it as possible.

Louise1521

I would have thought that you'd be entitlted to some working tax credits aswell.

Jule$

Hi Corrianderuk,
You have come to the right place for help. I'm sure some of the more experienced MSE'ers will be along later.
I would advise giving either CCCS or Payplan a call, you have nothing to lose. I have a Debt Management Plan with the CCCS and I must say they have been life savers, they are really nice and will put you at your ease and as they are a charity its a free service, as is Payplan.
http://www.cccs.co.uk
http://www.payplan.com/
Check out their websites and give one of them a call 1st thing tomorrow, they will advise you whether they can take on business debts as well.
I would have thought that they would, I may be wrong, but considering that although the business owes the money, you are the business so it is you that actually owes it, if you get my drift.
You can add the over drafts into the DMP too.
The main thing is don't panic, there are many here who have been where you are and have come out the other side, me included.
Good Luck

Jules

ffs

Jule$ wrote:

You can add the over drafts into the DMP too.

It's not optional. You are obliged to inform the organisation arranging the DMP about every debt you have. They will advise you to stop using the account with the overdraft and open a Basic Bank Account instead.

Jule$

I had the option as to add my accounts in or not.
The CCCS where aware of the over drafts as I told them about them, but they said I didn't have to add them in if I thought I could manage without doing so, so I didn't.
One had a £500 over draft and the other £100 at the time.
I didn't have any other debts with my bank other than the o/d so that was another reason I held onto them and they are now both clear.

inmypocketnottheirs

I would guess that your bank account and credit card balances may include a sizeable amount of charges late payment fees, returned items, exceeding agreed limits etc. There is a lot of information about these charges on the site, but to save reading through hundreds of postings visit two useful sites https://www.bankchargeshell.co.uk and https://www.bankactiongroup.com where you can see how to get these monies refunded. You can go back upto six years.

Bloke_with_a_simple_life

NOt much to say on this.. but ...

If appears that your business and personal bank accounts and accounting are mixed together into one. I presume (may be incorrectly) that your do not have a seperate business and personale bank account? DO you run seperate book keeping for your personal and business? You must try to seperate them.

Therefore, make sure that you make this clear with the people you seek advice form so that what ever happens you are not prevented from running your business.

IS the £1200 monthly income straight turnover from the business or after the business costs (ie. cost of goods etc? I presume too that the £3500 you owe suppliers is increasing too.

Unfortunately, I was wondering whether you have to consider looking for alternative emplyment? It may be hard to contempalte, but if you costs of business are greater than the the income - you are not earning anything. IF you lose money in the winter months, consider doing other work in this time so that you do have a positive income stream over these period.

Good luck.

Corrianderuk

We do have seperate business and personal accounts , the business is fairly stable although by the nature of it this is a very slow time but should pick up again within next month .Evereything we have is kept strictly seperate for business and personal.
The 1200 is after business expenses and no the cost to the suppliers is not increasing , I took the desision to take the business back to its roots and now 60% of stock is handcrafted as I already had the stuff to do this it has cut costs alot and hasnt really affected turnover in fact it might be slightly up .
We were getting working tax credits but then they decided they had over paid us and it was all stopped pending their decision as we had to write to them and tell them it was their mistake so now we are waiting hear if we have to repay the money . As for help with Council tax and housing yeh we tried that and got told we were just over the thresh hold for getting some help at the moment they are re assessing us as well should hear in the next week.
The phone bill is for quarterly payments broadband hasnt been on contract for a year yet but BT are in proccess of refunding some of our payments as they havent been providing the level of service we paid for once again this is ongoing dispute

There is no way any company wil give me a credit card at this time my credit is shot to pieces . 2 of the credit cards I owe are fairly good and accept that I can only afford a small amount but the Capital One Card has been picked up by Newmans Debt Collection Agency and they are hounding us maybe 30 calls a day now I wont talk to them on the phone tell them to put everything in writing , they wont accept the small payment and insist on a minimum of £120 amonth one of the other credit card companies told me to pay a small amount to them wether they agree or not so thats what I am doing .And yes alot of the outstanding amounts are late charges etc , at moment Im not in a position to do the minimum payment on the cards I have, but am hoping to pay something to them in next week .But as I have the rent to find in the next week there is no way I will able to bring the loan payments up to date on 27th especially with the accounts being well over drawn . I think I once opened a Nat West Step account but it was only used for a couple of deposits and it was before my divorce and move I have no idea where any of the paperwork for it is , I will have to go into the branch see if the account is still open .

We both have been job hunting but as it is a rural area there is nothing available at present we are hoping when the tourist season kicks in something might come up part time we thought that as neither of us are trained for any career we would be on minimum wage so would we be any better off than we are now if we worked full time hence looking for part time to run along side business?

ffs

Jule$ wrote:

I had the option as to add my accounts in or not.
The CCCS where aware of the over drafts as I told them about them, but they said I didn't have to add them in if I thought I could manage without doing so, so I didn't.
One had a £500 over draft and the other £100 at the time.
I didn't have any other debts with my bank other than the o/d so that was another reason I held onto them and they are now both clear.

Thanks for correcting me. I think the key is to be totallty open with the debt counsellor and let them advise accordingly, rather than decide oneself which debts should be included in the DMP. There are plenty of tales on MSE of people who have kept certain debts outside their DMP and have then been unable to meet these commitments, and then had their DMP fail.

jitsuguy

Hi ya,

Have you thought about trading on eBay as well, handcrafts generally do well on eBay especially if you are willing to trade with Americans - this could be a good second income - just don't forget to watch out for tax as the Taxman is now watching eBay carefully!

Nath.