a little help please - firstly...

JGWT8M

Hi, here's a brief rundown of my situation:

I owe £42500 approx. on cards and an overdraft.
I am self employed and my business is *profitable.
I have stock worth approx £12000 (need to do a proper calc there).
My monthly outgoings are approx £850 to live and provide for my family, the rest of what I earn goes to the credit card companies, I usually earn between £1200 and £2000 a month excluding working tax credit which is worth £227.80 a month.

*Profitable as in it gives me enough to live and pay the cc's min+ a bit more each month but not much else.

Everything I pay to them only covers their dam fees and nothing is going towards paying off the debt, exactly as they want it, but this really starting to get me down - I tried to cancel the payment protection insurance which is costing £300 a month but the miserable girl on the end of the phone said it would probably result in the cc company recalling the whole debt, is that right?

I am presently prepearing a full SoA so that will follow.

As far as I can see, I have three options:

1) Bankrupcy
2) try and negotiate an IVA, but I fear this may be difficult because I'm self-employed (????)
3) continue as I am and hope the industry I'm in picks up over the summer.
(very volatile, one month great, next crap)

My initial questions are (and this does assume a lot):

If I go for an IVA, what will happen to the equipment I need to work? If they make me sell it to put into the IVA, then it's pointless me doing an IVA as without the equipment, I can't work - what's the situation on this?

More seriously, if I go for bankrupcy, how will that affect my wife and son, my son has money in his saving's account that has been given to him by family (NOT ME!), can they touch this (my wife has nothing in her account other than CTC)?

---

The only assets I have are the equipment I use for work, a plasma tv which is 5 years old and worth £200 now and an xbox, my wife owns the car and the rest of the stuff we have has been given to us by family including everything in the kitchen - that another thing, how the hell do we prove (assuming bankrupcy again) that the TV in the bedroom or the fridge freezer was an xmas present and not overspending on my part?

I have not contacted any of the debt councilling services yet but will do once I've decided what I want to do in my head, we are moving this month to somewhere a lot cheaper (accounted for above - I've read through the tennancy agreement - it's council - and it says nothing about bankrupcy forefiting etc. so hopefully that is good) so at the end of the month things will be easier and more money can be sent to the card companies although i really loath doing it because it doesn't pay off the debt.

My lightbulb moment was a couple months ago but I've been too ill until now to do anything constructive about it, I've been ill once in my life until last year and since then I'm ill more than I'm healthy and my wife (who is aware of the situation) says it's all to do with the debt and the sooner I sort it the better I'll be.

Sorry to go on but as I type more things are jumping into my head, hope someone can point me in the right direction, my head says get it over and done with a declare BC, but my heart says i love what I do and it give me the flexibility to be a real dad so bear with it/go for IVA.

I presonally have no interest in how this will affect my credit file, I never want credit again and cut up all my card months ago, if I need to pay with plastic I use the debit card which is on the account that has an overdraft on it and my OH and I have talked at length and we are both happy to live where we are moving to for the next 50 years

hope someone can help...

p.s. I got into this mess because a supplier fitted me up with over-priced stock and it was worth a lot less than I paid, he wouldn't help and did a runner so I shifted loads of stuff onto cards while I got myself "sorted" but when it all got sorted the debt on the cards is so high it will take me years to pay off.

Edit: OMG, sorry about the long post...

Jule$

Hi JGWT8M,
You have come to the right place and I'm sure before the day is out you will have had loads of help and advice from people here especially after you post your soa.

I would advise that you contact either the
CCCS -
or
Payplan - http://www.payplan.co.uk

these are both free to use Debt Management Companies and they will advise you as to which senario is best for your situation.

Bankrupcy I would say is your last resort as you cannot run a business once banckrupt and an IVA although less severe than bankrupcy is very inflexible in that if you don't keep up the repayments then they have to make you bankrupt so I would say your best bet is Debt Management which can be done through the 2 companies named above.

Please give one of them a ring and see what they say. You can get their advice and they really do know what they are talking about. I owed a lot more than you and I didn't have to go bankrupt they put me on a debt management plan and I can honestly say it was the best thing I could have done, I can finally breathe and am not worrying everytime the phone rings or the postie knocks!!!

If the PPI is on credit cards then I see no reason why they won't cancel it, ring again and tell them you don't need it. You are self employed and it probably is useless to you anyway.

I've got to go to work now but Good Luck with this all. It will work out and I'm sure you will get more advice here as they day goes on.

Jules

pineapple_beach

Hi there
There is no doubt that being heavily in debt can make you ill, and it is important that you take some positive steps to start to resolve this, it will feel like a great weight has been listed. I agree with Jules to call CCCS or payplan and get some unbiased advice, from them as well as on here.
In the sense of starting to claw yourself back, you need to earn more as a family (can your OH work every little helps, sell any unwanted stuff around on ebay/amazon/boot fair). You also need to try to budget to spend as little as possible, check out the OS Boards and other threads for ideas.If you post yuor full statement of affairs with waht you spend on bills etc, the others here will give you loads of things to think about. Therefore any money other than what needs to pay bills/food can go towards repying the debt.
Good luck. Most of us have had those early dark days, and the only benefit of living through them is that you want to get out of it and never want to get back into that situation again...
p_b

CLAPTON

A few things
Post the SoA when your ready
contact Payplan or CCCS and get their advice
Are you self employed or do ypou own the company? I ask because Bankrupcy doesnot prevent you being self employed although you wont be able to get credit.
No, they won't take the tools of your trade because you will have no income which is to no ones advantage. Its unlikely anyone would be interested in a five year old plasma screen, normal household goods are ok too. If the car is essential for work that too is ok unless its expensive when they can make you sell but you would be allowed to buy a cheaper model (£2000 seems to be the ball park figure). I've never heard of the kids savings being touched unless you have recently transferred a few thousand into their a/cs
If you have PPI on any debts you have probably been miss sold as most PPI dont pay out to self employed , phone and then write if you get no where. On CC cancelling PPI should simply be a phone call.

tyllwyd

In terms of getting more money in for the family, is your wife in a situation where she could get a job of any kind to bring in a bit extra? Would there be a possiblity that she could join you in your business to help expand it?

THE_LONE_RANGER_4

hi,post soa, contact cccs,cab, dont go bankcrupt for the ammount you owe daunting but it can be done ,people on here will help you im sure the debts must now take 2nd place priority bills must be payed,you will have to deal with the bills but only what you can afford as for cancelling payment protection cancell it the girls talking rubbish the cc cant force you to take insurance protection if you dont want it ,your health is more inportant debts that are unsecured second place you must put that in your head in order to deal with what is going to happen over the next 12months as you try and sort a repayment programme..you will encounter some right unpleasant charactors but ignore them knuckle down and you will soon get your life back with no worries reguards andrew

JGWT8M

many thanks for the feedback, very much appreciated. I'll contact CCCS asap and get onto the cards to cancel the protection insurance (and I'll make sure it's done this time).

Regarding this, I have a question for Clapton (I am self-employed, not limited or anything like that), if I was indeed mis-sold the insurance (I was called several months AFTER the cards were issued) am I entitled to a return on the policy payments?

Another open question I have, is that I've seen/read is about the interest rates being reduced or frozen and a smaller monthly payment negotiated - is this something that is only applicable to IVA's or is it something to do with the debt management plan Jule$ talked about?

Thanks all.

(SoA to follow tomorrow)