Only Dull Girls Write Diaries...Myth Broken!

Rainy_2

I wish I were a dull girl with a regular income, earning more than I spend a month, no debts, a little saved away for a rainy day. But my debts and circumstances are far from dull!

My main reasons for this diary are to help me face up to my current situation, drum up some positivity to get me through and also to just get it off my chest, as I have not shared any of this with anyone, apart from those directly involved and independent advisors. (This is through my attempts to protect my nearest and dearest as the pressure of them being worried I fear would tip me over the edge)

A deep breath while I reel off the figures:

Unsecured Loans:

1 £7873
2 £7465
3 £7600

Total £22,938

Credit Cards:

1 £3047
2 £3200
3 £2920
4 £2200
5 £1900

Total £13,267

Overdraft:

£10,000

Suppliers:

£15,066

Business Rates:

£1,800 OR £7,100 (see below)

Rent (for business premises):

£4,500 OR £31,500 (see below)

GRAND TOTAL £67,571 OR £99,871 :eek:

In addition to this, I owe my mum a lot after counting up all she has loaned, given, bought for me etc. This was done on advice from a financial advisor (free of course!) as the amount may be able to be used to name my mum as second charge on my house should bankruptcy be my only option.

A brief background to lead you into how I have landed in a desperate mess:

I became self employed by buying into a retail franchise in August 2007. I had some savings from an inheritence which I put into it with the rest of the funding provided from a business overdraft. The first few months were good, business built up well, I had an opportunity to expand so I took out loans to do so. One month of greatness and then THE CREDIT CRUNCH. Business declined rapidly (I sold luxury items that everyone gave up first when the crunch hit) and so I abused my decent credit rating and used numerous credit cards to pick up the business and personal bills. The business continued to make great losses. There was no money to pay back the loans, credit cards or suppliers. As I fell behind in payments, my days of being a credit card 'tart' were over, no new 0%'s to transfer to and my credit rating is lower than low. Losing money fast I made the heart wrenching decision to close.

Through ill-advice and naivity on my part, I had remained a sole trader, so obviously all the debts are mine.

I had to get out of the business quickly due to the huge losses so I have breached the lease contract. I still have 18 months to go which is why there are 2 figures above, the first being the payment owed to them up to when I left and the other being what I owe them to the end of the lease. The same for the business rates.

I sought advice as soon as possible and have corresponded with my creditors from the beginning (with a mixed bag of results)

The present situation:

I am seeking employment but so far in vain. I am still self employed doing a couple of freelance jobs but they barely equate to minimum wage. My partner lives with me and pays his way but he is also just on a minimum wage as an apprentice. I'll post an SOA in a little while.

Yesterday I received a statutory demand from a supplier which has shaken me up. I am teetering on the edge of bankruptcy now and in fear of losing my house, despite my best efforts to come to agreements with my creditors. I desperately want to pay them all back. I am not trying to get out of what I owe in any way. But my time is running out and they are getting impatient! I'm sure they've heard the line "once I'm back on my feet I can pay you back" many a time!

Sorry for the uber long post. I don't even know if it will be read! But I can see this as a large leap for me to be proud I'm tackling my debts rather than being ashamed by them! :T

boredofbeingathome

Hi Rainy, welcome to diary land.

Well done for facing up to your problems and it will be a slog, but as Martin says there is a solution for every problem.

Just a couple of things. I hope you are taking professional advice about your business and personal debts and please if not use one of the non fee paying debt advice companies for doing so.
Also you are not alone in this economic climate, so whilst it is all doom and gloom there will be hope along the line.

Good luck.

hypno06

Facing up to things is good - scary.....but good. For what its worth, my debt figures were about the same as yours (£100k) four or five years ago - I was self employed too and somehow.....I managed to struggle through, keeping a roof over our heads and making sure we all had food occasionally!

It is hard - whichever way you do it - struggle on, DMP, bankruptcy, etc, but you will get through it.

First things first - grab coffee/wine/chocolate biscuits and a pad of paper and a pen, and get writing everything down - do your SOA as we ask all newbies to do - even if you don't post it on here.....it is essential you know exactly what is coming in and going out.

Then go online and do the CCCS debt remedy - Bankruptcy may not be necessary. A DMP would be an option, and you can start by paying £1 token payments to all your creditors from now.....to show that you are not trying to avoid payment, just having a "period of adjustment" and need to pay less right now. If you can do a DMP, that would mean that you are able to make manageable payments, and hopefully charges and interest will be frozen.

Have a look on the DMP mutual supporters thread on here as well - they have all been where you are, and so will have all the answers (or at least most of them!).

As for keeping it from those close to you - yes, many of us are in the same boat.......now that my debt is not so scary (well, not to me, anyway - for some people, £26k would still be eyewatering!) I don't worry about people finding out, but when it was £100k, it was something that I couldn't possibly mention!

Keep posting in your diary - and on others....you are welcome on mine at any time!

Rant, vent, laugh......and you will get through this!

Rainy_2

Hi again,

Below is my SOA :eek:

There isn't much in the way of assets to put towards my debts, so if I do go bankrupt or someone makes me go bankrupt, I'm not sure exactly what they will get out of it.

The irony is that my cost of living is relatively low and if I do lose my house, my cost of living will soar as rents are much higher where I live than my mortgage repayments.

Household Information

Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 800
Partners monthly income after tax....... 0
Benefits................................ 200
Other income............................ 240
Total monthly income.................... 1240

Monthly Expense Details

Mortgage................................ 275
Secured/HP loan repayments.............. 100
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 75
Electricity............................. 22
Gas..................................... 20
Oil..................................... 0
Water rates............................. 22.5
Telephone (land line)................... 14
Mobile phone............................ 10
TV Licence.............................. 12
Satellite/Cable TV...................... 38
Internet Services....................... 0
Groceries etc. ......................... 155
Clothing................................ 10
Petrol/diesel........................... 200
Road tax................................ 15
Car Insurance........................... 25
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 2.5
Pet insurance/vet bills................. 55
Buildings insurance..................... 10
Contents insurance...................... 8
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 25
Haircuts................................ 0
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0

Total monthly expenses.................. 1139

Assets

Cash.................................... 0
House value (Gross)..................... 98000
Shares and bonds........................ 0
Car(s).................................. 900
Other assets............................ 0

Total Assets............................ 98900


Secured & HP Debts

Description....................Debt......Monthly...APR

Mortgage...................... 50000....(275)......3.5<
Mum............................45000....(100)......0.5
Total secured & HP debts...... 95000.....-.........-

Unsecured Debts

Description....................Debt......Monthly...APR

Personal Loans.................22938.....1318......14.5
Credit Cards...................13267.....355.......29
Overdraft......................10000.....0.........16
Business Rent..................31500.....0.........0
Business Rates.................7100......0.........0

Total unsecured debts..........84805.....1673......-

Monthly Budget Summary

Total monthly income.................... 1,240
Expenses (including HP & secured debts). 1,139
Available for debt repayments........... 101
Monthly UNsecured debt repayments....... 1,673
Amount short for making debt repayments. -1,572

Personal Balance Sheet Summary

Total assets (things you own)........... 98,900
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -84,805
Net Assets.............................. -80,905

[Deleted User]

Hi Rainy,

Just wanted to say hello and welcome to the boards.

There are some really nice people on here and they don't bite (well not all of them :rotfl:)

hypno06

I am guessing (although I don't know) that because you have equity in your house, you DO have an asset (even though it is not liquid!) and therefore you would be expected to use that in bankruptcy.

It might therefore not be in your best interests to go bankrupt, because you would possibly lose the house, and then as you say, you would have to pay more for rented....?

It would be worth asking the question on the BR board.....as I know some on there have managed to go BR without losing their house....but you do have a reasonable amount of equity, which is important.

Also, I don't think BR makes any provision for you paying back your mum - it can't be included as a secured loan as far as I am aware.....so again, this is not ideal for you.

Def look at doing a DMP - you have a small surplus of income, so should be able to offer token payments. Do the CCCS remedy online - it doesn't actually tie you to anything, just gives you an option.....you don't have to proceed unless you want to.

Or ring them.....I didn't do a DMP in the end, but I certainly spoke to them on more than one occasion, just to keep my options open!

National Debtline do template letters if you want to DIY - have a look on their website.

While you are jobhunting, get on the "Make £10 a day challenge" thread - loads of ideas, and an extra £5 or £10 a day would be mighty handy right now!

Also, get over to Moneysaving Oldstyle - for ways of getting your shopping bill down - you can probably shave of 30% of your grocery shop without feeling as though you are missing out!

Every little helps!

Raini

Hi Rainy :hello: What a lovely name!! ;):D:T

Well done for facing up to everything & just wanted to wish you luck on your journey!

Will be back!! x

Rainy_2

Hi all,

Thanks for your support. It's just so nice to hear from others who can relate to this!

I have taken professional advice and I am at the stage of communicating and making offers of payment to the creditors. I chose to do this as a DIY project as I feel in control of the situation, despite it's messiness! I have made token offers of £1 to them all - mixed responses as to be expected!

From the advice I received, I was told it might be possible to use the money my mum had 'loaned me' as a second charge on the house. However I see this as a long shot and hypno06 you are right with your comments there - thanks :beer:

I am an avid MSE fan so I will definitely be looking at the making extra income threads and how to save money in all areas of my life. :money:

I recently swapped energy suppliers, got MUCH cheaper car and home insurance and swapped home phone supplier too so I am getting there slooooowly! Next stop - groceries!

Luckily I have a few bits of stock left over from the business and they are trickling out nicely on Ebay. I'll be popping up my extra income targets for the week as part of my diary I think to spur me on!

Rainy_2

Raini wrote: »

Hi Rainy :hello: What a lovely name!! ;):D:T

:hello: Hi Raini! A splendid name if ever I saw!

Rainy_2

This is interesting. I received a Tower Investigations letter yesterday, exactly as described above. I was googling them when I found this MSE thread:

http://forums.moneysavingexpert.com/showthread.html?p=23130683#post23130683

(I hope that this link works?!)

Thought I'd pop it on here to in case any other DFW's have had anything similar.

Obviously I have got debts (recent ones, not past the 6 years) and am currently in the process of making arrangments with creditors and putting together a DMP. So, all my creditors are in the loop with my situation, I can't see the cause for this companies involvement.

If they do work for Lloyds TSB as mentioned a few times here, I am in regular contact with them and again don't see the need for this.

The letter was sent to my old business address (ceased to trade, hence the debts!) - all mail is being redirected to my home address. I'm sure it's only a matter of time before they track me down at home. Should I reply to them via letter and ask for the client details/proof of debt? I don't fancy phoning after reading others experience of it! Hmmm.

Rainy_2

Hi all, just a quick update!

I have done the CCCS remedy online and they have recommended bankruptcy, not really to my surprise. I am on the tail of all the BR forum threads now too!

I would rather volunteer for bankruptcy than have a petition against me so I feel a sleepness night of decision making coming my way :huh: