Please Help

revolution2509

Dear All,

This is my first post and I am in need of a lot of help. My mother passed away not so long ago and since then things have been tough. I am posting this however to request some much needed help.

Our family has its own business (my mother used to work in) which is very difficult to manage. There is a secured loan on this business which is attached to an old victorian 2 bedroom house which we do not live in anymore. I would like any advice at all on what steps we would need to take to;

(1) Sell the business and the house so that we can clear the 100+k in loans we owe plus other business related debts;
(2) How to manage until we sell this house/business. There is a freeze period on loan repayments but once they do start, I do not know how on earth we will manage.

I am a recently graduated student and my father is retired. My elder brother is working full-time now in the shop but it does not bring in enough money at all. He is now unable to look for new work because the business runs from 7am-6.30pm and since it is our only source of income I feel like we are in a black hole because he cannot get out. I have secured a job and start in a couple of months. This will help I am sure but we are hassled everyday for money from several people we owe. Any help would be much appreciated.

Please feel free to ask any questions should you have any that may help you understand the situation better should the above not suffice. Thanks.

r.mac_2

i am afraid i can't offer any advice, but wanted to say hello, welcome to mse and give you a ((((((((((((((((((((hug))))))))))))))).

I am sure someone who knows whats what will be alone with help soon.

Ali-OK

Hi and welcome.

Sorry to hear of the loss of your mother. A difficult enough time without the financials you describe.

If you're not able to sell the property due to the secured loan the shop has, could you rent it out in the meantime and bring in some cash that way?

It would help to post your SOA (statement of affairs - all incomings vs. outgoings - see the sticky thread on it for First Time Posters), we could probably help with ways of cutting your outgoings that aren't shop related.

Could you work in the shop for some time, prior to starting your new job, to enable your brother to job hunt?

I'm sure they'll be some others along to suggest other ideas too.

lynzpower

Hi there

Few thoughts from me- when your mum was running the shop, how was it doing? Was it bringing good money in? Or was it faltering?

Have you had the house & business valued?

An SOA is imperitive at this stage in the game, so if you could do one of those, that would be great

Lynz
x

revolution2509

We have a house and about 8 miles away, we have a corner shop with a 2 bedroom victorian house attached to it.

It is very difficult for me to do an SOA because this debt and all of this tension has been caused by a ridiculous lack of organisation and so I cannot get all of the information etc.. For example, the business-house now has no telephone line. From the house which we live in (not the business property), mortgage payments are £800 per calendar month, the BT telephone line with broadband internet is £60 pcm, the gas is around £85 pcm, Electricity I am not sure, Food expenses are approximately £200pcm for all three of us. The shop-house however, since we do not live in it, has electricity charges (no gas) again I am unsure of the amount, and invoices from our suppliers.

Also, it is worth me mentioning that on this house which we have mortgage payments, my brother fell behind on payments and so theres been a lot of mortgage charges. his bank account is being charged for bounced cheques, returned direct debits, every charge under the sun, for example, a £90 was levied a few days ago. (Can he reclaim "unfair" bank charges on closed bank accounts within the pst six years?)

Furthermore, there is the possibility of renting this place out but I would much rather sell the business with the property. I have been working hard to paint, clean out, and decorate this place as much as possible and would love to sell it. The loan secured on the shop house needs to be cleared and the last time we had this place valued it was in the region on £160,000 but that was over one year ago now.

I have a student loan to be paid off of $15,000 and whilst this APR rate is 3.5%, if I dont take care of this it would soon spiral out of control. I have never been in debt myself and I am finding this a very heavy weight on my shoulders. I would really appreciate it if you can also help me in working out what needs to be done to sell this shop-house. I feel if we can sell it, either through an estate agent or independent of one, we would receive a lump sum that I can personally manage and ensure that it is properly invested and used to pay off all of our creditors.

Thanks for your time.

lynzpower

Is there no way you can sell the house you are living in, move into the one with thr secured loan on it then sell the business?

If your brother is having trouble paying the mortgage on the one you guys are living in at the mo, then it makes sense to me to sell the house that you are living in, clear the arrears to do with that house, sell the shop & clear whats left on shops debts?

Do you have any vehicles within the family that you can sell?

What does the shop sell? Any chance of taking the stuff to a bootsale, plenty of traders at them, seem to do quite well, or sell remaining stock on ebay?

revolution2509

Hi,

the mortgage arrears were paid off last month. We could sell this house but my priority is to sell the shop-house. its a newsagents and it does do quite well for itself. My reasons for selling the business-house is that it has been difficult to manage, the hours are long, the amount we could earn from it would be more than enough to pay the people we owe. I remember reading some time ago about how you can call the mortgage company and telling them you are having difficulties paying the initial agreed amount and come up with some sort of solution to benefit us both? Is it possible to negotiate in this regard?

Also, since I have no experience whatsoever in buying or selling property, what needs to be done in order to sell the shop & attached house? I have read a little but not in laymans terms.

lynzpower

First off my family bought & sold shops in the 80s. One thing I do know when you are selling a business is that you have to have your accounts in order, as the turnover/ takings figures will determine what the business is worth. If the books are all over the place, then this needs to be your first priority to get these in check.Also are there any inland revenue bills outstanding on it.

Does the shop come with its own flat? To be honest, for a small business person, getting finance to buy the shop might be hard enough, without selling them as a package. Surely, if you sold the shop on its own, then the secured loan on the house would be paid off? then the house could be sold seperately, for someone to live in, ie you would be restiricting your buyerts amassively on the house, if they have to buy the shop as well - there wont be many buyers who would want the two together.

revolution2509

To be honest, we have had a lot of people interested in buying both the shop and house together. The problem with selling separately is that by law, we would need a fire exit and wash-room within the shop itself which is nearly impossible to do since it is quite small. it is in a great location and has done really well in the past which is why several people have enquired about it.

The books are being taken care of by our accountant so these are in order. There are no inland revenue bills on it. Perhaps it would reduce the number of buyers in having to sell them as a package but there really isnt much of an alternative.

lynzpower

OK, so whats stopping you selling it now as a going concern?

revolution2509

Couple of things:

(1) I was not sure what steps to take i.e. who to approach to begin the process
(2) We used to live in that house for 18 years and so there is a lot of tidying up to be done
(3) some running repairs on the property are required

You have been very helpful and taken a lot of time out to assist me. I am very grateful.