£73,000 Plus Interest - best way forward?

73000plusinterest

Firstly I would like to say a BIG hello too everyone on this forum, and keep up the good work . Being a Newbie I hope I’m posting on the right section!

Hers my story:-

As my name suggests I owe £73,000 and am a little in the pickle!

7 years ago I started a sole trading business from home, it required £100,000 to set up and a large house, the mortgage stands at just under £300,000.
The business take about £4,000 per month which covers the mortgage £1600, bills and company running costs, all in all with personal expenditure totals around £4,000 per month.

All the start up costs were financed (unsecured) through credit cards and loans, initially I was kind of ok repaying these, but when the interest free periods expired etc it became a big struggle to impossible.

Doing the right thing BEFORE I missed any payments I contacted the creditors and advised of the money problems, the response was very unhelpful, apparently I had to have missed or under paid my repayments for at least 2 months BEFORE they would help!

So that’s what happened, I reduced payments and the default letters started arriving!
In a panic I called CCCS and constructed a DMP, this has been running 8 months now, however not all the creditors agreed to the repayments and the interest is still being applied to some of the accounts.
If the Interest was frozen I would be paying for 18 years, however as it has not in many of the cases, I think I will be 6 feet under before the last was paid!

I have been reading various posts on this forum and many suggest obtaining a CCA and SAR, some say some loans can be unenforacble, to be honest its all a little confusing.
I know some may say sell your home pay the debts but its not as easy as that,
If I sold the house we would not have enough money to cover the debts, or if there is I would have little left, then we would have nowhere to live and ZERO income – my young family would also be without a home and in the current job market there’s not much call for my skills.

I hope you understand my dilemma, and all help is very much appreciated

7300plusinterest

gonzo127

ok just want to say well done for coming here to find help it does take a lot to start to tackle things

now the first thing to do to try and help people understand your financial situation would be to post your SOA (link in one of the sticky threads at the top) this will allow people to see if there are any places you could cut down, i know it will be a bit more difficult becuase some will be business expenses but try and put everything down

also check on the entitledto website to see if you are claiming all the benifits you are entitled to incase you are missing any

have you or the CCCS tried contacting the creditors again to get them to agree to the DMP? have they given a reason why they will not accept it?

anyways thats just my initial thoughts

Welshdebtor

CCCs have a section on here, so go read that as I am sure I have seen posts by people in your shoes regarding unhelpful creditors.

And welcome lol

Tixy

Hi 73000

Have CCCS given any reason why the banks may be refusing to freeze interest? (sometimes they are just darn awkward, sometimes they won't if you are paying almost the original minimum payments, or if they think your spending in certain 'luxury' areas is too high).

Which creditors have not frozen interest yet? (lloyds are notorious on the boards at the moment for being one of the worst).

Your post isn't clear on how much your business net profit (or net income) is (income less business only expenses) and then how much your personal expenditure is.

Are you an unincorporated business (soletrader or partnership) or a limited company (or LLP)?

Is your business actually making a profit? as it appears many of the debts were incurred due to setting up the business it might make sense to have a look at or word with businessdebtline to see if they can suggest any other alternative solutions.

If you were to find employed work instead of running your business would your personal income be higher or lower? would it also mean you could downsize the house and thereby reduce your mortgage?

DarkConvict

These loans are they business or consumer loans. As CCA stands for consumer credit agreement. I assume business loans do not apply.

73000plusinterest

Thank you for taking the time to read my post....

Just to clarify.....

I'm technically a self employed sole trader, not a ltd comp.

The company is in the service ind. and run from my family home.

The business turnover £4,000 pcm gross of which council tax mortgage utilities etc has to be paid from.
I have approx £800 per month after all deductions to pay for food DMP etc, this is to support a family of 4.

All loans and credit cards are personal debts, but these are placed against my income tax due to being start up costs (not quite sure the way it works but thats what the accountant is for!).

The CCCS set up the DMP rather than the business debt line due to the home work complexity, so in creditors eyes I earn £3,000 net but i have to pay the mortgage, bills etc. although in real terms the business pays mortgage bills etc i was advised this was the easiest way to set it up.

On the DMP side of things I don't know the reason for some of them not accepting to freeze interest but CCCS advised they will in the end Cahoot and Virgin accepted - RBS now with Moorecroft declined and wants an extra £80 pcm which is a) not affordable and not equal in the calculations for money available in the DMP.

Hope this clarifies

Thanks

73000plusinterest

Sorry forgot....

If i was to sell and move to a smaller property, i would not be able to afford a mortgage or rent, my credit rating is now very poor.

The current income is due to owning the business, if I were to work for someone else I doubt I would see anything past £8.00 per hour. So if i can the best way would be to hold on to this business and house and try to find a way of clearing the debts.

niccatw

Hi 73000, welcome to the forum

HAve you had a look at the SOA calculator? http://www.makesenseofcards.com/soacalc.html

It would help every-one see where your personal income goes and (having posted mine tonight), folks are generally very good at suggesting ways of cutting back spending, for example in groceries or utilities. I know it may not seem like a lot per month in comparison to your debt repayments, but it might help...

Good luck