Debt advice

pink_phantom

I know someone who has debts of about £20k with various lenders.:eek: They have come to agreements with the various companies but I still think they are having interest charged and I am very worried for them beacause they won't be able to clear it for many many years as a result. I read somewhere that they can get the interest stopped and the debt reduced somehow. I would be very grateful if soemone could please tell me how this is done. They aren't spendaholics, they just fell on bad times because they were self employed. Many of the debts are personal but there is an overdraft on the business account. Are the rules for the business debts different? (note: None is owed for tax etc, just overdraft and company credit card). They also have personal loans, overdraft and credit cards.

Thankyou very much, advice would be very gratefully recieved. It is no good them going for 0% cards etc because their credit rating is shot.

Seraphim

pink_phantom wrote:

Many of the debts are personal but there is an overdraft on the business account. Are the rules for the business debts different? (note: None is owed for tax etc, just overdraft and company credit card). They also have personal loans, overdraft and credit cards.
.

Depends on how the company is setup as to whether they are directly liable for the business debts or not - a limited company is in essence another 'person' hence the debts are accrued to the company, rather than the directors of the company. If a limited company goes under, the debts will not be passed onto the directors (usually).

If they are trading as a sole trader, I believe they are liable for the debts, so if they company goes under, they could lose the house etc etc until the debts are paid off.

Similarly, if they are trading as a partnership, this is just the same as the sole trader - if the company goes under, both parties will be equally liable for the debts.

Sorry I can't help any more but I hope that they get everything sorted soon

pink_phantom

Thanks seraphin. They were a sole trader and incedentally they are still going. They are paying off their debts but don't make enough to clear anything substantial and I don't think they ever will because they are getting older and the business is so specialised I cannot see it going anywhere when they die or become too old to work. That is another subject altogether. My main querie is how to stop the interest accruing on the existing debts (business and non business) so that they can clear them quicker and retire in peace.x

pink_phantom

Anyone else?

Wonder_Girl

There are several options.

A DMP (Debt Management Plan) http://www.cccs.co.uk/faqs/debt.htm#debta

an IVA http://www.cccs.co.uk/faqs/iva.htm#ivaa

or Bankruptcy. http://www.cccs.co.uk/faqs/bank.htm#banka

But without knowing the full details it's hard to advise, I would give CCCS a call on 0800 138 1111

WG xx