Lots of Debts - Complicated Scenario

misstraddy

Hi All, first time for posting. Have read some of the threads with great interest and have decided to bite the bullet and ask for help.

I have lots and lots of debt approx 33500k on credit cards/loan and 43k on car loans plus a 4k overdraft. I also owe the Revenue 3k in Self Assesment. My predicament is complicated, I am a company director (run with my husband) and up until recently we have been just about able to afford our debts. However since the beginning of the year the company has not faired well, with companies consistently paying late, or not at all in some cases. We have in the past always taken what we need from the business to pay our debts and now unfortunately we can't. Obviously the business has its own problems but I am trying to get advice from you guys for my personal ones on here. My predicament is that because I don't have a set wage as such, what do you think I should be doing when it comes to filling in a income/expenditure breakdown for my creditors? I have barred calls to the home telephone number as the automated services are such a pain, and when you have 3 or more creditors calling you times by the fact that they ring between 6-8 times a day, then thats a lot of interference to be dealing with. I need to write to them and explain my circumstances but I really need to also offer them some kind of payment. I have also read about asking for the credit agreement, do you think I should be doing this or just asking for time to pay. I did contact CCCS back in January, but again have this problem with what income I should be putting down. The Revenue are also threatening legal proceedings, I have had to tell the mortgage company for the first time this week that I can't pay them, although I hope to be able to bring that up to date in the next week or so. Same with the Council Tax. I even had to borrow money from my parents this week to feed the family as all credit cards are maxed out. Please HELP, I am now at my wits end!!

In anticipation

Miss T

Tixy

Hi and welcome

Just to start - you do mean £33.5k on cards & loans don't you - not £33,500k!!

Are the car loans business assets or personal assets?

Have you ever paid yourself a set wage (via PAYE) or how was it recorded. Is the company actually making a profit at the moment? on paper?

On to the personal stuff - its does sound like this are at a critical point if you cannot meet your priority debts. And I do think you need some expert help quickly.

Does your house have any equity in it? would downsizing be an option for you? how much are the cars worth compared to the loans? are they on HP or unsecured loans? can you hand them back/sell them for much cheaper cars?

Does the business have other debts/loans and if so have you given personal guarantees for any of them?

I think it would still be worth you writing out a statement of affairs. For the income perhaps for now just estimate it based on the average amount you have taken out of the business over say the last 3months, that should give us a starting point. http://www.makesenseofcards.com/soacalc.html

misstraddy

Hi yes, 33.5k on cards/loans (Sorry)! Cars are on HP (personal) - fairly new agreements one taken out in August (OH car) and mine in September. I could potentially get rid of mine. OH needs his for work. Set wage through the business has always been at the bare minimum with the rest taken in dividends.

Company very unstable and looking at doing CVA or liquidation. Don't want to do liquidation as have worked very hard (12 years) and have personally guaranteed some business debts, so they would look to me for them if anything happened. The company also has a very strong order book, just run out of CASH!!!

Equity in house, 370k mortgage (on interest only), house worth anywhere in region of 400-415k (depends which estate agent you speak to)!!!

I will follow the link and do a SOA. I had a business advisor come round and told me to get rid of the old company, start again and for me personally to go bankrupt but not sure if thats the right path to follow.

I am not really a quitter!

Thanks for replying.

SouthCoast

Business Debtline can give advice on business debt:

http://www.bdl.org.uk/

DEVONLIFE_2

Hi misstraddy
I think what you need to do is to look at the two issues in iscolation. This being business and personal.
With the business I agree with Southcoast you need to speak with the business debtline. I would say that on a personal level you need to protect your assets and pay your priority bills (Food, council tax, mortgage,utilities etc.
Good news you can sell your car if its not required then get rid of it. I assume that as you take no salary or irregular salary from the business then your husband must do. I would list all your combined income and go from there.
There will be a few people along later who have vast knowledge who again will give advice. Bankrupcy is a BIG thing and again you need to take advice from one of the business debt companies about this. Best of luck what ever you decide.DL.

misstraddy

So here goes, have done my SOA

Do you think I should contact my creditors and try and come to my own arrangement with them, or should I go to CCCS or similar to seek further advice?

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 800
Partners monthly income after tax....... 2800
Benefits................................ 185
Other income............................ 0
Total monthly income.................... 3785
Monthly Expense Details
Mortgage................................ 1309
Secured/HP loan repayments.............. 705.3
Rent.................................... 0
Management charge (leasehold property).. 10
Council tax............................. 230
Electricity............................. 75
Gas..................................... 40
Oil..................................... 0
Water rates............................. 60
Telephone (land line)................... 40
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 60
Internet Services....................... 0
Groceries etc. ......................... 600
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 20
Car Insurance........................... 80
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 12
Buildings insurance..................... 39
Contents insurance...................... 0
Life assurance ......................... 80
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3532.3

Assets
Cash.................................... 0
House value (Gross)..................... 400000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 400000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 370549...(1309).....4.24
Hire Purchase (HP) debt ...... 0........(705.3)....0
Total secured & HP debts...... 370549....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................4406......352.5.....0
Egg Card.......................2935......75.13.....0
Barclaycard....................6523.03...146.7.....0
J Lewis........................2517.05...75........0
Debenhams......................4430.61...177.2.....0
Laura Ashley...................4561.28...182.4.....0
Lloyds.........................1991.38...45.44.....0
MBNA...........................8431......240.......0
Next...........................1886.23...195.8.....0
Ikea...........................411.18....12.34.....0

Tixy

Hi

You've missed the bottom off the SoA when you did the cut and paste - is that all of your debts shown?

To be honest I think it has probably gone too far to deal with this alone so would advise you to approach CCCS again. They do, I believe, have a section for dealing with self employed people and whilst technically you are employed as directors the reality of your finances is similar to being self-employed so it may be better to talk to someone from that section.

In the meantime can you try to cut right back on non essentials. Your grocery budget could be halved and still be easily sufficent to feed a family of 5. If you need tips on how to reduce this there is lots of advice on the old style money saving board.

Good luck

donglemouse

is the business a limited company or do you trade via your personal names? it's an important distinction to consider

even if it's a limited company, did you give any sort of guarantees that you are personally liable for?

you (and/or an advisor) need to understand the interaction between your personal position & the business to get a solution that fixes everything

just my 2p as an accountant, most importantly you need to take the appropriate advice to get you through

good luck

misstraddy

Hi, yes it is a limited company with an overdrawn directors current account of 35k!!

I personally guaranteed bank loan/overdraft of no more than 20k plus a couple of suppliers accounts. CCJ from one of those suppliers already for 10k.

It really is a big big mess. I am trying to be positive about it and sort the situation out, but it is so difficult as the two are linked in the sense that it all comes out of the same pot.

Thanks for all your answers to date.

RAS

misstraddy wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 0
Monthly Income Details
Monthly income after tax................ 800
Partners monthly income after tax....... 2800
Benefits................................ 185
Other income............................ 0
Total monthly income.................... 3785
Monthly Expense Details
Mortgage................................ 1309
Secured/HP loan repayments.............. 705.3 - is this the cars?
Rent.................................... 0
Management charge (leasehold property).. 10
Council tax............................. 230
Electricity............................. 75 - very high Gas..................................... 40
Oil..................................... 0
Water rates............................. 60
Telephone (land line)................... 40 - again this needs to be reduced drastically
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 60 - down grade now and then get rid
Internet Services....................... 0
Groceries etc. ......................... 600 - in BR you would be allowed about £440. In a DMP a lot less. Try for £300
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 20
Car Insurance........................... 80
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 12
Buildings insurance..................... 39 - does this include contents?
Contents insurance...................... 0
Life assurance ......................... 80 - this is very high
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 3532.3

Assets
Cash.................................... 0
House value (Gross)..................... 400000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 400000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 370549...(1309).....4.24
Hire Purchase (HP) debt ...... 0........(705.3)....0
Total secured & HP debts...... 370549....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................4406......352.5.....0
Egg Card.......................2935......75.13.....0
Barclaycard....................6523.03...146.7.....0
J Lewis........................2517.05...75........0
Debenhams......................4430.61...177.2.....0
Laura Ashley...................4561.28...182.4.....0
Lloyds.........................1991.38...45.44.....0
MBNA...........................8431......240.......0
Next...........................1886.23...195.8.....0
Ikea...........................411.18....12.34.....0

And the rest? Can you mark the debts his her and ours?

You need to talk to CCCS again.

I suggest you and OH also talk to Business debt line as well and wander over to the BR forum.

if you rented, how much would a three bed house cost locally?

misstraddy

Food, unfortunately I have tried to get lower, the best I can do is £600 a month. There are almost 4 adults in the house, with the kids being 16,14,12.
£705 is the cars, I can try and get rid of mine saving £300 a month.
Telephone/Broadband at £40 - locked in to a contract.

I know electricity is expensive, but it is a 5 bed house, with computers/tv's always on and the heater in my outside office (garage conversion) is run on electricity. And yes I do sit here in my coat and boots quite often!!

Building and Contents insurance together.

Life Insurance - looking for cheaper quotes.

Cannot rent a 3 bed house as we would not fit into one, 3 beds round here are very small, and cost about £750. You would be lucky to get a 4 bed for £1000. We live in a small village with excellent schools and there is not very much to rent at all at the moment, apart from the usual 1 beds at £450!!

Been on the BR forum, it does look scary, I know it might be the only option, but really don't want to lose what little equity we have in the house, as my husband can't afford to buy me out. We were hoping it was worth what the mortgage was so that he could buy the BI for £1.

All the cards/loan and mortgage solely in my name. Husband doesn't owe very much on his couple of cards.