Hi, Please can anyone help? SOA and current situation

rhubarbarella

Hi, I am hopeing some of you people on here may be able to help me out.
I have been having a read through the website and it has been incredibly useful, and pointed me in the direction of this forum.

So...My situation.

In November last year my partner registered as self employed, sole trader. He took out a personal loan of £15000 (£18500 to repay) and also a credit card debt of £5000 in order to set up in business.
Unfortunately business has been really slow, almost nonexistent to be honest. I don't understand what has gone wrong with it really - all the market reearch prior to opening suggested this would work, the feedback from people was great, high hits on the website, but for whatever reason this is not calculating into actual business.
Anyway, My partner has signed a lease on a retail property that is a 5 year lease with no break clause. This began in Sept 2010.
Then of course there are all the day to day running costs of the business, plus all the daily living costs of the house etc.
Also, he has a car on hire purchase, repayments of £202/month inclusive of tax, service, insurance etc
The problem is that having checked his accounts this month my partner has confided in me that things are far worse than I knew. All in all our full monthly expenses, when taking into account all business costs (marketing, insurance, stock, energy, rent etc etc) and all personal costs, mortgage loans etc is close to £4000.
At present the business has taken, overall since November, £1300.
At present I am not able to work, and am in receipt of benefits (I am hoping so hard my health will improve but at present it is not an option).
My partner has confided that he has less than £2000 overall in all his accounts. over the next 4 weeks however about twice that is due to be paid out.
I have just this week submitted a joint claim for income support in case we are entitled.
I do not really know what to do. My partner is suicidal, and I am genuinly fearful that he may harm himself. I have also contacted the national debtline and am going to chase that up tomorrow.
Since I found out the situation last week I have barely eaten or slept. I feel stupid and ashamed and I daren't talk to people about it. I have told only my Grandma, she has offered to loan us £200, but that won't go far and could leave her without.
All the debts are in my partners sole name.
We are not married, but do live together.
We own a property with a mortgage and are tennants in common rather than joing tenants, with a 50-50 split.
The house was purchased for 160000 in 2007 and has £139800 outtanding. I am unsure of its current value.

I have also done a statement of affiars for people to see.

I feel so vulnerable posting such personal information online, but truly I am desperate and unsure of where to turn. I must admit that there is a certain appeal in the two of us just ending everything together, but I have to think of my cats, and my little sister, she is only 12. Yet I am scared for my partner. There is a history of suicide in his family and I am truly scared. He has agreed I can make him a Drs appointment this week and go with him.

I don't really know what else to say. I feel so ashamed. I thought debt was something that happened to other people, we have always been so careful, we really thought this business would work.

All the advice so far from the debtline seems to be about "pay your essential payments such as housing, sort out a managment plan for the rest and pay a token amount", but we have a deficit of £3000/month, we cannot even pay our essesntial expenses when the direct debits go out in 3 weeks.

Please help me if you have any advice as I don't know what to do.
I aplogise for the length of this essay.
Any ideas on our options?

Statement of Affairs and Personal Balance Sheet

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................ 0
Partners monthly income after tax....... 0
Benefits................................ 730
Other income............................ 0
Total monthly income.................... 730

Monthly Expense Details
Mortgage................................ 650
Secured/HP loan repayments.............. 202
Rent.................................... 815
Management charge (leasehold property).. 0
Council tax............................. 89
Electricity............................. 43
Gas..................................... 189
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 14.99
Mobile phone............................ 76
TV Licence.............................. 12
Satellite/Cable TV...................... 33
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 0
Petrol/diesel........................... 30
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 28
Pet insurance/vet bills................. 0
Buildings insurance..................... 45
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 25
Presents (birthday, christmas etc)...... 300
Haircuts................................ 0
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
pets.................................... 40
other business expenses (sole trader)... 250
Total monthly expenses.................. 3391.99


Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 160000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 139800...(650)......0
Hire Purchase (HP) debt ...... 7000.....(202)......0
Total secured & HP debts...... 146800....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
personal loan .................18500.....320.......0
credit card....................5000......72........0
Total unsecured debts..........23500.....392.......-


Monthly Budget Summary
Total monthly income.................... 730
Expenses (including HP & secured debts). 3,391.99
Available for debt repayments........... -2,661.99
Monthly UNsecured debt repayments....... 392
Amount short for making debt repayments. -3,053.99

Personal Balance Sheet Summary
Total assets (things you own)........... 160,000
Total HP & Secured debt................. -146,800
Total Unsecured debt.................... -23,500
Net Assets.............................. -10,300

bouncydog1

For starters you need to split out all of the business expenses from personal ones.

Once you have done that, repost your SOA for your personal stuff and people will help. Things that stick out immediately, mobile, entertainment and presents.

Penelope_Penguin

rhubarbarella wrote: »

We own a property with a mortgage and are tennants in common rather than joing tenants, with a 50-50 split.

The house was purchased for 160000 in 2007 and has £139800 outtanding. I am unsure of its current value.

All the advice so far from the debtline seems to be about "pay your essential payments such as housing, sort out a managment plan for the rest and pay a token amount", but we have a deficit of £3000/month, we cannot even pay our essesntial expenses when the direct debits go out in 3 weeks.

Please help me if you have any advice as I don't know what to do.

Fisrstly you need to think about yours and your partner's health. Get him along to the docs, and possibly make an appointment for you, on your own, too.

Can you get an approximate value for your house? Bankruptcy may be an option for your partner, but there will be implications of that, which may be more crucial if you have a lot of equity.

Do you go out to work? Is there any possibility of you increasing your income, such as selling assets, working, etc?

Good luck :A

chevalier

Have you asked you local business link about a business mentor to offer advice about the business. Have you got yourself on line on facebook and twitter as the business, as a means of driving traffic to the site? Is the site optimised, I don't know quite how this works, but it is a way of making it come up on the first page of google searches? Are you ensuring that you make the business as flexible as possible. Ie as an expat it is frustrating when people won't post outside of the UK for example

Can you get someone take over the lease for you so that you don't have to continue to pay it?

What is the business in? There maybe someone on here in a similar industry who can offer some insight
chev

RAS

Hi

You do not need to apologise or be ashamed. Remember that most new businesses fail.

Your partner urgently needs business debt advice as well as a doctor's appointment. it is important that he does not continue trading once he knows he is insolvent.

The good news (for what it is worth), is that the debt is all in your partner's name.

You need to separate out your personal and business expenses.

rhubarbarella wrote: »

Statement of Affairs and Personal Balance Sheet

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................ 0
Partners monthly income after tax....... 0
Benefits................................ 730
Other income............................ 0
Total monthly income.................... 730

Monthly Expense Details
Mortgage................................ 650
Secured/HP loan repayments.............. 202 - is this business?
Rent.................................... 815 - is this business?
Management charge (leasehold property).. 0
Council tax............................. 89
Electricity............................. 43
Gas..................................... 189 - this is incredibly high. Is all this home consumtion? or is it the quarterly payment?
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 14.99
Mobile phone............................ 76 - this is massivley high - does this include a business phone?
TV Licence.............................. 12
Satellite/Cable TV...................... 33 - you need to get rid of this.
Internet Services....................... 0
Groceries etc. ......................... 300 - for two people this is very high if you want to sort your finances. halve it.
Clothing................................ 0
Petrol/diesel........................... 30
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 28
Pet insurance/vet bills................. 0
Buildings insurance..................... 45 - is this wholly domestic?
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 25 - what is this?
Presents (birthday, christmas etc)...... 300 - you rweally cannot afford £3600 per year in present in your situation. £10 per month would be a luxery.
Haircuts................................ 0
Entertainment........................... 200 - You simply cannot afford this/
Holiday................................. 0
Emergency fund.......................... 0
pets.................................... 40 - what about pets?
other business expenses (sole trader)... 250 - this is not domestic expense?
Total monthly expenses.................. 3391.99

Your partner probably needs to close the business aand take advice on bankruptcy.
This is no shame; think of how many very famous business men have done it at least once.

With that in place, your partner needs to see if he can get any sort of employment, or sign off sick if appropriate.


Assets
Cash.................................... 0
House value (Gross)..................... 160000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 160000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 139800...(650)......0
Hire Purchase (HP) debt ...... 7000.....(202)......0
Total secured & HP debts...... 146800....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
personal loan .................18500.....320.......0
credit card....................5000......72........0
Total unsecured debts..........23500.....392.......-


Monthly Budget Summary
Total monthly income.................... 730
Expenses (including HP & secured debts). 3,391.99
Available for debt repayments........... -2,661.99
Monthly UNsecured debt repayments....... 392
Amount short for making debt repayments. -3,053.99

Personal Balance Sheet Summary
Total assets (things you own)........... 160,000
Total HP & Secured debt................. -146,800
Total Unsecured debt.................... -23,500
Net Assets.............................. -10,300

tangyfog

A long shot but you might be able to find some help with angel investors. i.e. local business people if your business has some value
that may be sold on i.e. offering 50% of the business for x amount of money. Sometimes there is value in a business even thought it has made little or no money.

plenty of compaines like that but as you are not a limited company this route is not very likely but still worth a try. The other possible idea is to sub-lease the property with the landlord help? This seem to be a big part of your expense. May people want to use a property but with out signing a 5 year lease.

So for example there are always people looking for short term lease agreements. maybe you could get look into sub leasing with the help of landlord and solicitor. not sure if you can do it by private agreement but normally for contracts you better of using a solicitor
as they know their stuff.

Try using a property solicitor. when i was looking at taking a commerical lease i spoke to Stephen Rimmer LLP solicitors.

Very helpful solicitors, free to ask them about you situation.

rhubarbarella

Hi, thanks to responses so far.
A quick reply to a few of the queries thus far:
I made an error in the SOA, £300 for presents was the YEARLY total, not monthly, my mistake sorry, I am rather stressed.
Secondly, as someone had asked, the mobile phone covers my personal phone, plus my partners personal and business mobile. His personal contract has ended but they said it will be 30 days before cancellation takes effect, so there is one more month to pay on this.
Gas price is domestic gas, I don't know why my bills are so high. A couple of years ago my winter quarter gas bill was £2000!!! I had the meter changed and they now charge me £600/quarter over the winter months and about £300/quarter over summer months.
in entertainment I included my partners and my cigarettes. Yes, stupid I know and we are both in the process of trying to quit now, were down to 5 each a day, and rollies not premade so this should come down significantly. we have also stopped drinking (not that we were big drinkers but a bottle of wine here and there builds up)
The £202 HP is for the car and is one o those peugeot "just add fuel" arrangements so includes all over assoc costs. This works out roughly the same as public transport in our city and is essential for my partner to actually get to work (obv if theres no work its a different situation)
the £33 for cable covers my TV, Internet and home phone.I tried to cancel, as we don't even have a TV anymore (sold it) but they said we are under a 12 month contract and cannot reduce this payment. The £14.99 is business landline in shop.
The £45 insurance is domestic home and contents. The other insurance figure is for the retail premises and also public liability ins for the business.
the rent cost is the retail premises.
the cost for groceries is obviously something to come down. I have very specific medical dietary requirements which bumps up the costs somewhat such as gluten free bread, non dairy milk (these are medical conditions btw not faddy eating)
I have applied for a "health with prescription costs" as I have to have 7 different medications on prescription at present, so thats quite pricey.
Pets is for my cats - to cover their food, litter, vets bills and de-flea, worming etc.
Please don't have a go at me for having my cats, when I took them in (all rescue) we had a joint income of £40000. A lot has changed since then but at present they are keeping me going.
er, what else was I asked..
other business expense is for things that are owed, eg invoices for advertising, web hosting, incidentals, postage, stationery etc
prior to setting up this business at the end of last year my partner had been signed off work due to stress (this was about March 2010) as he was ina really bad way, uncontrolled migraines, bullying at work, we lost several people very close to us to cancer in 2009, he was working in the medical profession and terrified of making a mistake as he was so not well.
GP signed him off indefinitely. He felt really ashamed and fmaily pressure not to be "a scrounger" etc he tried to get back into work, and decided self employment was the way to go.
Now I am worried he will kill himself.
He is talking about suicide. I have tried to speak to his Mum, she just said "don't spend as much money". My Grandma said people who talk about suicide won't do it (which is bull**** in my opinion)
I have made an appointment for him with the GP but they cannot see him until next Monday.
I have found a local advice centre which has a debt caseworker and a drop in on wednesday morning and so I am going to go up there (hopefully wth my partner)
Thankyou people so far. I am having a really low day today, really struggling. I hope my ammedments/clarifications help you make more sense of what I have written.
I don't want to be melodramatic but if my partner kills himself I will not go on. I don't want to die so I have to save him somehow.
I think bankrupt may be his best option. I am scared of being homeless.
OK anything else you want em to answer just ask me please. Sorry for anything that doesnt make sense. also sorry if I sound a bit sh**y, having a really low day.

erm, was there anything else?
I am not working due to my health - a serious car accident a couple of years ago, mental health, physcial health, mainly gastric and gynae, plus fibromyalgia, depression etc etc. I have not worked since I left my last job due to health problems in jun 08.

ps, I had a PM from someone asking for the business URL so they could offer any feedback, a very generous offer. Do people think I should respond? as obviously this would give away our identity and I am not sure if I should.

Thanks, sorry etc

rhubarbarella

ps, the line of business is beauty treatments, namely permanent make up and tattoo removal.
use facebook and FB advertising, cannot stand twitter and don't "Get" it. Have paid for "Ad-words" or whatever it is called to boost listing in google search. Currently getting around 200 unique visitors/month. currently getting about 2-3 clients per month.
for marketing have tried flyiering, letterbox drops, facebook ads, newspaper ads, local magazine ads, offers and promotions, referral bonus for other local business, etc

RAS

rhubarbarella wrote: »

He is talking about suicide. I have tried to speak to his Mum, she just said "don't spend as much money". My Grandma said people who talk about suicide won't do it (which is bull**** in my opinion)
I have made an appointment for him with the GP but they cannot see him until next Monday.

Hi

Did you explain to the GP that your partner is talking about Suicide? Repeatedly by the sound of it. A week long wait uis not good enough.

Did he have a key worker previously? If so, please try and get hold of that person.

And have you consider talking to the Samaritians, or getting him to talk to them?

i would also sugest that you get hold of one of the debt charities here https://forums.moneysavingexpert.com/discussion/2077631 and that you also speak to Business Debt Line.

theoretica

In no particular order-

Do you have a separate bank account with no direct debits? If you take all your money out of the account with direct debits now, and cancel the direct debits, you can then decide what to spend it on - probably food rather than business expenses.

Do you know about the prepayment certificates for prescriptions? £10.40 a month gets you all your prescriptions. I assume you are in England. http://www.nhs.uk/nhsengland/Healthcosts/pages/Prescriptioncosts.aspx I believe this can also include nicotine replacement patches or gum.

There is an organisation you probably ought to talk to- Business Debtline 0800 197 6926 http://www.bdl.org.uk/

Who is your gas company? You really need an assessment to find out why that bill is so massive and what help you could get to bring it down. There must be someone offering these assessments to people on disability benefit. (I know British Gas were, last year, even if you were not a customer of theirs.)

When you are going to default on debt there is a form letter to send to tell them to contact you only in writing, not by phone. Changing your phone numbers/getting cheap PAYG might be no bad thing.

Good luck!

rhubarbarella

RAS wrote: »

Hi

Did you explain to the GP that your partner is talking about Suicide? Repeatedly by the sound of it. A week long wait uis not good enough.

Did he have a key worker previously? If so, please try and get hold of that person.

And have you consider talking to the Samaritians, or getting him to talk to them?

.

I didn't tell the receptionist why he needs the appointment, no. Do you think I should ring them back tomorrow and tell them that he appears suicidal? He has only had about 4 hours sleep/night since last weds, and has only been eating once a day, half a sandwich or a ready meal. He looks terrible, it is scary. He is skinny anyway, he is like a skeleton now it is shocking. He looks like he has just escaped a prisoner of war camp or something.
He did not have any key worker or anything. He was put on the waiting list or counselling previously (last year I mean before all this) and he was told that he was non-priority, nd that the current waiting list for help was 24 months (which I think is appaling). Obviously cannot afford private therapy now either. Also I was scared to tell them he is suicidal in case they lock him away in a mental ward and drug him up the eyeballs.
I have been talking to the national debtline again. They said a DMP is not appropriate as not enough income for one of those. Need to look at bankrputcy.
Can anyone tell me what would be likely to happen, what with us each having a 50% share of the house? As debt is in his name, would they be able to take my share of the equity if I have any? you see what worries me is that if the house was repossed/forced sale, and I did get any equity that it would mean we could not get a council flat to rent, but that with no income and a bankrupt partner we would not be able to get a prvate rental property. This worries me tremendously. I am terrified of being homeless especially with my health problems.
I am sorry to keep going on and on.
Thanks again