IVA? Bankrutpcy? On the edge...

jon-jo

I've made a few posts about my situation before, but thought I would try and provide a concise explanation of my situation. In essence, I have been able to manage my debt, but in the last month I've had a second baby (with partner on maternity) and now my company of which I am a director is very likely to fold. A perfect storm (but hopefully not too perfect).


Thankyou for advice in advance, and apologies if I'm not as concise as I would like to be.



My Statement of Affairs


I have been running my own company for 6 years, through which time we have been hand to mouth pretty much most of the way. We raised investment in the first 3 years but now the shareholders money has dried up.

My debt has increased steadily in that time, due to low pay at beginning of company. The expectation was always that the company would do well and my shares would cover my debts.

Pay increase to £45K in October, although currently a month behind. From october I was able to start to reduce debt finally.


I have ~£40k in debt, majority on credit cards. Some are on lower rates of 7%, one is still on a 0% deal, the rest on 20% rates.

(I also have personal gurnatees for overdrafts for the business for up to £20k.)

I have been unable to get any more 0% offers, due to I think the size of the debt has become.

I live with my a partner, our 3 year old and 1 month old sons. She is now on maternity, on statury minimum of £100 / week or so. She has no debt in her name.

Our rent is £1200
My minimum repayments are £1200 / month

Other bills etc add up to £1000 +

My partner has some savings she can use to cover some bills, but not for long.

The business is very rocky, and may fold soon (with in days or weeks), leaving me needing to find another job asap.
I have spoken with the CCCS, have another call next week.


We live in London

Questions:

What the hell should I do!!

We are considering moving to Ireland, to her home village ,where we can rent a property for £400 / month. If my company survives, I will need to work remotely from there.

I am considering, if I have a job still, to buy a property in Ireland for £100k, so at least can start to build up some equity.

I am considering an IVA (who should I speak to about one?) or bankruptcy, but these are last resorts. I am hoping the CCCS will be able to suggest what I should do. My concern is lack of assets for an IVA (and so I had an idea to buy a property before an IVA?), and now a stable job.


I feel we are eligible for some tax credits, but feel these may be a drop in the ocean.

Very worried what I am going to do if the company folds, I doubt I can get a job that pays the amount I need in a very short space of time.


Extremely worried, extremely depressed and extremely frantic. Feel I have ruined my sons lifes before they are out of nappies.


But, I somewhere inside me is an internal optimist and still feel there is a way out.


thankyou


JJ

dancingfairy

Hi - have you spoken to National BusinessLine about the state of your company and whether things can be improved there?
With regards to your incomings and outgoings - o.k your rent is high but I can't fathom out how your other outgoings can be 1000 a month (not including debt repyments I presume) - surely it doesn't cost that much to pay council tax, food, electric, gas and clothe yourselves? Are you living a life you can't afford? If you did go bankrupt or enter an IVA you would have to live on a budget so it may be worth trying to work out how much you think you need in each category - ie rent, council tax, food, clothes etc so when you speak ot the debt charities you have a good starting point.
I can't for the life of me see why you want to buy a property before entering into an IVA? yes IVA's are good for people with property and assets to protect but if you have a lump sum and you buy a house before an IVA it would look suspicious to me and i would be questioning why, if you knew you were in a mess did you spend x amount buying a house when that could have paid off part of your debts?
If the business is unsustainable then you need to think about where you want to live - and how much it's going to cost. You also probably want to look at job prospects as well so moving to Ireland may sound great but if it's not got such good prospects its a bit of a downer.
If your business does fail - what sort of benefits would you be entitled to - could you afford to stay in your house without any of the unsecured debts? If you can't afford to pay your general living expenses then an IVA/Bankruptcy will not help until you have resolved the housing situation. You may need to think about possibly selling up and renting - at least then you may get help with housing benefit etc.
I think the key really is to get the business sorted one way or another and then see what the housing situation is - from there things will start to fall into place.
df

bernard828

First thing's first. Set aside the issues regarding your debt repayments. The main thing you need to do an IVA is stability. An IVA can take care of the debt situation but you have to have a stable home life with a predictable and sustainable income. The IP will need to work out what your income is and then work out what your necessary expenditure is, so he can establish what you can offer to your creditors. A crashing business income gives you none of that and no IVA is likely to be accepted while the business you're running is losing money.

You need to make a decision. Is the business surviving, or is it going to the wall? Assuming you don't own any property, do you want to run a business in the future? If not, speak to the CAB about bankruptcy because you might find you're not going to lose anything by going bankrupt.

But for an IVA application, you need to be either running the business and trading profitably or be employed elsewhere and you need to sort the Ireland living situation out. Get your home life straight and get a secure and sustainable income. Then you can start thinking about an IVA.

katiemay_2

My advice would be speak to CCCS. Just be completely honest about your situation. They are trained to advise you and are a non profit organisation. They were fantastic with me - set out all my options and told me step-by-step what to do next. I have just completed my IVA (although I was offered other options) and I honestly can't recommend them highly enough.