Any advice?

HOLIDAYMAD_2

Just a few of thoughts.

As a Freelancer does he use a umbrella company or self invoice as a sole trader, you have said he is not ltd , the reason i ask is i would have thought he would have included his business expenses to arrive at his nett earnings figure.
As either working via a umbrella or as a sole trader these expenses are allowed and that brings the tax element down which gives a higher nett than would be if you were PAYE.

So in the event of BR you should be offsetting these expenses against his salary , you WOULDNT be able to show them again in the SOA. i would have thought that the OR will check those expenses ie receipts of rent /travel etc , when they determine a IPA. and as and when his circs change he notifies them and they reassess, these IPA's last for 36 months.

If he isnt off setting his business expenses against his salary then he should be.

London costs are high and sometimes it doesnt really pay to do these job roles , i to have been in that suitation and its very difficult living away from home, as costs are huge.

you may find that whilst it would be a struggle your earnings with tax credits may be the answer whilst he looks for work locally. Working Tax Credits will get you help in some cases with council tax benefit, vet bills, child care costs, intrest paid on the mortage, prescriptions and dental etc.
What unsecure debts you have can be put on a debt managment plan etc.

London Rents will be high should you relocate, so i cant see how your living costs would reduce that much and if you did relocate the salary would prob go down due to the tax increasing as the expenses would reduce if not more or less diminsh alltogether.

IMHO it looks that in error you have used his expenses twice a) to arrive at his earnings and then again on the b) SOA
So if that is right you have more excess than you realise.

From your figures I think you will end up with a huge IPA, so it could be a case of relooking at those job roles along with money management excerises.

i can see there is negative equity, you will find that if you didnt pay the secure loan they prob would reduce the intrest at the point they defaulted you, they are unlikley to go for possession if there is no equity at a forced sale for them selves.

FrenchMaid_2

kepar wrote: »

I am sorry to state this as you are in a difficult position, but you seem from your comments to want to maintain your current lifestyle after bankruptcy. Going bankrupt is not an easy decision and should not just be a way of dumping your debts and carrying on with the same lifestyle.
You will have to sacrifice things you do now, you cannot expect anything else.

Another point I will raise if you go bankrupt where you are the Or might not allow the mortgage/secure loan combined and only allow the average rent for a two bed in your area.

If you do go bankrupt and try and find somewhere to rent, it is not any easy process. Along with this fact everything else you take for granted like mobile phones, utilities , insurances are not as easy to obtain once you have the BR branded onto your forehead. It takes years for it to dissolve and in some cases in never does.
To be honest though looking at your figures and tightening your belt for a few months could help. Do you need the car or is that a luxury????????

I am not expecting to continue my lifestyle, I am just trying to get my head around this and yes, I am a bit shocked about some aspects, am I not allowed to be surprised? Am I not supposed to question things? Not questioning things has got me into the mess in the first place.

If I give up the car then I cannot get to some of the wedding venues, where I shoot weddings. I just looked through my order book and that would mean giving up about 2/3 of my monthly income. e.g. next w/e I shoot a wedding in deepest darkest Shropshire, I have to be there for 7am and I will not stop working until 11pm. There is no way I could get there by public transport.

The whole point is that we need to move away from our area. If my husband would be able to find work locally we wouldn't be in the situation we are in but I don't think you read my initial post at all. yes I can see that I may be spending a lot on groceries and if I will tighten my belt but I totally disagree with you that a few months tightening our belt will resolve our situation at all.

The fact still remains that we cannot move, cannot sell our property, cannot resolve our debts, if anything happens and my husband cannot work for a few days a month we are screwed.

I am sorry you feel that I am a waste of space but so far I have managed to pay everything, I am not behind on anything. I have tried to negotiate with mortgage company/secured loan to no avail, I want to pay my debts, but I have come to a point where I realise that we have to take some form of action.

FrenchMaid_2

JCS1 wrote: »

No one will make you get rid of the cats. But the business expenses need deducting from the SOA and contribution to household decreased by the same amount.

OR won't allow you £900 a month for groceries, and I would expect that to reduce to £450-500. No doubt your husband's food costs would reduce once you moved to that area anyway? The old style forum on here will also be able to help, one member created a website to feed a family of 4 for £100 a month healthily. I'm not saying you have to do this, but it is good for ideas.

Thanks for that. Of course, if we all lived in the same place my husband could take food in with him for lunch, and he would have breakfast and dinner at home.

And yes, I guess food is the place to save isn't it.

HOLIDAYMAD_2

Yes but those expenses should be in respect of his business not in your personal expenses, so IMO your actual left over at the end of the month income should reflect a increase of approx 1200 from what ive read.

There are many organiations out there that he could rent a room from in the week opposed to have high b& b costs.
B & B eats your money.

Spare room.com is one and there is a freelance org that will arrange a room for 4 nights a week without contracts etc, often a weeks rent up front is all that is needed, this would give him a kitchen to make food and take in lunches etc and do weekly laundry , it also may give him a drive way or off street parking to drive down therefore reducing the train costs , so would only then need his oyster card.
my weekly train cost was 143 pound per week , i got a room and drove reducing massive costs.

OR will not support those meal costs .
Ive also at times driven half way, jumped on a train and travelled daily.
Train from Bham is 1.5 hours into london so very doable although more time in the week out of the house.

The OR doesnt really care if we work or not, they want to know how we got into being insolvent, did we do anything to assist in it ie over spending and is there any assets /income to pay back .

I think you really need some advise and drill down on these costs.

JCS1

Agree food is probably the easist place to start. Here is the website:

http://www.cheap-family-recipes.org.uk/

And the old style board on here will help too.

The comments on the car are because you will have to prove to the OR that the car is essential rather than a luxury. But as you need it for work, and given the value, that should be ok.

If you do decide on bankruptcy, then the OR can ask for P&L's every 3 months, so might not be possible to keep money in the business during that time, but you don't have to take all the money out going forward, and could potentially keep something in the balance sheet in case replacement equipment is needed ( I'd recommend checking with your accountant on this just to make sure).

Please speak to business debtline and get their view too, always good to get a 2nd (or even a 3rd!) opinion.

FrenchMaid_2

HOLIDAYMAD wrote: »

Just a few of thoughts.

As a Freelancer does he use a umbrella company or self invoice as a sole trader, you have said he is not ltd , the reason i ask is i would have thought he would have included his business expenses to arrive at his nett earnings figure.
As either working via a umbrella or as a sole trader these expenses are allowed and that brings the tax element down which gives a higher nett than would be if you were PAYE.

So in the event of BR you should be offsetting these expenses against his salary , you WOULDNT be able to show them again in the SOA. i would have thought that the OR will check those expenses ie receipts of rent /travel etc , when they determine a IPA. and as and when his circs change he notifies them and they reassess, these IPA's last for 36 months.

If he isnt off setting his business expenses against his salary then he should be.

London costs are high and sometimes it doesnt really pay to do these job roles , i to have been in that suitation and its very difficult living away from home, as costs are huge.

you may find that whilst it would be a struggle your earnings with tax credits may be the answer whilst he looks for work locally. Working Tax Credits will get you help in some cases with council tax benefit, vet bills, child care costs, intrest paid on the mortage, prescriptions and dental etc.
What unsecure debts you have can be put on a debt managment plan etc.

London Rents will be high should you relocate, so i cant see how your living costs would reduce that much and if you did relocate the salary would prob go down due to the tax increasing as the expenses would reduce if not more or less diminsh alltogether.

IMHO it looks that in error you have used his expenses twice a) to arrive at his earnings and then again on the b) SOA
So if that is right you have more excess than you realise.

From your figures I think you will end up with a huge IPA, so it could be a case of relooking at those job roles along with money management excerises.

i can see there is negative equity, you will find that if you didnt pay the secure loan they prob would reduce the intrest at the point they defaulted you, they are unlikley to go for possession if there is no equity at a forced sale for them selves.

My husband keeps looking for job roles here in the Midlands, but there is simply nothing. The one job he saw advertised only paid 18k which would not even cover the mortgage. In London he earns 250-280 a day, we would be bankrupt anyway if he took an 18k job.

I am not sure if I calculated the expenses twice, the net pay is an average after taking 40% of for tax. This whole self-employment thing is still very new to us hence why we will need an accountant to help us with the tax return.

I am not so sure about the secured loan company not going for possession and certainly they won't reduce the interest, I've been trying that for two years now! But maybe I don't understand what you are saying.

FrenchMaid_2

JCS1 wrote: »

Agree food is probably the easist place to start. Here is the website:

http://www.cheap-family-recipes.org.uk/

And the old style board on here will help too.

The comments on the car are because you will have to prove to the OR that the car is essential rather than a luxury. But as you need it for work, and given the value, that should be ok.

If you do decide on bankruptcy, then the OR can ask for P&L's every 3 months, so might not be possible to keep money in the business during that time, but you don't have to take all the money out going forward, and could potentially keep something in the balance sheet in case replacement equipment is needed ( I'd recommend checking with your accountant on this just to make sure).

Please speak to business debtline and get their view too, always good to get a 2nd (or even a 3rd!) opinion.

Thanks for that I will call them tomorrow.

FrenchMaid_2

HOLIDAYMAD wrote: »

Yes but those expenses should be in respect of his business not in your personal expenses, so IMO your actual left over at the end of the month income should reflect a increase of approx 1200 from what ive read.

There are many organiations out there that he could rent a room from in the week opposed to have high b& b costs.
B & B eats your money.

Spare room.com is one and there is a freelance org that will arrange a room for 4 nights a week without contracts etc, often a weeks rent up front is all that is needed, this would give him a kitchen to make food and take in lunches etc and do weekly laundry , it also may give him a drive way or off street parking to drive down therefore reducing the train costs , so would only then need his oyster card.
my weekly train cost was 143 pound per week , i got a room and drove reducing massive costs.

OR will not support those meal costs .
Ive also at times driven half way, jumped on a train and travelled daily.
Train from Bham is 1.5 hours into london so very doable although more time in the week out of the house.

The OR doesnt really care if we work or not, they want to know how we got into being insolvent, did we do anything to assist in it ie over spending and is there any assets /income to pay back .

I think you really need some advise and drill down on these costs.

His train down to London (return) is £35 with Chiltern, we looked at the spare rooms and he did that for a while but the B&B he stays at is cheaper than most places he had a room. It's very hard to get a spare room for less than £200 per week in London. #car would be far more expensive plus I need the car for my job, it's no good for me if it stands somewhere I cannot use it.

So you are saying if husband wouldn't work, they wouldn't care? I struggle to believe that.

FrenchMaid_2

so upset now. whatever I do, wherever I look there seems to be no solution. contemplating ways to die so my husband can claim the life insurance.

JCS1

FrenchMaid wrote: »

His train down to London (return) is £35 with Chiltern, we looked at the spare rooms and he did that for a while but the B&B he stays at is cheaper than most places he had a room. It's very hard to get a spare room for less than £200 per week in London. #car would be far more expensive plus I need the car for my job, it's no good for me if it stands somewhere I cannot use it.

So you are saying if husband wouldn't work, they wouldn't care? I struggle to believe that.

OR has no say whether you work or not.

But, that has to be considered alongside any benefits you would receive, the standard of living you would have, and also the business reputation you are building up