Any advice?

FrenchMaid_2

HOLIDAYMAD wrote: »

umbrella companies are the biggest legal loop hole in the tax system, use one and you will never regret it as the OP says just make sure your timesheets are in with expenses, i have never ever been paid late.

ive also rented rooms in the past , spare room .com , eveing standard in london, loot etc.

and if your husband googles contractor accommodaiton, i cant remember the company name there is one based in london that will find him accom for no charge, even cheap B & B.

Kepar is bang on it when they say BR is a easy option but can have massive implications if your a good earner. in fact it may be time to drop the earning power if you go BR, then after discharge and say no IPA was awarded then get back on the earning power.

Non payment of your mortage and loan will give you months to save for a rental if your not currently in arrears , it would be a long process before you would be repossessed.

Can I just state my ideal scenario and maybe someone can assist me on how to get there?

My ideal scenario would be to rent out the house to two students as this would give us more than the £400 the estate agent, about £500.
Then I would like to rent down south in High Wycombe or somewhere. If I could then find a transfer to a cheaper credit card all payments would be cheaper. I think overall it would mean that we would be ever so slightly better off than we are now and with tightenting our belt food wise we would be much better off. HOWEVER: How do I get my mortgage company to agree to let out the property? Is there anyone who can help negotiate with them?

I am not looking for an easy option and in all likelihood house prices are going to rise again, my photography business is still young and I went from 0 to £1000 k in 6 months, so hopefully that continues to grow, plus my husband is set to get more into directing which would mean his daily rate is going to double.

Any idea?

HOLIDAYMAD_2

Renting out rooms individually is the best way to make money on a property rental , you will make more money that way than just renting out the property to one family.
Spare Room gives really good ideas as to what to charge and what you need to provide.

Why to students as they normally dont want accom out of the big summer break, also if they dont pay they are not entitled to housing benefits so can be a bit hit and miss.

I dont know why your mortage company says no, but you do need to make them aware they may increase the intrest and you need insurance in case something goes badly wrong, ie a fire.
in the event of a problem it can default your insurance if they have not given permission.
You can of course rent where you like.

I would say get away from using credit, thats the discipline that is needed and a debt charity will get you on a a payment plan, going for a new card with lower intrest is not the way forward, it might make sence to you , but in this thread we have gone from thinking of being a bankrupt to now getting further finance to reduce costs.

Also get some advise on rental obligations and your obligations as a landlord re tenure, deposits , insurance, declaring it to the tax man etc .

i think this is in fact a great way of thinking - but cut up those cards.

You should get around 80 pound per week per room, and you can also rent out the living room.

kepar

After reading your last post why do you want to go bankrupt? Your business is on the up , your husband is going to get more money.
It seems reading between the lines that you want to go bankrupt to get rid of the house, it is in negative equity and more importantly in the wrong part of the country.
Now with things on the rise for you, try and get busy and positive. Contact the mortgage company and ask about letting your house out.
Work out how much you owe mortgage and loan and work out is it feasible to reach this figure in 6 months a year. You may have to make cutbacks but if your careers are improving why throw it away by going br. It will probably do you more harm than good. You will be stuck with large IPA's , which will increase as your pay does.

Your husband needs to find a room to rent, to reduce his outgoing, join an umbrella company and reap the benefits.
Set yourself a target and who knows as your business flourishes you may see some light at the end of the tunnel.

Good luck, but if I was in your position with the income you have between you, I would be doing all I could to stop going bankrupt.

FrenchMaid_2

tigerfeet2006 wrote: »

Right then sweetheart, lets put together all the advice you have had.

First of all if you decide on BR then NDL are perfectly correct if you want to move nearer your DH's job.

Stop paying Mortgage, secured loan and any other debts. Still pay council tax, utilities etc. Save that money for rental, deposit, moving costs and BR fees. Find and move into new property. Get settled and then go BR. There are few other things you need to know with leaving your house but they can be covered later.

The OR understands that you need to get accomodation and has seen many people do it this way.

With your SoA you need to take all business expenses out of your gross income and then this leaves your net income. This includes your NI, tax, travel costs, phone costs etc. Your SoA should show your home costs.

Now start breathing and calm down. There is a way for you and you can do it. There is a lot of support here for what ever you decide. Keep asking questions and reading posts on here and asking questions and reading. But above all remember you are only human and remember you have been through a tough time and you are entitled to feel a bit frazzled. But above all remember you are not a criminal.

And breath.

Thank you I've calmed down a lot now. I've come through worse things in my life.

FrenchMaid_2

kepar wrote: »

After reading your last post why do you want to go bankrupt? Your business is on the up , your husband is going to get more money.
It seems reading between the lines that you want to go bankrupt to get rid of the house, it is in negative equity and more importantly in the wrong part of the country.
Now with things on the rise for you, try and get busy and positive. Contact the mortgage company and ask about letting your house out.
Work out how much you owe mortgage and loan and work out is it feasible to reach this figure in 6 months a year. You may have to make cutbacks but if your careers are improving why throw it away by going br. It will probably do you more harm than good. You will be stuck with large IPA's , which will increase as your pay does.

Your husband needs to find a room to rent, to reduce his outgoing, join an umbrella company and reap the benefits.
Set yourself a target and who knows as your business flourishes you may see some light at the end of the tunnel.

Good luck, but if I was in your position with the income you have between you, I would be doing all I could to stop going bankrupt.

Yes that is the advice we were given by Debtline that the only way out was bankruptcy.

FrenchMaid_2

HOLIDAYMAD wrote: »

Renting out rooms individually is the best way to make money on a property rental , you will make more money that way than just renting out the property to one family.
Spare Room gives really good ideas as to what to charge and what you need to provide.

Why to students as they normally dont want accom out of the big summer break, also if they dont pay they are not entitled to housing benefits so can be a bit hit and miss.

I dont know why your mortage company says no, but you do need to make them aware they may increase the intrest and you need insurance in case something goes badly wrong, ie a fire.
in the event of a problem it can default your insurance if they have not given permission.
You can of course rent where you like.

I would say get away from using credit, thats the discipline that is needed and a debt charity will get you on a a payment plan, going for a new card with lower intrest is not the way forward, it might make sence to you , but in this thread we have gone from thinking of being a bankrupt to now getting further finance to reduce costs.

Also get some advise on rental obligations and your obligations as a landlord re tenure, deposits , insurance, declaring it to the tax man etc .

i think this is in fact a great way of thinking - but cut up those cards.

You should get around 80 pound per week per room, and you can also rent out the living room.

I don't want to use the cards, I just want to move to one with less APR to cut down on the outgoings. At the moment my credit card is 29.9% and the Very Catalogue is 39.6% if I can move it to a credit card with an APR of 19.9% I would be saving £200 a month.

HOLIDAYMAD_2

FrenchMaid wrote: »

Yes that is the advice we were given by Debtline that the only way out was bankruptcy.

Debtline i hope did some initial exploring before giving out that advise .

i def dont see you as a person that is insolvent, and that is the point of being a BR. House prices in time will ride the current storm and if you plan to wait it will improve.

You have a fab income against your outgoings even if you cant quite see it and obviously a great work ethic. And all looks like its getting better.

I do not support any form of different lending even if its to bring the intrest down, i am a BR and for that reason ive been where you are. And ive done it all , had i had got out of the credit ethos then i dont think i would be where i am today.

I would therefore get into a plan with nil percent intrest and live on your actual income.
Not paying your credit as they want you to will give you a few headaches in terms of snotty letters and calls, but it will free up monthly outgoings , on what your paying now how long will it be even with 19% to clear it.
A DMP can pull out of at any time if its not working.

tigerfeet2006

FrenchMaid wrote: »

Thank you I've calmed down a lot now. I've come through worse things in my life.

Good! I know it sounds silly but when all this hits you and there is so much to consider and you have all this information thrown at you from all directions, you just sort of forget to breath.

TBH I know from your initial SoA it seems you have plenty of income, I actually don't think you have as much as it looks because by the time you take your true business expenses out of the equation you won't have as much left at all.

People have given you ideas on ways you may manage to not go BR but if you have been advised that it is an option by NDL then obviously it is a valid option as they have obviously looked at the full financial history which we obviously don't have.

Ineedaname

Having read through all the comments and suggestions and your own 'best plan' I think you need to seriously consider the stress of renting out a home some distance away from where you live. You'll need to factor in letting agencies fees as you won't be able to manage the property yourself so easily from a distance. Also voids in between tenants.

There are members who have gone down the route of renting out their own property and renting elsewhere, to try and keep their property as an investment and things have gone wrong and they've gone BR eventually anyway.

I'm not saying it's not a viable option, just consider it very carefully.

Perhaps go back to ND and put this suggestion to them? If they agree it's possible then they may be able to help you negotiate with your mortgage company.

One more thing, if you go BR you may have to 'close' your businesses and restart again immediately, hence the advice to contact the Business Debtline. It shouldn't stop you working but can be a faff.

Keep breathing, keep talking with your husband and keep taking advice, most importantly get advice about running your businesses.

HOLIDAYMAD_2

FrenchMaid wrote: »

[FONT=Verdana, Arial, Helvetica]This is going to be rather long I fear. [/FONT]

[FONT=Verdana, Arial, Helvetica]In 2005 we bought our house for 135k. 6 months later we took out a secured loan to consolidate some of my husband's credit card debt and to do work on the house. The secured loan was for 35k. [/FONT]

[FONT=Verdana, Arial, Helvetica]In 2006 I had my daughter and suffered from antenatal and then postnatal depression, which made working for me near impossible.[/FONT]

[FONT=Verdana, Arial, Helvetica]We managed fine, however, my husband having a good job. In February 2008 he started with a new company and a huge pay rise and all was well until that company stopped paying salaries in November 2008, he went without a salary until February when the business went bankrupt. He immediately had a new job and a while later we got some money back from the state. Then the new employer started paying late and eventually stopped paying. Husband took an emergency freelance job in London to tide us over. the business went bust and husband got a new job but within three months that business went too. I know this sounds hard to believe, but it is true. [/FONT]

[FONT=Verdana, Arial, Helvetica]For the past 8 months my husband has been working freelance in London, while me and my daughter live in the Midlands. He comes home on weekends. I've started to do translations from home and set up a photography business (didn't invest anything into it, had the camera and the lenses) as the cost of working in London (staying in cheapo B&B, food, travel costs) leaves us with a shortfall otherwise.[/FONT]

[FONT=Verdana, Arial, Helvetica]We just about manage to make all the payments each month, but if anything happens like when my daughter was poorly in hospital in January and we thought she was going to die and my husband didn't work for a week (freelance - no work no pay) we then seriously struggle. Any day he is not working means that we struggle to make ends meets. [/FONT]

[FONT=Verdana, Arial, Helvetica]We would love to move down nearer to London, so my husband could commute on a daily basis and rent but we cannot sell the house we are in. [/FONT]

[FONT=Verdana, Arial, Helvetica]Remaining mortgage: 130k[/FONT]
[FONT=Verdana, Arial, Helvetica]Secured loan to settle: 38k[/FONT]
[FONT=Verdana, Arial, Helvetica]House value: 105k [/FONT]
[FONT=Verdana, Arial, Helvetica]Shortfall: 63k[/FONT]
[FONT=Verdana, Arial, Helvetica]Credit card debt: 12k[/FONT]
[FONT=Verdana, Arial, Helvetica]Very catalogue: 4k (bought something when all was well on buy now pay later and then all the non-paying happened)[/FONT]

[FONT=Verdana, Arial, Helvetica]Our monthly mortage payments are currently: £833 (we've just came out of fixed rate £903 and now I have sleepless nights over the interest rates rising and we cannot enter a fixed rate as mortgage company won't let us)[/FONT]
[FONT=Verdana, Arial, Helvetica]Secured loan: £362- priority[/FONT]
[FONT=Verdana, Arial, Helvetica]Unsecured debt repayment: £550[/FONT]

[FONT=Verdana, Arial, Helvetica]We currently have to supplement our month by month outgoings by using up the inheritance we got from my husband's nan (3k) and the credit card...Also some months we earn slightly more (both being freelance) and other months less... the income numbers are therefore average...[/FONT]

[FONT=Verdana, Arial, Helvetica]I worry that my husband is sinking into depression because he is away from home all the time and we really just want to live together. I know we could reduce the unsecured debt repayment by entering into an agreement but that really would not [/FONT]

[FONT=Verdana, Arial, Helvetica]He makes a really good living but we are in such a mess that we just need to earn more and more and I worry about April because of the many bank holidays he cannot work it meanst that we will be £300 short:( [/FONT]

[FONT=Verdana, Arial, Helvetica]We have tried to speak to both the mortgage company and the secured loan company but there has been no understanding because we just about manage to pay everything every month so they cannot see the problem. I asked about renting out the property but as the valuation for rental income is only £400 they won't let us do that either. I asked about selling the house and repaying the debt: they won't consider that either. [/FONT]

[FONT=Verdana, Arial, Helvetica]I spoke to National Debtline and the lady said to move down south, secure a rented property, put aside the money for the bankruptcy, hand the key over to the mortgage company and then declare bankruptcy. [/FONT]

[FONT=Verdana, Arial, Helvetica]Wouldn't that be seen as us delibaretly causing bankruptcy?[/FONT]
[FONT=Verdana, Arial, Helvetica]where would we declare bankruptcy? In the Midlands or London?[/FONT]
[FONT=Verdana, Arial, Helvetica]Would we struggle to live after bankruptcy, can they take away all your earnings? [/FONT]
[FONT=Verdana, Arial, Helvetica]In the long run we want to emmigrate to the US, is there an issue doing that if you are bankrupt?[/FONT]
[FONT=Verdana, Arial, Helvetica]How long can you not become a director of a company? Not that it is an issue right now but because we are essentially sole traders but it may be an issue if you can never ever be a director again.[/FONT]

[FONT=Verdana, Arial, Helvetica]Any help really appreciated.[/FONT]

[FONT=Verdana, Arial, Helvetica]Statement of Affairs and Personal Balance Sheet[/FONT]

[FONT=Verdana, Arial, Helvetica][FONT=Verdana, Arial, Helvetica]Household Information[/FONT]
[FONT=Verdana, Arial, Helvetica]Number of adults in household........... 2[/FONT]
[FONT=Verdana, Arial, Helvetica]Number of children in household......... 1[/FONT]
[FONT=Verdana, Arial, Helvetica]Number of cars owned.................... 1[/FONT]

[FONT=Verdana, Arial, Helvetica]Monthly Income Details[/FONT]
[FONT=Verdana, Arial, Helvetica]Monthly income after tax................ 3300[/FONT]
[FONT=Verdana, Arial, Helvetica]Partners monthly income after tax....... 1500[/FONT]
[FONT=Verdana, Arial, Helvetica]Benefits................................ 81.2[/FONT]
[FONT=Verdana, Arial, Helvetica]Other income............................ 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Total monthly income.................... 4881.2[/FONT]

[FONT=Verdana, Arial, Helvetica]Monthly Expense Details[/FONT]
[FONT=Verdana, Arial, Helvetica]Mortgage................................ 833- p[/FONT]
[FONT=Verdana, Arial, Helvetica]Secured/HP loan repayments.............. 362 p[/FONT]
[FONT=Verdana, Arial, Helvetica]Rent.................................... 750[/FONT]
[FONT=Verdana, Arial, Helvetica]Management charge (leasehold property).. 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Council tax............................. 105- p[/FONT]
[FONT=Verdana, Arial, Helvetica]Electricity............................. 67-p[/FONT]
[FONT=Verdana, Arial, Helvetica]Gas..................................... 67-p[/FONT]
[FONT=Verdana, Arial, Helvetica]Oil..................................... 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Water rates............................. 25 -p[/FONT]
[FONT=Verdana, Arial, Helvetica]Telephone (land line)................... 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Mobile phone............................ 90[/FONT]
[FONT=Verdana, Arial, Helvetica]TV Licence.............................. 11 p[/FONT]
[FONT=Verdana, Arial, Helvetica]Satellite/Cable TV...................... 67 - some of for work[/FONT]
[FONT=Verdana, Arial, Helvetica]Internet Services....................... 25- some of it for work[/FONT]
[FONT=Verdana, Arial, Helvetica]Groceries etc. ......................... 900 - really high for a family of 3[/FONT]
[FONT=Verdana, Arial, Helvetica]Clothing................................ 100 each month very high[/FONT]
[FONT=Verdana, Arial, Helvetica]Petrol/diesel........................... 180- high usage of public transport as well[/FONT]
[FONT=Verdana, Arial, Helvetica]Road tax................................ 300- should be 30[/FONT]
[FONT=Verdana, Arial, Helvetica]Car Insurance........................... 67- any reason why so high, big car[/FONT]
[FONT=Verdana, Arial, Helvetica]Car maintenance (including MOT)......... 100- high[/FONT]
[FONT=Verdana, Arial, Helvetica]Car parking............................. 30[/FONT]
[FONT=Verdana, Arial, Helvetica]Other travel............................ 284- husband freekkance[/FONT]
[FONT=Verdana, Arial, Helvetica]Childcare/nursery....................... 57- she is at home[/FONT]
[FONT=Verdana, Arial, Helvetica]Other child related expenses............ 40-ballet and swimming[/FONT]
[FONT=Verdana, Arial, Helvetica]Medical (prescriptions, dentist etc).... 50[/FONT]
[FONT=Verdana, Arial, Helvetica]Pet insurance/vet bills................. 100[/FONT]
[FONT=Verdana, Arial, Helvetica]Buildings insurance..................... 35[/FONT]
[FONT=Verdana, Arial, Helvetica]Contents insurance...................... 0-need this[/FONT]
[FONT=Verdana, Arial, Helvetica]Life assurance ......................... 101- mine is under 30 pound[/FONT]
[FONT=Verdana, Arial, Helvetica]Other insurance......................... 15[/FONT]
[FONT=Verdana, Arial, Helvetica]Presents (birthday, christmas etc)...... 40[/FONT]
[FONT=Verdana, Arial, Helvetica]Haircuts................................ 20[/FONT]
[FONT=Verdana, Arial, Helvetica]Entertainment........................... 30[/FONT]
[FONT=Verdana, Arial, Helvetica]Holiday................................. 30[/FONT]
[FONT=Verdana, Arial, Helvetica]Emergency fund.......................... 100- high[/FONT]
[FONT=Verdana, Arial, Helvetica]Accounting co and professional insurance 100[/FONT]
[FONT=Verdana, Arial, Helvetica]Total monthly expenses.................. 5081[/FONT]


[FONT=Verdana, Arial, Helvetica]Assets[/FONT]
[FONT=Verdana, Arial, Helvetica]Cash.................................... 0[/FONT]
[FONT=Verdana, Arial, Helvetica]House value (Gross)..................... 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Shares and bonds........................ 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Car(s).................................. 800[/FONT]
[FONT=Verdana, Arial, Helvetica]Other assets............................ 0[/FONT]
[FONT=Verdana, Arial, Helvetica]Total Assets............................ 800[/FONT]


[FONT=Verdana, Arial, Helvetica]Secured & HP Debts[/FONT]
[FONT=Verdana, Arial, Helvetica]Description....................Debt......Monthly...APR[/FONT]
[FONT=Verdana, Arial, Helvetica]Mortgage...................... 130000...(833)......0[/FONT]
[FONT=Verdana, Arial, Helvetica]Secured Debt.................. 38000....(362)......0[/FONT]
[FONT=Verdana, Arial, Helvetica]Total secured & HP debts...... 168000....-.........- [/FONT]

[FONT=Verdana, Arial, Helvetica]Unsecured Debts[/FONT]
[FONT=Verdana, Arial, Helvetica]Description....................Debt......Monthly...APR[/FONT]
[FONT=Verdana, Arial, Helvetica]Barclaycard....................8200......200.......0[/FONT]
[FONT=Verdana, Arial, Helvetica]Barclaycard 2..................4500......100.......0[/FONT]
[FONT=Verdana, Arial, Helvetica]Very...........................4000......250.......39.6[/FONT]
[FONT=Verdana, Arial, Helvetica]Total unsecured debts..........16700.....550.......- [/FONT]


[FONT=Verdana, Arial, Helvetica]Monthly Budget Summary[/FONT]
[FONT=Verdana, Arial, Helvetica]Total monthly income.................... 4,881.2[/FONT]
[FONT=Verdana, Arial, Helvetica]Expenses (including HP & secured debts). 5,081[/FONT]
[FONT=Verdana, Arial, Helvetica]Available for debt repayments........... -199.8[/FONT]
[FONT=Verdana, Arial, Helvetica]Monthly UNsecured debt repayments....... 550[/FONT]
[FONT=Verdana, Arial, Helvetica]Amount short for making debt repayments. -749.8[/FONT]

[FONT=Verdana, Arial, Helvetica]Personal Balance Sheet Summary[/FONT]
[FONT=Verdana, Arial, Helvetica]Total assets (things you own)........... 800[/FONT]
[FONT=Verdana, Arial, Helvetica]Total HP & Secured debt................. -168,000[/FONT]
[FONT=Verdana, Arial, Helvetica]Total Unsecured debt.................... -16,700[/FONT]
[FONT=Verdana, Arial, Helvetica]Net Assets.............................. -183,900[/FONT]

[FONT=Verdana, Arial, Helvetica]Created using the SOA calculator at www.makesenseofcards.com. [/FONT]
[FONT=Verdana, Arial, Helvetica]Reproduced on Moneysavingexpert with permission, using Firefox browser.[/FONT]


[/FONT]

I cannot understand out of the priority payments why NDL would think they are insolvent,
there combined nett income is near on 5k , there priority debts i think are well within the norm cert no where near the 5k income .

Maybe NDL said continue with this level of spending then you will be insolvent.

Food, clothes , etc are really high, i have never known a familyof 3 to spend 900 pound on groceries etc- that is my opinion.

There is a high level of overspending IMO, through out the budget sheet.

The business expenses amount to one days work a week, that is pretty normal when achieving high income as a freelancer esp in london , and these can be mainly tax deductable so even if the husband continued to pay those expenses they would still have a net of over 3.5k each month.
But there are many ways that have been stated to bring that down. Esp the public transport and accom costs.

The unsecured debt against the income compared to there income is pretty low, and the secure debt is reflective of most owner occupied households in the uk with a secure loan, if we all had negative equity and went BR that would be a pretty sad day, the house prices will in time in improve, we go through this normally every 15 years,

ive pointed out some of the high expense, but if the OP considers some of the options in these posts regarding her husband expenses they can make some good savings.