Newbie - Hello, need advice..

justabitskint

Hi all,

A new year and a new start, I have plans for the future but the short term is causing me some major problems.

I have a number of debts, credit cards, loan and overdraft. HSBC aren't being very helpful either.

Any advice on the below will be gratefully received;

I quit my job in mid October due to ill health and had a further 6 weeks after that signed off sick. I didn't inform the bank of this at the time, I know I should have done but my head was all over the place, I was signed off for anxiety and depression. I have a new job now, paid cash in hand 400 p/w, that I started last week and intend to save to retrain and start my own business.

However, in the inbetween time direct debits for December and January have been rejected and I have incurred £350 in fines in the last 30 days. I'm £950 over my agreed overdraft limit of £400.

I spoke to HSBC over the phone and explained my situation, I asked for an overdraft extension as a short term fix until I level out in the next 2-3 months, they said to go to my branch. I spent ages in my branch for them to tell me that I should call a number and they would be able to help me. I called that number and they said to call my branch. I have a debt something person calling me from HSBC tomorrow and I think they will push for me to extend my loan to incorporate my excess overdraft, over a long term this will cost me far more than a short term overdraft extension.

Where do I stand with it all? It's really starting to worry me now as I will need to open a business account in the next 6 months and start my own company. If they pull the plug on my loan, overdraft and credit card it will be impossible for me to pay immediately and screw up all the plans I have been making for my future.

I am chasing a tax rebate of around £700 and have £1550 in bank charges inc interest to reclaim, however I'm a little wary of the consequences given my current situation.

The easiest way I can see to look after the short term is to have an overdraft extension, HSBC don't seem to want to do this.

Scared, confused and a bit worried.

dlb

Hiya someone will be along soon to answer some of your questions, but i feel you may get some sharp and short answers regarding working cash in hand whilst trying to get a tax rebate.

Alot of people on here do not recomend consolidating debts with a new loan extra overdraft, but as said before someone with more knowledge on this will be along shortly.

anniestar

Welcome to the board. Good luck in getting sorted.

Paige

I am sorry to be so frank and do understand that everyones circumstances are different and difficult but you should not be working cash in hand. We would all like to have tax free earnings, if my OH and I did not declare our earnings we would be 1000 per month better off and able to pay our debt off much quicker. It is people like you that keep our taxes higher, why should I pay my taxes and not you ?

lynzpower

Ok, not only is there a moral issue with the cash in hand ( thats for you to decide - we have to BE NICE TO ALL MONEYSAVERS -but theres some implications too for your stability of employment. I suggest you negotiate with your employer. I had a freind who was paid cash in hand as her employer refused to tell the taxman . she put money aside for the taxman, so when the day comes they ask for it back , at least she has made the interest.

You should make a start by openign a new bank account elsewhere with no overdraft facility (eg a natwest step account) and getting your pay put in there

Secondly, visit the reclaim bank charges board, and look, every penny of this can be claimed back as the charges are unfair. have a good read of all the info

thirdly, do a statement of affirs, read southern scosers sticky first time posters. you are obviously not budgeting properly, so this is the first step ion getting a handle on whats going on!

mjdh1957

I agree about the morality of being paid tax in hand, but that's your decision to make. But be aware that if the taxman catches up with you it will be a fine and all sorts of problems.

Do you in fact need to register a company? I've been self-employed for nearly 20 years and don't have a separate business account any more (I used to but got fed up paying business bank charges).

justabitskint

Just to clear up a point, I'm not going to be dodging tax, I will be putting money aside and will declare my earnings in April. My mum used to work for the revenue so she is looking after all that for me. The point I was trying to make was that I would be paying cash into my account and it wouldn't be a regular payment from an employer.

Any ideas where I stand with my bank in the short term?

Paige

You did not say in your post that you were planning to declare your earnings. I am sorry for the comment re tax. I think that you just need to hold horses until you have received the telephone call from your bank, then post back and we can see what we are dealing with here. Also you need to put on a SOA so we can see where your money is going along with all your debts incuding APR's. My OH and I run our own business and I understand where you are coming from. Best of luck Paige X

safeashouses

I am not sure if it is any help but we went over our overdraft and were able to agree a decreasing overdraft - ie it decreases by £80 a month. So basically they extended it to where we were so we did not incur charges.... now they will decrease it by £80 until we have paid it off.

Siamese

Also HMRC may see your cash in hand job as self-employment. I'd recommend giving them a call to check this out as if you don't register as self employed within 3 months they will fine you.