Need advice before I make a mistake

GhostHunter_3

Hello

My husband has been running his own business (self employed) for almost 6 years now. However it has never really been a big success and we have struggled throughout trying to make ends meet.

Back in November last year we had a breakthroughwith him finally admitting we are continuously chasing our tails and repaying debt occured from bank charges as the busness account goes in and out of debt as it has no authorised overdraft on it. The bank has many times threatened to 'pull the plug' on the business but frankly they are making so much money from us (minimum £400 every 1/4) it's no surprise they don't get around to doing it! :eek:

He agreed to wake up and start helping to sort out our finances which we have done thanks to the tremendous help and support of mum in law and a friend of hers and of course people on these boards!

We managed to get the account back in order in December but as expected the bank added their charges just before Chrismas and now we are £500+ in debt again without an agreed ovewrdraft.

My husband has decided yesterday he is sick of this cycle and wants to close the business account completely.

This is where my questions start (sorry it's long winded but background is important to me here to allow you to answer).

I have an empty credit card with Sky it offers a 0% rate for 12 months. I have not activated as yet. I was sent it in December last year but it came too late for Christmas spending.

I was considering paying off the business account onto it so we can close the bank account down. I would cut up the card to stop the risk of spending on it. Giving my husband say 10 months to repay it monthly and make use of the 0%. I would then cancel the card as I don't want it.

Is there a better card deal out there for this, I don't particularly mind not having the 0% if there is a very low interest rate for the balance life.
Thats if any other card company would accept me. I dont reay want to affect my credit score by trying / applying too often.

Is there another way out of this other than putting it on a credit card?

What are the consequences of closing a business bank account? My husband has got himself a part time job but he also wishes to continue cleaning cars for his clients for a bit of extra income for us.

I have suggested he either open a separate account (perhaps a joint account) and pay all money received from his own customers into that to be used as an overflow and to pay off the card balance.

Or should he pay it into his own account and use it for the same purpose?

The next issue wold be our Working Tax Credits we receive £72. a week at present but according to the 'entitled to' calculator this will be stopped and we would not be entitled to anything. This would mean disaster fo us as it is the Tax Credits that are topping up our incme allowing us to gt out of debt.

We could not rely on my husband making enough extra from his own customers to compensate for the loss of Tax Credits. Thats why we were in a financial hole in the first place. The income from his own work would still have to keep his van repayments and insurance etc etc etc going as it does now, but only enough to badly keep his business afloat (until they added the charges).
By the way he cleans cars (a valeter)!

Hope someone can help. Tried to go to webchat this morning but GMTV website not working properly on my computer so got nowhere couldn't even leave a message for Martin to answer later >:( :mad:

Thanks in advance!

thesaint

Has your husband asked the bank about closing the account down?

He could then find out how much they will charge in the time it takes to pay off the debt.

artic_fox_2

can you claim the charges back or is that only for personal accounts

GhostHunter_3

He has in the past as weve been in a similar predicament.

Basically the bank (Barclays) won't allow us to close the account down, me to take my name off the account (as I was a partner until 2 years ago when I saw it was never going to succeed).

They wont help us as we have already had a refinance loan. The only way they will help us is when we are back in credit, thats why we want to close it down. :j

We will also close our 'personal' accounts at Barclays and move back to Nationwide where we have banked 'personally' for years with savings accounts.

Thanks

GhostHunter_3

I will be trying to claim back the unfair bank charges once it has been sorted and closed.

I am already on a similar case with our old Lloyds TSB bank accounts but I am not sure what the proceedure is for business accounts (we dont have records of our past statements with Lloyds)??


Thanks

GhostHunter_3

Proud to be attempting to deal with our debts!

OberonSH

Hi, I am claiming my business charges back from Barclays, you can't claim the business managemtn fee, as they can say as we have a 'dedicated' business team it covers that (well, don;t know about you but I never managed to catch mine!)

I would simply close the account, put theoverdraft on your card to pay it off (interest free) and then pay anything in to a personal account. That's what I'm doing since they closed my business account for me. All the impact I've seen is that I save a couple of hundred each quarter on the fee they charge you for the pleasure of putting your money in the bank, and that I have to get people to make cheques payable to me, not the business.

nearlyrich

I would be really wary of moving business debts onto a personal credit card, have you consulted the small business advice service where you are?

Maybe more useful to have this thread on the small business board, PM me if you want me to move it across.