Help/advice welcome - BR/IVA - cards, when to stop paying etc

SomewhereOverTheRainbow

Hi

Have been reading for 3 days now and got my head around a lot of issues but first some background..............

I am full time employed, my husband is self employed (sole trader)................in the last 18 mths we have managed to clear almost £20k of debt by living as frugally as possible and not accuring any more debt.

However, probably due to the hike in interest rates for cc, and a slight decline in business for DH, we are beyond struggling now............and unable to meet our financial committments. Each month we have at least one missed cc payment.

I spoke with our accountant on Thurs, having already completed CCCS online help, Acct recommneding BR, CCCS - IVA. Spoke with IVA.COM yesterday, a very helpful man spent an hour on the phone with me and answered alot of queries. Accountant, who is not IP, spoke with me again yesterday having consulted with IP, and is still recommending BR although admits he knows little about IVA. We are going to talk again about it.

I am really unsure about when to stop paying cc's - and although I have no desire to add to my debt, some of the cards having available credit on them which would be great in contributing to court fee's...............This month I have paid some cc's and don't have money to pay others - what to do?

Acct assures us the business is and will be fine. We have no creditors for it, just casual credit arrangements with suppliers who we have managed to keep up payments to - we have to to keep business afloat.

Acct will help me work out what DH's income is because, of course, to us we have no money for budgeting food, fuel etc, we have been living from hand to mouth for months now.

Part of me is so very disappointed that this has come about................part of me is relieved that the days of pouring over spreadsheets every weekend trying to keep the wolf from the door.

Any comments re cc's or advice, in general, would be much appreciated.

fermi

Firstly I would seek advice on the best option from another debt charity.

See: https://forums.moneysavingexpert.com/discussion/1056083

I would say National Debtline for preference.

Officially it's not OK to withdraw cash on credit cards for court fees. In practice if you have absolutely no other way of paying them, then it's often a case that a pragmatic view is taken and it's no big deal.

Regards paying CCs it's important not to make a "preference". Ideally you wouldn't pay any at all when/if you know you are going into an IVA or BR. In practice, again, a pragmatic approach is usually OK. e.g. you might have to keep meeting the (minimum) on some so that you have funds to live. Again, though it must be a case where you have no real choice.

SomewhereOverTheRainbow

Thank you Fermi. I will contact National Debtline

We haven't used all but one card for 18 months now - I don't even think we have physical cards in my possession (they hit the fire one evening in a 'discussion' with DH about him NOT using them) The one that was used was DH paying for something for a friend who, wisely, doesn't have a CC - did the money he gave him make it to CC, did it hell!!

Our biggest issue I think is the fact that I need to reapply for lease on my car in Jan and so I need to try hard to keep good credit scoring as possible. Acct has advised DH to apply for leased van too as his own van is about to die and obviously we have no money to buy one and of course, his business is dependant on it.

We are not looking for fancy vehicles - my current car was the cheapest leasing option available and he will apply for the same for the van. I am an 'essential car user' for my job so no issues there I believe. However I do get mileage expenses which range from about £300 to £50 monthly - does the OR take an average over 12 months or is it just basic salary that it taken into account?

Also, for IPO/A - how do they take self employed income. In reality this last two years, DH has not taken monthly salary but rather just when there was money there to pay bills etc..............do they do it by looking at drawings on accounts?

SomewhereOverTheRainbow

Sadly National Debtline doesn't work in NI - but I do already have appt with CAB already booked.

fermi

Maybe?

Northern Irish residents



Two free, confidential and independent schemes in Northern Ireland are: advice4debtNI, a government funded service offering phone and email advice and AdviceNI, local centers that offer face to face advice and the ability to chat online to an advisor via its 'beattherecession' scheme.

• Link: advice4debtNI
• Link: AdviceNI
• Tel: 0800 917 4607
• Tel: 028 9064 5919
• Opening times: M-F 9am-5pm

SomewhereOverTheRainbow

Yeah saw this, wrote down the number and will call on Monday

Thank you!

SomewhereOverTheRainbow

If anyone can answer my q's esp re using credit cards and maxing them out prior to BR I would be very grateful

Thanks

Ineedaname

If you read Fermi's post #2 he's already answered regarding use of credit cards to pay BR fees.

Regarding your lease vehicle, is there a cheaper option such as purchasing a second hand car to run yourself? Taking on the costs of a new lease just before going BR may not be viewed too well by an OR if you could manage with cheaper vehicle costs. Obviously I don't know your situation so if you can justify the need to an OR then go for it.

Regarding assessing income and expenditure for self employed, each ORs office seems to do it differently. The essentials though are:

Keep the business expenses separate, remember they come out before tax and NI and the BR SOA is about personal income and expenditure only. So you need to keep things very clear and DH's vehicle costs for example, if purely for the business, would not be shown on his SOA as the expenses for it would already have been deducted pre tax.

Your DH will most likely be expected to close his accounts off at BR date and start a fresh set, that means new tax reference and bank accounts too (NatWest offer a Foundation (business) account with 2 years free banking, or he could just open a second BR friendly (personal) account and use that for the time being). I think it's possible that any assets in the business will need to be listed for the OR, however, if he needs ALL those assets to be able to continue trading then he should be allowed to keep them. Pointless the OR taking goods that would stop your other half from earning!

I've seen several members comment that their ORs want quarterly accounts/SOAs submitted for self employed, that might be worth keeping in mind.

SomewhereOverTheRainbow

INAN - (if I can be so familiar) THANK YOU - your reply was very very helpful.

It is good that we can keep business and personal debts seperate as, although we do have business debt it is managable and almost paid off, I was worried that because he is a sole trader they would all be 'bunched' together

Re the car.............I dont have any money to buy one, I do 50k plus mileage a year and am an essential user for work so I think I can 'swing' it.

I have heard rules in Northern Ireland are different that England so need to do more research on that.

Got sent home from work today - have a very high pressured job and boss noticed I wasn't 'on it'.......................she was so lovely, commented I looked terrible and gave me a few 'stress days'. Bless her!

wayforward_2

SomewhereOverTheRainbow wrote: »

Re the car.............I dont have any money to buy one, I do 50k plus mileage a year and am an essential user for work so I think I can 'swing' it.

I'm not sure it's swinging it with the OR you need to worry about as opposed to the leasing company.

I had a leased car when I went BR and the as there was only about 6 months left on the lease the OR agreed I could keep it as an allowable expense - however the second the lease company knew about the BR they took the car back - would not even consider letting me keep it despite never missing a payment.

SomewhereOverTheRainbow

Oh WOW - did the O/R tell them or did you tell them?

Do you mind telling me what company it was?