Not sure where to start

motti

Hello everyone

I've used this site for many years for help buying things, I never expected to need help for the other side..but here I am.

Quick background: My partner and I tried to set up a business (as a partnership) last year, it didn't work out, leaving us with around 20k in debts. She is struggling with depression and anxiety and unable to work as a result. I'm currently working, earning 31.5k, but it's just a six month contract. I'm reasonably confident though about my employability when this ends.:undecided

Because I'm working, she doesn't qualify for benefits.

The biggest debt is our partnership loan, i'm talking to NatWest to see if they'll accept lower payments. I also have a personal loan (about 6k) with HSBC, they've said they won't renegotiate payments until i've made 12(?) payments at the full rate, which means paying the full amount for the next few months, or defaulting and letting it go to collections.

I'm worried Natwest will say something similar, as the loans are roughly the same age.

Meanwhile HMRC are not being friendly about VAT that we still owe from the business, on the grounds that we have some money in the bank (it's the money we're living on, but their view seems to be we have the money and it's not their problem), this is overdue but I haven't reached agreement with them on a time to pay. I suggested 200 a month, they said that I'd also need to make a lump payment upfront before they'd accept that. I'm hoping to stave them off until I know the full situation with the banks.

We are currently living (illegally) in my sister's basement, so paying no rent, bills, or ctax, but need to move out fairly soon as I don't want her to get kicked out of her house for it, and I don't much like sponging. However, to pay rent we'd need a fairly dramatic reduction in our monthly debt payments.

We're living as frugally as we can, more or less. However, there are things coming up that are going to be expensive (and that might be regarded as luxuries) but that we don't think we can avoid. Two weddings abroad of people important to us. And problems in my partner's family that mean she needs to spend some time in Ireland.

Needless to say all of this=relationship troubles, too. But if we did stop living together (this isn't on the cards right now, but I want to think about the possible consequences just in case) she quite literally has nowhere to go.

Right now I'm waiting to hear back from NatWest (they're very slow) while dodging calls from HMRC and reading around for possible outcomes. I'm considering looking into a DRO - although our debts are over 15k, can we between us get one, or two, to cover it?#

Apart from that, I don't have any specific questions right now, but that's probably because at this point I don't even know what to ask about. So any (positive) thoughts are welcome.

I've done an SOA below, it's just rough at this stage as I expect things will be changing soon and I don't have access to all the info right now.

Couple of other things (not reflected in the SOA): I have been claiming working tax credits from when we were operating the business and not turning a profit. We haven't completed our tax return for 2011/12 yet, but I'm hoping that we'll be able to offset losses against my PAYE this year, but until we get that sorted I can't say how much that'll be, or how that will affect my tax credits, which is why they're not included below.

PS this is really long, sorry. If you've read this far, then thank you.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1996
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1996

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 70
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 350
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 240
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 50
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 47
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 220
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 977


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Personal loan..................6000......215.......9
Partnership loan...............17000.....450.......12
Credit card....................1500......50........19
card machine contract..........500.......27........0
various creditors..............200.......0.........0
PAYE owed......................600.......0.........0
VAT owed.......................2500......200.......0
Overdraft......................1000......0.........19
Total unsecured debts..........29300.....942.......-


Monthly Budget Summary
Total monthly income.................... 1,996
Expenses (including HP & secured debts). 977
Available for debt repayments........... 1,019
Monthly UNsecured debt repayments....... 942
Amount left after debt repayments....... 77

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -29,300
Net Assets.............................. -29,300

Created using the SOA calculator at makesenseofcards
Reproduced on Moneysavingexpert with permission, using other browser.

billinghamfan

motti wrote: »

Hello everyone

I've used this site for many years for help buying things, I never expected to need help for the other side..but here I am.

Quick background: My partner and I tried to set up a business (as a partnership) last year, it didn't work out, leaving us with around 20k in debts. She is struggling with depression and anxiety and unable to work as a result. I'm currently working, earning 31.5k, but it's just a six month contract. I'm reasonably confident though about my employability when this ends.:undecided

Because I'm working, she doesn't qualify for benefits.

The biggest debt is our partnership loan, i'm talking to NatWest to see if they'll accept lower payments. I also have a personal loan (about 6k) with HSBC, they've said they won't renegotiate payments until i've made 12(?) payments at the full rate, which means paying the full amount for the next few months, or defaulting and letting it go to collections.

I'm worried Natwest will say something similar, as the loans are roughly the same age.

Meanwhile HMRC are not being friendly about VAT that we still owe from the business, on the grounds that we have some money in the bank (it's the money we're living on, but their view seems to be we have the money and it's not their problem), this is overdue but I haven't reached agreement with them on a time to pay. I suggested 200 a month, they said that I'd also need to make a lump payment upfront before they'd accept that. I'm hoping to stave them off until I know the full situation with the banks.

We are currently living (illegally) in my sister's basement, so paying no rent, bills, or ctax, but need to move out fairly soon as I don't want her to get kicked out of her house for it, and I don't much like sponging. However, to pay rent we'd need a fairly dramatic reduction in our monthly debt payments.

We're living as frugally as we can, more or less. However, there are things coming up that are going to be expensive (and that might be regarded as luxuries) but that we don't think we can avoid. Two weddings abroad of people important to us. And problems in my partner's family that mean she needs to spend some time in Ireland.

Needless to say all of this=relationship troubles, too. But if we did stop living together (this isn't on the cards right now, but I want to think about the possible consequences just in case) she quite literally has nowhere to go.

Right now I'm waiting to hear back from NatWest (they're very slow) while dodging calls from HMRC and reading around for possible outcomes. I'm considering looking into a DRO - although our debts are over 15k, can we between us get one, or two, to cover it?#

Apart from that, I don't have any specific questions right now, but that's probably because at this point I don't even know what to ask about. So any (positive) thoughts are welcome.

I've done an SOA below, it's just rough at this stage as I expect things will be changing soon and I don't have access to all the info right now.

Couple of other things (not reflected in the SOA): I have been claiming working tax credits from when we were operating the business and not turning a profit. We haven't completed our tax return for 2011/12 yet, but I'm hoping that we'll be able to offset losses against my PAYE this year, but until we get that sorted I can't say how much that'll be, or how that will affect my tax credits, which is why they're not included below.

PS this is really long, sorry. If you've read this far, then thank you.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1996
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1996

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 70 if these aren't on contract can they be reduced
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 350 This can be cut, batch cooking etc
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 240
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 50 can you pay for a yearly prescription card around £100 a year and you can pay by dd.
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 47 why are you paying this if you live at your sister's?
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 220 this needs to be cut you need to find some cheaper things to do.
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 977


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Personal loan..................6000......215.......9
Partnership loan...............17000.....450.......12
Credit card....................1500......50........19
card machine contract..........500.......27........0
various creditors..............200.......0.........0
PAYE owed......................600.......0.........0
VAT owed.......................2500......200.......0
Overdraft......................1000......0.........19
Total unsecured debts..........29300.....942.......-


Monthly Budget Summary
Total monthly income.................... 1,996
Expenses (including HP & secured debts). 977
Available for debt repayments........... 1,019
Monthly UNsecured debt repayments....... 942
Amount left after debt repayments....... 77

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -29,300
Net Assets.............................. -29,300

Created using the SOA calculator at makesenseofcards
Reproduced on Moneysavingexpert with permission, using other browser.

I've added some comments which might help you reduce costs.

jumperjohn

No mortgage or home? I think you'd be ideal for bankruptcy. It's a tough choice but this would free you and your family. The offset to this of course is your credit is almost nil for six years, but this goes quickly.

motti

Thanks for reading, and the advice. Just to respond to your points:

Phones: These are contracts, both with a good way to run yet.

Contents insurance should perhaps have gone in debts - they're outstanding agreements for insurance on our old flat, and retail property.

Medical: I remember my partner had a prescription card before, maybe that still applies. This sum includes lots of non-prescription things though, like painkillers, nytol, gaviscon, etc etc that she needs. Perhaps it's not this much on average, I don't really know.

Groceries/Entertainment: I've lumped everything else in here, for both of us. I agree we can bring these down further if we have to, although talking about this with her is rather difficult. Still, I don't think 70 a week on groceries for two people could be considered excessive - could it? Entertainment is the £25 a week cash each we allow ourselves to buy whatever things don't fit in the budget elsewhere. The occasional office lunch when circumstances dictate. Yes, the occasional pint!

I can of course forgo beer if it comes to it. I'd be interested to hear what people/courts consider 'reasonable' living expenses for two people in this context.

motti

Oh one more thing to add: my contract of employment has a clause in it that says they can terminate it if I make any arrangement with my creditors... I don't think they'd enforce it, I don't see why it'd be in their interest, but it does rather scare me.

motti

jumperjohn wrote: »

No mortgage or home? I think you'd be ideal for bankruptcy. It's a tough choice but this would free you and your family. The offset to this of course is your credit is almost nil for six years, but this goes quickly.

I had been wondering about it, as we have very little to lose. However, I do want to run a business again some time in the future and want to salvage my credit rating if I can

billinghamfan

motti wrote: »

Thanks for reading, and the advice. Just to respond to your points:

Medical: I remember my partner had a prescription card before, maybe that still applies. This sum includes lots of non-prescription things though, like painkillers, nytol, gaviscon, etc etc that she needs. Perhaps it's not this much on average, I don't really know.

If your partner does have prescription card you may be able to get the doctor to precribe painkillers, nytol etc therefore you won't pay any more. It is possibly a good idea to check with the doctor if these things should be taken with other drugs.

Groceries/Entertainment: I've lumped everything else in here, for both of us. I agree we can bring these down further if we have to, although talking about this with her is rather difficult. Still, I don't think 70 a week on groceries for two people could be considered excessive - could it?

Alot of families can live on £200 for all groceries, while £70 isn't 'excessive' it can be cut, with a little bit of planning and at the moment you need all the extra money.

Entertainment is the £25 a week cash each we allow ourselves to buy whatever things don't fit in the budget elsewhere. The occasional office lunch when circumstances dictate. Yes, the occasional pint!

Try using a spending diary I couldn't believe how much I spend on coffees and magazines which were just a couple of pounds here and there.

I can of course forgo beer if it comes to it. I'd be interested to hear what people/courts consider 'reasonable' living expenses for two people in this context.

I'm not trying to be unkind just trying to point out ways of saving.

motti

billinghamfan wrote: »

I'm not trying to be unkind just trying to point out ways of saving.

Oh, I didn't take it unkindly at all - sorry if I sounded defensive. It's actually good to be told yes, we can cut it back, because I am facing resistance at home on top of my own natural reluctance to eat cheaply. And I know it's possible to live on next to nothing if you like lentils (which we do!) but I really would like to know what a court/insolvency practitioner/equivalent would consider reasonable when working out how much we can afford to pay.

Re: the spending diary, not to beat about the bush, I know for a fact that this week (the first week we're trying this budget) nearly all of my £25 went on beer. I wouldn't normally go out as many times in one week though, it's just when people happened to be free.

I am actually considering officially giving up alcohol entirely, as I think it's easier for people to understand than refusing to buy another round.. FWIW I already gave up buying coffees out, and that really was a wrench (our business was a cafe and we took our coffee very seriously).

billinghamfan

I have ground coffee and a plunger thing at work as I can't bear instant but love coffee. I spend less than £3 on coffee per week so it saves a fortune.

motti

Luckily for me our office has a free bean to cup machine, not the best but it does the job. Now if only they'd install a couple of real ale handpumps, I'd be sorted.

motti

If anyone is reading this and has the same question about reasonable expenses, I found this guide useful: cms.dataserve.com/Documents/7a7d7966aa4e4bf2a0a9a5b9f6a52400.pdf

It gives suggested amounts that a receiver would accept for household outgoings.

For a couple, it allows £300 for groceries. Some things I'd include in my groceries budget are separate (e.g. petfood, laundry). Adding up what it allows for groceries, entertainment, pets, laundry, newspapers, TV, work lunches, clothing, haircuts, and 'sundries', gives £523 - not so far off what we've budgeted ourselves between groceries and entertainment in the SOA.