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pablodiscobar

Hello,

I am looking for some advice.

In a bit of a bad way as it stands, Around 2 years ago I bought a franchise which has been a disaster. At the end of December I am going to be totally out of money.

I will have to close the ltd company, The only things the company pays out each month is a business BT landline and mobile along with a bank loan. The bankloan is £170 a month and the phones cost approx £40 each.

On a personal level is where things get difficult. I have 2 personal loans, 1 with Sainsburys, 1 with Tescos and a credit card which I borrowed on to put money into the business.

My debts on the above are over £15,000

I am considering declaring bankruptcy as, like i say, come the end of December I will not be able to pay anything.

Of course I am looking to get into work ASAP, applications go off every day but i`m in a position where I am over qualified for lots of roles I am going for and I just feel I am not going to get anything in the short term. Basically I have no income what so ever.

I am married and have a mortgage on a house. I own a car, but its over 11 years old and not worth a lot - if anything.

My wife is a teacher and able to meet the mortgage repayments so whilst I am not worried about paying the mortgage I am extremely worried about the consequences of going bankrupt. When purchasing the house a declaration of trust was put in place through a solicitor as my wife had equity from a previous property. Because of this I am hoping that my bankruptcy, if I went down this route would not affect the house.

At the time of the declaration of trust being put in place we were not married but are now, does this change anything?

The declaration of trust states that;

We jointly purchased the property in 2008
We paid £317,000
Paid incidental costs of £11,086
Obtained an advance of £180,970 from and mortgaged the property to Abbey National
Are beneficial tenants in common.

It goes on to say that my partner (now wife)

Paid £ 135, 730 towards the purchase price
paid £ 11,068 towards the incidental purchase costs
Will pay 50% of the Mortgage payments
will receive the first £11,068 of sale price
will receive 71% of the remainder of the sale price.

Section 3 states that I

Paid no monies towards the purchase price
Paid no monies towards the incidental purchase costs
Will pay 50% of the Mortgage repayments
Will receive 29% of the remainder of the sale price

The mortgage has only been on an interest only payment method, as such, seeing as I put nothing into the house etc would the receiver try and sell the house to recover my personal debts? Other than the car I have no other assets other than a playstation 3.

Don`t really know what I`m doing with all of this, I am going to arrange a meeting with Citizens Advice and ring Step Change today

Thanks for any help/advice

StepChange_James

pablodiscobar wrote: »

Hello,

I am looking for some advice.

In a bit of a bad way as it stands, Around 2 years ago I bought a franchise which has been a disaster. At the end of December I am going to be totally out of money.

I will have to close the ltd company, The only things the company pays out each month is a business BT landline and mobile along with a bank loan. The bankloan is £170 a month and the phones cost approx £40 each.

On a personal level is where things get difficult. I have 2 personal loans, 1 with Sainsburys, 1 with Tescos and a credit card which I borrowed on to put money into the business.

My debts on the above are over £15,000

I am considering declaring bankruptcy as, like i say, come the end of December I will not be able to pay anything.

Of course I am looking to get into work ASAP, applications go off every day but i`m in a position where I am over qualified for lots of roles I am going for and I just feel I am not going to get anything in the short term. Basically I have no income what so ever.

I am married and have a mortgage on a house. I own a car, but its over 11 years old and not worth a lot - if anything.

My wife is a teacher and able to meet the mortgage repayments so whilst I am not worried about paying the mortgage I am extremely worried about the consequences of going bankrupt. When purchasing the house a declaration of trust was put in place through a solicitor as my wife had equity from a previous property. Because of this I am hoping that my bankruptcy, if I went down this route would not affect the house.

At the time of the declaration of trust being put in place we were not married but are now, does this change anything?

The declaration of trust states that;

We jointly purchased the property in 2008
We paid £317,000
Paid incidental costs of £11,086
Obtained an advance of £180,970 from and mortgaged the property to Abbey National
Are beneficial tenants in common.

It goes on to say that my partner (now wife)

Paid £ 135, 730 towards the purchase price
paid £ 11,068 towards the incidental purchase costs
Will pay 50% of the Mortgage payments
will receive the first £11,068 of sale price
will receive 71% of the remainder of the sale price.

Section 3 states that I

Paid no monies towards the purchase price
Paid no monies towards the incidental purchase costs
Will pay 50% of the Mortgage repayments
Will receive 29% of the remainder of the sale price

The mortgage has only been on an interest only payment method, as such, seeing as I put nothing into the house etc would the receiver try and sell the house to recover my personal debts? Other than the car I have no other assets other than a playstation 3.

Don`t really know what I`m doing with all of this, I am going to arrange a meeting with Citizens Advice and ring Step Change today

Thanks for any help/advice

Hello,

Thanks for posting.

I think that getting advice from us and the CAB is a good idea. They'll be able to take stock of your situation and give you in depth advice about the available options.

From what you've said it sounds like the property would be unlikely to affected by bankruptcy, but the CAB should be able to give you a more considered legal opinion on how the Delcalartion of Trust is dealt with in bankruptcy.

In terms of how to deal with these debts, bankruptcy is quite a long term solution and if you're hoping to get back into paid employment reasonably soon it could be better to make very small reduced payments to your debts on a temporary basis, then review things then.

I don't know nearly enough about your circumstances to say this with any confidence though, so I'd see what advice you get from us at Stepchange and the CAB to see what solution makes most sense for you.

Kind regards

James

p.s. you can find our contact details by clicking the links in my signature below

crazy80_2

Hello
Please help with decision.Take home 1150£ every m. expenses there is not much to cut off (including college fee) 1070£ every m.Debt 2000£ overdraft
1700£ credit card all with Lloyds tsb.Can`t get the personal loan even my c.score is 962(one neg.factor-using overdraft and c.card continuously for more than 12 months).
Have no clue about shifting c.cards is there any way to freeze debt fee using c.card 0% balance transfer?Need +-12 months break to recover .
Any help appreciated.
Reg.Rob

PaulieB

Hi there,

Really need some help, my financial situation has spiralled out of control due to 3 redundancies in two years which has seen me keep my head above water (just), but is eating all of my available cash.

Total debt is around £6500 and it has got to the point where I'm robbing Peter to pay Paul. I'm off work with depression, stress and anxiety as things got too much the other week and I considered just ending it.
Thankfully, through help from my Doctor, I'm on the road to recovery but my credit rating is abysmal, I have no assets but I am working full time.

It's been put to me to sign up with a Debt Management Company and having spoke to a couple, they seem more interested in earning money out me than really assisting me and adding to my debts.

I can afford to repay £300 a month and be able to then deal with all my other bills and continue to live a normal life, so I could really do with some help here guys.

Additionally to this, Santander currently owe me over £6k in PPI monies (they repaid £3,800 in March) and Barclaycard also owe me over £1k and chasing these two has had a detrimental effect on my health.

Any assistance would be gratefully and urgently needed.

StepChange_James

crazy80 wrote: »

Hello
Please help with decision.Take home 1150£ every m. expenses there is not much to cut off (including college fee) 1070£ every m.Debt 2000£ overdraft
1700£ credit card all with Lloyds tsb.Can`t get the personal loan even my c.score is 962(one neg.factor-using overdraft and c.card continuously for more than 12 months).
Have no clue about shifting c.cards is there any way to freeze debt fee using c.card 0% balance transfer?Need +-12 months break to recover .
Any help appreciated.
Reg.Rob

Hi Rob,

Thanks for getting in touch. If you're struggling to qualify for loans then I'd suspect that you'll also find it hard to get a 0% credit card deal too.

Some people use 0% deals to shuffle their debts and to keep the interest low. However, lots of people try this strategy thinking it's a wise move but end up getting deeper into debt as a result. So it might not be such a bad thing that this isn't an option.

It sounds like your finances are quite finely balanced at the moment. I'd recommend that you get in touch with us for some in depth money advice. If you're in a situation where your payments aren't affordable we can advise you on the ways you can get payments reduced and ask creditors to freeze interest and charges.

The first step is to go through our online Debt Remedy advice tool, which will guide you through making a budget and then give you recommendations tailored to your circumstances. Here's the link: http://www.stepchange.org/msehelp.

I hope this helps.

Kind regards

James

StepChange_James

PaulieB wrote: »

Hi there,

Really need some help, my financial situation has spiralled out of control due to 3 redundancies in two years which has seen me keep my head above water (just), but is eating all of my available cash.

Total debt is around £6500 and it has got to the point where I'm robbing Peter to pay Paul. I'm off work with depression, stress and anxiety as things got too much the other week and I considered just ending it.
Thankfully, through help from my Doctor, I'm on the road to recovery but my credit rating is abysmal, I have no assets but I am working full time.

It's been put to me to sign up with a Debt Management Company and having spoke to a couple, they seem more interested in earning money out me than really assisting me and adding to my debts.

I can afford to repay £300 a month and be able to then deal with all my other bills and continue to live a normal life, so I could really do with some help here guys.

Additionally to this, Santander currently owe me over £6k in PPI monies (they repaid £3,800 in March) and Barclaycard also owe me over £1k and chasing these two has had a detrimental effect on my health.

Any assistance would be gratefully and urgently needed.

Hi Paulie,

It sounds like you've had a really tough time lately. I'm really pleased that you've been able to get some help and you're now heading in the right direction.

As much as finances can be stressful, your health is always more important.

It can be hard to know where to turn to get advice and we often hear similar stories from people that have tried to get help from the fee-charging debt advice companies. The charity I work for, StepChange give free and impartial advice about how to deal with debts. Or if you'd like a second opinion any of the organisations listed here should give you good advice: http://www.moneysavingexpert.com/loans/debt-help-plan#help.

I'd recommend you give our Debt Remedy advice tool a go: http://www.stepchange.org/msehelp. It'll help you build up a budget and work out what options you've got available.

If the budget you work out with us is the same as the one you've done yourself then I'd hope the £300 a month you've got available to be enough to get agreements set up with these companies and you can start bringing them down.

The PPI claims could definitely help things further but if you're finding it too stressful to chase them up then it may be worth leaving that for a little while. If you're feeling up to it then there's lots of good advice on this page: http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance.

I hope this helps but please post again if there's anything else you'd like to know about.

Kind regards

James

happybunny86

Hi,
I'm not sure if I'm posting this in the right place but wanted to get a bit of advice. I've just come off my debt management plan - I have a final payment to pay off next month and its clear. I do have another debt of ~£1,500 which I'm also paying off and expect this to be gone by May next year. I've been burying my head in the sand about that debt unfortunately and didn't roll in to the plan.
I applied for a new basic bank account yesterday with another bank other than mine as my current bank is the cooperative and their customer service isn't that good and they don't have a branch in the city I work in. I was turned down for the basic bank account which was a new low for me.
I'm going to read through all the advice on this forum now as to how to clean up my credit rating. My boyfriend and I would love to buy our own house in the next two years but I really don't know if i'm going to be able to get my credit rating in a good enough state to be able to do this.
I'd love any additional advice on cleaning it up and to hear of any real life example of if its possible to get a mortgage in that time.
Thanks in advance

happybunny86

Hi,
I'm not sure if I'm posting this in the right place but wanted to get a bit of advice. I've just come off my debt management plan - I have a final payment to pay off next month and its clear. I do have another debt of ~£1,500 which I'm also paying off and expect this to be gone by May next year. I've been burying my head in the sand about that debt unfortunately and didn't roll in to the plan.
I applied for a new basic bank account yesterday with another bank other than mine as my current bank is the cooperative and their customer service isn't that good and they don't have a branch in the city I work in. I was turned down for the basic bank account which was a new low for me.
I'm going to read through all the advice on this forum now as to how to clean up my credit rating. My boyfriend and I would love to buy our own house in the next two years but I really don't know if i'm going to be able to get my credit rating in a good enough state to be able to do this.
I'd love any additional advice on cleaning it up and to hear of any real life example of if its possible to get a mortgage in that time.
Thanks in advance

StepChange_James

happybunny86 wrote: »

Hi,
I'm not sure if I'm posting this in the right place but wanted to get a bit of advice. I've just come off my debt management plan - I have a final payment to pay off next month and its clear. I do have another debt of ~£1,500 which I'm also paying off and expect this to be gone by May next year. I've been burying my head in the sand about that debt unfortunately and didn't roll in to the plan.
I applied for a new basic bank account yesterday with another bank other than mine as my current bank is the cooperative and their customer service isn't that good and they don't have a branch in the city I work in. I was turned down for the basic bank account which was a new low for me.
I'm going to read through all the advice on this forum now as to how to clean up my credit rating. My boyfriend and I would love to buy our own house in the next two years but I really don't know if i'm going to be able to get my credit rating in a good enough state to be able to do this.
I'd love any additional advice on cleaning it up and to hear of any real life example of if its possible to get a mortgage in that time.
Thanks in advance

Hello,

Thanks for posting.

I think your other post in the main forum will probably get more attention than this one, as this thread tends to be more people asking questions and us answering them.

Having said that, I think you'll struggle to find any better advice than you can get on this page: http://www.moneysavingexpert.com/loans/credit-rating-credit-score#improve about improving your credit score.

The idea of basic bank accounts is that they should be available for everyone, so it's a bit odd that somewhere turned you down due to your credit rating. A lot of banks will try to push you towards taking out a harder to get account, so it's important to be firm about the kind of account you'd like. There's more information about them here: http://www.moneysavingexpert.com/banking/basic-bank-accounts.

I think clearing the remaining debt you've got will be the biggest single thing you can do to improve your credit rating. Once that's out of the way you can start to look to make little improvements here and there.

As time goes by your credit rating will start to get better on its own because negative information drops off 6 years after it's entered.

In terms of mortgage applications, a shabby credit rating can affect your ability to get a mortgage but there are other lots of other factors too, which can help pull you up. For example, a bigger deposit means that the mortgage companies are generally more willing to lend to people.

I hope this helps.

Kind regards

James

1RandomMind

StepChange_James wrote: »

Hello,

Thanks for posting. The first thing I'd recommend doing would be to read this article that we published today about statute barred debts: If it's more than six years since you made a payment then there's a chance this debt might be unenforceable.

I'll answer your questions using the same numbers as you, assuming that the debt is still enforceable:

1. 10% is a small amount to pay as a settlement but if the account is very old and they've not heard from you for a while then some companies are willing to offer big discounts.

2. It's down to the company but I think there's a reasonable chance they'd be willing to negotiate. They may offer the same deal again, be willing to go even lower or not want to negotiate at all.

If you do agree a settlement I'd strongly recommend getting any deal confirmed in writing before you send over any payments.

3. It sounds like you've read up on DROs and there's a possibility that you might qualify. Variable incomes and one off payments can impact on eligibility for DROs but don't always rule them out.

I'd recommend using getting in touch with us for more in depth advice to get a firm answer on this one:

4. A DRO is a form of insolvency and would be registered on your credit file for six years - during that time people who check your history will see that you've had trouble with debts. So this isn't great for your credit history.

Settlements are a bit more complicated. Often companies will report that the debt has been partially settled to your credit rating, which will show you've come to an arrangement over the debt.

However I've heard of people having different information reported to their credit history following a settlement, so it's probably best to discuss it with company first.

If the debt is statute barred then there's a good chance it won't be showing on your history at all.

Hope this helps.

James

Cheers James,

This has helped a great deal, and opened up some more questions.

I'm going to get my credit rating (off the Noddle link) when they fix their technical issues. In the mean time, I was hoping some could answer a few questions.

Its been 7, if not 8 years since I have made any payment on this debt, so I would think this makes it Unenforceable, right?

The company chasing the debt has offered me to pay 5% writing off the 95%.

If the debt is now unenforceable, what does that mean to my credit rating if I have a statute barred debt on it, compared to if I take the deal and get it written off? Even if its written off as a 'Partially Settled'.

Could I request from the debt company a 'type' of settlement if I was to take the offer. Thus bettering my position in rebuilding my credit?

Cheers again