Would love to be debt free but budget is a nightmare

worried48

Exactly the point i keep making to him - we must have paid the cost of the stored items many times over and would probably be cheaper simply to take them to the tip!

He has accepted the need for a smaller unit downstairs so I suppose that is something. He keeps insisting he wants the storage space to put his books in (boxes and boxes of them which he has not opened since we married 11 years ago and which in any case he cannot lift)

UpToMyNeckInIt

worried48 wrote: »

When I say a nightmare, it's a nightmare to actually work it out. This is because we are self-employed, my husband counts as a sole trader though I am the one who does most in the business as it is my area of expertise not his (he does the paperwork). Consequently it's impossible to say what our income is from one week's end to the next. We have been hit by the recession and our turnover is far lower than it used to be, but there is no way to predict our income with anything like accuracy, and also we can't ever know exactly when we are going to be paid as it depends on when we actually make a sale. Then there is the little detail that some of our sales are to schools and that can mean waiting anything up to three months for payment. Meanwhile our main supplier wants to be paid more and more quickly. We have been struggling all through the recession as a result.

Just recently we got nearly 7k from a PPI claim :j which enabled us to pay off three wholesalers (one of which we owed almost 3k to and had owed that for months, we had been expecting a very nasty letter any day, that is now avoided, my husband's credit rating had not suffered). It has also enabled us to go back to a supplier in China we dealt with in the past but had to cease dealing with due to lack of money. This means there are now some things we can get cheaper than through a wholesaler and they will be better quality too. All good!

I owe around 8k on credit cards (four "bad credit" ones) plus a catalogue and an overdraft. Husband owes 11.5k on a loan, nearly 10k on one card and probably a similar amount on another (he won't tell me how much he owes on that one so it is a guess based on how much he pays them). He has an overdraft of £1200 on one account and £3300 on the business account. We can cover the minimum payments and have not defaulted on any of those at any time. I did have to take out a Wonga loan for five days a couple of months ago when the cashflow was worse than usual. Between us we pay around £1100 a month just on paying back our debts and these debts have gone up and up over the past couple of years.

In addition to the business I get £54 a week DLA, and as a Lay Preacher I sometimes get a preaching fee - this averaged out this year at about £20 a week but will be less next year.

We rent a storage unit which costs us £34 a week and is about three times the size we need. All we have in it, is old stock we can't sell - in the days when we took this unit on, we used to import a lot from China by sea which meant a lot arrived at once. That has not been possible for years. I want to get rid of this unit but my husband will not move the old stock into the house as he says there is too muck junk in here already (this is true but we do have a room it could all go in, if only I could make him do it). I want to try ebaying some of this stuff, cutting our losses, because of the fact that it would save storage costs, but to do that we need to spend quite a lot of time in the storage unit and that is unheated, so it isn't the most attractive prospect. Besides which we are not yet quite over the Christmas rush. However I am determined to do this as soon as the Christmas rush is over with a view to having things on ebay immediately after Christmas when people are sitting online with nothing to do except spend their Christmas money.

Two more slightly unusual things. First, we live in a house that belongs to my father (who never did have difficulty dealing with money!) and we live in it rent free and can treat it as our own. It is very run down, having had no maintenance at all since he bought it in 1980! However it is effectively ours, it will be left to me in my father's will (though I think he has years to go yet) and as they have a nice house themselves it isn't very likely that we would ever have to leave this house even if both parents should end up in a care home. Though I suppose one can never be totally certain about that.

Second unusual thing, I breed cats for a hobby. It costs an arm and a leg. Any of you who think cat breeders make money, think again. Cat food and litter alone cost me around £180 a week :eek: Part of our problem this year has resulted from major medical problems with the cats which meant kittens could not leave, some have just gone last week aged 7 to 9 MONTHS :eek: - and they went for next to nothing because of their age. I now have some here aged between 4 and 5 months who need to be going after Christmas. And yes I also need to reduce the number of adults I have. I have to employ a cleaner which costs me about £35 a week (this varies according to how long she spends here), I am not physically able to clean the place myself. Sometimes I also have to pay someone to do a special clean on the cat pens. Against this I have (in theory) kitten sales and stud fees coming in (also unpredictable, of course)

So, not sure what help I can expect since I can't do an SOA and it is blindingly obvious where the problems are, but at least by posting this perhaps I am making a start.

This is purely my opinion, speaking as an IVA customer, but have you considered an IVA as a possible solution?

Please consider the ramifications before entering an IVA - speak to a few providers to see if it is the right option for you. Remember: It is a form of insolvency, which in turn puts all sorts of restrictions on everything from the ability to open a bank account, or even get a mobile phone on contract.

I only went down the IVA route as I had no real option after an unexpected change in financial circumstances.

By all means seek advice from the ‘charity’ organisations, but most don’t deal with self-employed people (Stepchange will refer you to Grant Thornton for example). Don't be afraid to approach a private firm.

Go to www . iva . com, and contact a couple of well-reviewed Insolvency Practitioners. Many don't charge you anything, and their fees would be paid out of your monthly IVA payment (and agreed by your creditors).

I have a cynical view of the so-called 'independent' charities (Stepchange, National Debtline etc…) - they are all sponsored/funded by the banks/credit companies, and I can't help feeling that was who’s interests they were looking out for when they advised me. They tried pushing me towards a debt management plan (would have taken 10 years to pay off my debt + loads of interest).

Saying all that, I am sure that some private firms will ‘over-sell’ IVA’s to people for whom it may not be the best solution.

The following link to Stepchange, gives a brief ‘iva pros & cons’ guide though which is a useful starting point:

http://www.stepchange.org/Debtinform...osandcons.aspx

You will have to work out your income and expenditure (SOA). Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the CCCS Budget Guidelines Report 2011. Download a copy here:

http://www.insolvency-practitioners....AL%20DRAFT.pdf

I believe these were effective from October 2011, and used in my IVA implemented in August 2012. They may therefore still be current.

It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc if so required.

If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure and subsequently have difficulty. As for stopping creditor payments: best take the advice of your IP.

Equity release (if applicable): Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage / secured loan up to 85% LTV to increase creditor dividend up to 100p in the £. (Subject to the resulting payment being max. 50% of you current IVA payment for affordability reasons). For most, equity release is not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper). But who knows what the economic climate will be like in 4-5 Years time?

Bank Accounts: If you still are in the pre-approval stage, and any of your debts are with your existing bank, you need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA though (no requirement to volunteer such information).

Important to do this before you are on the register, as you will then probably be limited to a handful of basic accounts.

Do not switch to HSBC/First Direct: when they find you on the insolvency register, (which they will), they will make you close your account.

Glad I went the IVA route in the end - can now sleep at night, Hope you get back on track financially soon as well.

Just my opinion though.

worried48

No no, we're not that deep in it yet, besides which we have a much larger PPI claim in which we expect to win although we are having to appeal it (the details husband gave them on the phone were less than half the story, I don't think they would have rejected it if they had all the information, but in any case I think the ombudsman will uphold it) and if we do win it and are in an IVA we would simply lose that money to the IVA. Besides which we do have a profitable business and do not want to jeopardise that.

zanuda

worried48 wrote: »

...He keeps insisting he wants the storage space to put his books in (boxes and boxes of them which he has not opened since we married 11 years ago and which in any case he cannot lift)

Why not to sell the books?!? Books are quite sellable, I think you could do it through Amazon (I buy used stuff there which means somebody is selling it).

worried48

zanuda wrote: »

Why not to sell the books?!? Books are quite sellable, I think you could do it through Amazon (I buy used stuff there which means somebody is selling it).

That's another thing he has been promising to do for about ten years

honey10

I'm really sorry and I don't mean to be rude, but it reads like your husband is the biggest problem of all. It's very sad to read. Can I ask, what type of business it is? Is it something that you could maybe hold a few classes in to raise a little extra on slow weeks?

If it was me, and my husband was being so cagey, and being so difficult/unhelpful, with the books, the storage unit etc, I think I'd be listing his books on eBay and using that money to pay someone to clear the unit.

Also, again, I don't want to be rude, but maybe some organisation system with you husband in the office would help matter, in tray, out tray etc

foxgloves

This all sounds like quite a chaotic approach. If your partner isn't prepared to make some tough decisions on things like the stored items & boxes of never looked at books, you may have to be strong, step in there & make the decision for him. Make a plan which tackles these issues one by one but do it! For instance, getting a dealer to come & look at the books or start putting them on ebay or selling via Amazon could be something you could actually put a date on. i.e We will start it on January the ?? and it will be done by April the ??. Then have the next plan in place, which could be the stored items going on ebay. £35 a week for storage is just throwiing money away especially if you've been doing it for a long time. Have a serious think about how best to tackle the issue of the cats. Make an absolute pledge that you will not be in the same untenable position as this with nothing sorted this time next year. There's that old saying which I've found very apt in terms of my own life, at times, that the "definition of insanity is continuing to do everything the same but expecting different results". All change is difficult at first, my guess is that once you have made really positive inroads into sorting out the first couple of things, you will start to see the benefits. It's starting that's difficult. Also, you are in a partnership, so both partners need to work on the problem as both are ultimately affected if the financial situation gets significantly worse. be strong, & good luck with it.

Maddie57

Hi

You mentioned you were a teacher I think? Would you be able to offer tutoring? It's another way you could make some extra cash, even if you only do it at certain times of the year.

Or could you offer a class for people looking to breed cats/dogs? Can you sell your cats to another breeder so at least you know they would be well cared for?

Maddie

retepetsir

Firstly well done on posting here.

Secondly, lots of good things already said .

I'd suggest selling that old stock asap as the value will only go down, and holding on to old stock/not having a good stock flow/control within the business = bad for business. Much better to cut your losses earlier and get some payback for the items. Out of interest, what kind of items are they?

You certainly don't want stagnant stock!

vasseur

You say your husband is cagey about his debt, is no good with paperwork, you do most of the business, he has stock that he refuses to sell and will not help you around the house and has barely worked in the last 30 years. What exactly does he do??

You have been given loads of good suggestions here but you keep batting them away.

Something needs to give if you are to change your situation. If you always do what you've always done you'll always get what you've always had.