IVA or bankruptcy for £111k debt?

debtproblems2013

Hi,

For nearly 10 years I have run my own business and unfortunately the company is now due to be liquidated.

Once the liquidation has been processed the personal guarantees that I have signed will be enforceable (approximately £81k). This will increase my unsecured debt to £111k.

In 2008 I purchased an industrial unit in my own name and rented it to the company. The unit is currently being rented out on a tenancy agreement awaiting a lease, unfortunately the difference between the mortgage and the rent is £333 a month outstanding. If I sell the property or want to renegotiate the mortgage a break fee of £31k would become due. The unit has a 2nd charge over my home of £70k, in the event of shortfall.

All the debts are in my name, but the 2nd charge covers both the wife and I. If we sell the unit the 2nd charge will be removed as long as we repay the mortgage in full and then pay the break fee.

My credit rating is very good at moment, never missed a payment. But this won’t last and I would rather start the process of bankruptcy or an IVA rather than wait.

One of the trade creditors with a personal guarantee has started a CCJ.

I only have between £125 - £200 a month to pay back the debts.

fiveyearplan

Hi and welcome! Have you spoken to Business Debtline? In the event of your business failing do you have a back up plan to support yourselves ie does you wife work?

Do you have equity in your home?

debtproblems2013

The company is no longer trading.

Yes I've spoken to the Business Debtline a couple of months ago and we tried a CVA but that wasn't successful.

There is £30k equity in the unit which would be wiped out by the break fee.

The home has around 80k equity split between the wife and I, which is unavailable due to the unit.

I have new employment, the wife no longer works.

Bella_Smythe

does anyone know how long it take for a BS to repossess a house if you stop paying the mortgage? we are in negative equity (and a whole lot of other debt besides) and have tried to put the house on the market but not been able to because of this. it wouldnt sell anyway in all likelihood in the current climate.
The BS we are with is The Leeds. anyone have any experience of this?

luvchocolate

Hi in my experience 6 months of missed payments went legal repo 4 months later....so 10 months in all,
hope that helps x

CB1878

Has a similar position to the OP a couple of years ago, fortunately the business we managed to just keep going and we have turned the corner. I really do know how lucky I was that the market we were in did start to accelerate, and it really was not down to anything we did different. Like anyone else we just worked hard and we were fortunate enough that things have come right, many people are not so lucky. Downside is I cannot offer you any pearls of wisdom other than say I really do feel for you and hope you can get things sorted