Bank closing account & cancelling loan & C Cards

Magicboo

Hi,
Please could you give me advice for my DH.
He runs his own business (he is Joe Bloggs, trading as blah blah, if that helps) and has got himself into a right state with money.
with Natwest he has:
Business account
Personal account
Loan
Credit card
I don't know how many charges he has had or payments to the credit card he has missed (he says he hasn't missed any payments on the loan) but they phoned him last week & told him they want to stop dealing with him as of June (not sure of the exact date). I understand they can do this, and I am now trying to help him pull his head out of the sand and have the "lightbulb moment" so we can sort it all out.
He is making an appointment to go and see the bank and has also been in contact with the CAB who have given him a phone number to call (think it might be National debt helpline?).
Please can you give us some advice as to what to say to the bank? I don't know what his options are. He doesn't have any assest to speak of, no house, car on HP, a few bits of stock for his business. If I need to provide more info, please let me know.
I will be back here soon for help on the whole debt situation, I'm working on his SOA at the moment, but need help sooner for the bank meeting.
Thank you in advance.

Tixy

Does he have an overdraft on either of the bank accounts?

Does he have a balance on the credit card that he is unable to repay?

Or is the loan the only debt?

Possibly business debtline phone number that CAB have given him.
Are you doing a personal SoA for him, or a business one? or both?
When doing the SoA worth asking him what other debts he has from the business, in particular any to HMRC.

Magicboo

Thank you for replying.
He has £3k OD on both bank accounts,
£3.5k on the credit card and I'm not sure how much on the loan, I think about £6k. He doesn't have any way of paying them all back immediately.
I thought I would do an SOA just for him, as it is a business, although I appreciate he has to put money into his personal life too!
I believe he has no debts with HMRC, he has paid his tax for this year but he may have a small NI payment to make. I will check and make sure we include it in the SOA.

[Deleted User]

One of the best bits of advice I was given when I started up my own business was to make sure I didn't have my personal accounts at the same bank as the business accounts - just in case! Every time I went in to pay in money the cashiers would ask me 'do you have a personal account with us? Would you like to speak to someone about getting one?' I just smiled and said no thanks.
When I had to put my business into liquidation I was extremely relieved that I hadn't muddled my finances. It made things much easier to deal with.
If you OH can do so, I suggest he opens a new personal bank account at another bank asap

Magicboo

Thank you, he has just opened a bank account with a different bank & he's speaking to his Natwest bank manager on Monday (BM is on holiday this week!).
I now have all his debts (nearly £40k ) so am about to start on his SOA.
Gulp.

[Deleted User]

bankruptcy maybe?

Magicboo

He keeps saying bankcruptcy, but surely it should be a last resort?
Also, could he be self employed if he was bankcrupt? Doesn't he lose any right to credit from suppliers etc?
We haven't completed his SOA yet, but of the debts he has, £4k was borrowed from me and £7.5k is on my credit cards (I know, what an idiot :embarasse) and £10k is borrowed from a friend (on a proper loan agreement) and he wouldn't want to not pay his friend back, so the bankcruptcy would only get rid of £18.5k of the debts. Surely it's not worth going bankcrupt for that?

DevCoder

If you are going bankrupt then you have to treat all your creditors fairly, this means you cant choose what is in or out of the BR.

Tixy

Is he in debt because his business isn't viable? is it making losses that he is propping up with personal debts? And if so would he be better looking for employment instead?

Or is his business making reasonably profits but just that he is overspending personally?

I suppose its worth considering everything (including bankruptcy) but you also need to see what alternatives there are, how much he could realistically start paying back to these debts and how long it will take him to repay this level of debt, and whether his creditors will be happy with that.

Magicboo

I asked him over the weekend whether he thought the debt was due to not being viable or bad spending, he thinks it is a combination of both-last year he had some back luck (not making excuses, honest!) last year with a builder he hired to help him whose work was shoddy & then disappeared and as DH was in charge of the jobs, he had to pay for the work to be repaired, which did affect his finances very badly. Because of this, I'm willing to give him the benefit of the doubt for the moment & try & keep the business going.
He is also going to phone a company we have found looking for self-employed part time workers today to see if he can get any work there to supplement his income to give him a stable monthly income.
Could someone tell me-if he went bankcrupt, would he be able to carry on being self employed?
Also, do you know if how open banks are to halting interest on debts and sorting a smaller monthly payments if it meant they would be more likely to get everything back?

Tixy

Magicboo wrote: »

Could someone tell me-if he went bankcrupt, would he be able to carry on being self employed?

He could carry on with his self-employment business if made bankrupt, but would likely only be able to get a basic bank account which people can find difficult when self-employed.

He'd likely also not be able to have credit accounts with his main suppliers etc so would have to pay for goods upfront.

Any tools of the trade and a low value vehicle if used for the self-employment would likely be exempt from the bankruptcy.

If he is considering bankruptcy then he needs to speak to one of the debt advice charities for some detailed advice.

Magicboo wrote: »

Also, do you know if how open banks are to halting interest on debts and sorting a smaller monthly payments if it meant they would be more likely to get everything back?

Many banks will be prepared to freeze interest on debts, if they can see that the debtor cannot afford the contracted repayments, is paying all they can afford and is treating all creditors fairly.
Again a debt advice charity can best advise on this and how to best demonstrate this to his creditors and to consider a managed DMP with one of the charities.