Please help with my odd situation

anon43345

I have a fairly odd situation and need to ask some questions that maybe a genuine debt advisor would not want to entertain or answer so here goes my situation.

Quickly put 16000 debt,
Stuck living with family as cant afford to get out whilst paying the credit card repayments.

Separated Father I run a couple of small LEGITIMATE businesses around my daughter to make ends meet (probably works out about £1000 a month ) , I do not claim benefits and have had to move in with family I am not her primary carer but have her everyday for a few hours take her to school pick her up from school etc etc My current system would work fine including keeping maximum time with my Daughter and possibly moving out again with my partner if it wasnt for my existing debt situation. I would be in same situation in a full time minimum wage job except I would loose a lot of time with my daughter who is my NUMBER 1 concern.

Credit card shuffles are fine but the minimum payments on 4 credit cards are causing me a lot of problems at £250 month. plus rent food etc.

This is where my questioning becomes a bit unorthodox and perhaps illegal Im not really sure as I dont feel like I can talk to someone about it, a caring family relative who is more than in the know and caring about mine and my daughters situation, (im not going in to it all here but suddenly loosing her dad apart from weekends would do some severe damage) has made the statement that if I went bankrupt they would keep me afloat (basically to give me a £800 cash present a month once bankrupt) or to give me a £5000 payment imediately to pay off a massive chunk of the debt. What I am worried about is if I pay this £5000 off and my businesses get in trouble and end up having to go bankrupt anyway its £5000 of her money down the pan, I am currently stable at the minimum wage amount mentioned above. Now this money isn't actually mine so its nothing that WOULD get taken off me if I took the bankrupt option but the bankrupt option would obviously mean good bye businesses? is there another route the current repayments are obviously quite a chunk for being on minimum wage if I was to move out. Or should I take the slightly dodgy option of go bankrupt and live for a year (or more) on the ahum present offered.

Tixy

First thoughts....

Your businesses - do they have assets? do they involve you having credit from suppliers?

If you go bankrupt you say you would no longer run the businesses, why would that be? There isn't anything to stop you being self-employed (sole trader) as an undischarged bankrupt.

If you were to move out to your own property and then file for bankruptcy and were able to keep running your businesses then you would perhaps be in a position where you could afford your day to day living costs, including rent etc and perhaps just have a small payment to make to your bankruptcy.

anon43345

The only assets my businesses have is a computer its all digital artwork. I Believed that in a Bankrupt status you were no longer allowed to run businesses and the businesses bank account would be closed is this not true? I went to see CAB without mentioning the dodgy parts of this situation who basically were of no help at all the guy looked like he just wanted to get home.

Pixie5740

anon43345 wrote: »

This is where my questioning becomes a bit unorthodox and perhaps illegal Im not really sure as I dont feel like I can talk to someone about it, a caring family relative who is more than in the know and caring about mine and my daughters situation, (im not going in to it all here but suddenly loosing her dad apart from weekends would do some severe damage) has made the statement that if I went bankrupt they would keep me afloat (basically to give me a £800 cash present a month once bankrupt) or to give me a £5000 payment imediately to pay off a massive chunk of the debt.

Why do you have to become bankrupt before this caring family member would gift you some money? Would it not make sense to gift or lend you £5,000 now so you avoid bankruptcy altogether?

Tixy

You can run a businesses whilst bankrupt (you cannot be a director of a limited company without your official reciver's permission) but you can run an unincorporated business.

You would probably need a new bank account opened after you had been declared bankrupt. How do you customers pay your currently?

You can't have credit of more than £500 without telling the creditor that you are bankrupt, but it sounds like you perhaps don't have credit suppliers in your business.

The official receiver could close down a business if they felt there were signiciant assets that it was worth trying to sell to help pay off your debt, but for a computer that would be very unlikely I would think.

I think this is quite a useful starting point to what is and is't allowed http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=01_bankruptcy#chapter15

Shame you didn't have much luck talking to CAB. Might be worth trying again and seeing someone else - or trying one of the other charities for advice - IMPORTANT - Where to seek professional impartial advice about your debts. Also businessdebtline may be a useful place to talk to as their advice is focussed on small businesses/soletraders.

anon43345

Thanks Tixy for your advice I will do some more research and give businessdebtline a call.

Pixie what your suggesting is mentioned in the exact text you quoted. This was offered Im just finding all available angles.

What is the best debt freezing solution to avoid more interest with the lowest effect to credit rating by the way?

Tixy

anon43345 wrote: »

What is the best debt freezing solution to avoid more interest with the lowest effect to credit rating by the way?

That is a really tough one. There isn't really a way that doesn't affect your credit rating badly.

In theory it would likely be a DMP where your creditors all end up agreeing to freeze interest and don't try to take you to court. Whilst you would still likely end up with defaults on your credit file these are not quite as bad as CCJs and as it is only an informal arrangement it wouldn't have to be declared (on future credit applications/job applications etc). And defaults cannot be seen by a letting agent / tenants credit search (unlike CCJs or bankruptcy/IVA).

But on a DMP there is no guarantee that your creditors will agree to freeze interest, and no guarantee how quickly they will enter defaults on your credit file (the quicker the defaults the sooner they drop off your file).
There is also no guarantee that one of your creditors wouldn't decide to take court action (although it is rare when on a DMP).

anon43345

Thanks againTixy, is this something you arrange yourself or do you need to visit someone to look into/ arrange this? sometimes I wonder if its just easier to go bankrupt and just rid myself of all the stress!

Mr_Mink

NEDCAB have all the templates for a DIY DMP otherwise use one of the free ones. The two biggies are StepChange and PayPlan. Never use one that charges a fee.

If you're curious just give either StepChange or PayPlan a call, they both have nice folk who can talk you through your situation and give good advice.

Sazzie23

Hi, sounds like a complicated lifestyle - but I suspect you'd find quite a few on these boards with complexities that are worsened by debts.


Maybe getting some more income would be the answer here?

Any chance of getting some business advice to
a; avoid going bankrupt
b; increasing profits

I know there are small business schemes about but I don't know much about them sorry.