Heavy Debt in UK, non-resident, how to deal with banks?

vidyavaidya

Dear All,

Very nice to find a debt support group!

We'll my story is I have somehow managed to build up way too much debt and finally I am reaching the point I can not furnish it further.

I've built up a debt of over £60,000 on 5 credit cards and two overdrafts totalling £11,000. So total debt is £71,000 as it stands. Business debit to creditors is another £6000 currently. Paying the minimum payment on the cards is £1456.39. I have run an online businesses as a non-resident sole-proprietorship and do not live currently in the UK.

It seemed to all happen very quickly when my online businesses which were doing fairly OK nosedived but I did not cut costs and just used cards and overdraft expecting things to stabilize but they did not. Add into the brew a change in personal circumstance and it just spun out of control.

It's has reached a point where I am not sure I can manage the minimum monthly repayments and keep my business afloat, so I have to speak to the banks at some stage.

I would appreciate advice from all out there.

If anyone can suggest a professional adviser I would appreciate it too.

Vidya

Tixy

Hi

So you are not currently living in the UK? Do you have any assets in the UK?
Is your UK business still profitable and cash generative?
Are you tax liabilities up to date?

You could seek advice from one of the UK debt advice charities for some initial advice on your debts and business.
Although the solutions they may recommend they may not be able to help you with. e.g. if they recommended a debt management plan it may be that they would not administer it on your behalf.

Depending on you future plans and whether you have assets you may want to consider
-bankruptcy
-entering in to reduce repayment plans with the banks and asking them to consider freezing interest (effectively a self-managed debt management plan)
-ceasing payments

The country you are residing may also affect the choice you make, as it is easier for UK creditors to enforce legal action against you in some countries than in others.

vidyavaidya

Firstly thank you dearly for your quick reply. Here are some further answers.

1.Yes 10+ years out of the UK.
2.No assets in the UK.
3.Business is still profitable, it had a very slow year which did not help things but it is slowly recovering and will pick up I am sure.
4.As far as I understand UK tax due to non-residency status is not required so I am not sure if this is relevant?

I would like to pay of the debt when things recover but at the moment I need to put the brakes on expenses to let the business recover so I need an approach to ask the banks to put things on hold until better times come (which they will) and then pay off as fast as I can.

a.Will I be penalised for informing card providers/banks I am unable to furnish minimum obligation for some time? What is the best way to inform them of this.
b.Will it effect my credit rating?
c.If they give a freeze of interest etc. and payments will they then resume it at a higher rate later?

In case my business continues to sink then yes I have to find another way, but I feel if I could stop the card and interest payments as well as penalty fees etc. for some time I can speed up the rebound.

Vidya