Bit of a mess

thewayne

Hello Every one,

I have been reading these forums for a while.

I have run my own business for the last few years and all was looking good. I had some credit cards in the business that were getting paid off (mistake on my part using them but started using them a few years ago when I was Naive.)

Then last year we had a few major problems which have sent the business under and left me with some very hefty bills to sort out (around 30k).

I have taken advice on all the options and still dont knwo which one to take.

I am lucky enough to have a job, it dosnt pay great with 16 hour days but it is a good job and fulfilling.

After bills etc I am left with very little.

I have offered a dmp for £120 which is doable and has been accepted by 2 creditors, one has declined.

The next step is and IVA, and if that dosnt work I will have to look at bankruptcy.

I am also fortunate enough that I can get self employed work fairly easily ( I was pretty good at what I do).

I want to pay my debts off (I havent had any benefit from the debts unfortunately) but unsure whether I should put myself under further strain if it is just taken In one of the plans (I will always be a workaholic).

How do they look at self employed work in each situation? I dont want to start building it up, work stupid hour thinking I may get a holiday if it just goes towards my debts (again I want to pay these but havent had a holiday in years and would like to treat the family after working long hours for years).

Im not in any formal plan yet, but seems no matter which way I turn I am pretty stuffed at the moment. If I make more money self employed do they look upon this as trying to pay my debts off as well as make a small bit for my family, or will they take it all.

At this moment I am unsure how much the self employed work can make me, but over time it may even be enough to cover the min payments on the card and a bit more, but may take a while to get their (the min payments alone are over 1.5 times my salary).

Thanks for any thoughts on this trying to get all the info before making a massive decision.

debt_doctor

thewayne wrote: »

I have taken advice on all the options and still dont knwo which one to take.

.

Hi, this is the one decision that you alone can take. In an effort to help you I will summarize your options;

Pay in to a DMP - Flexible, not legally binding on either side, make sure interest and charges are not being added and the debt is actually going down. If it fails then you still have insolvency options.

IVA- it seems you have no assets to protect and are not in a career where you can't go BR, so I'm not sure why an IVA would be chosen. IVAs can fail and bankruptcy is often the result (forced BR or othwerwise.)

In a BR or an IVA, any surplus income will be taken in the form of monthly payments; In an IVA the payments will last 6 years, and with BR 3 years.

The key factor in an IVA is that you can exclude certain assets from sale - almost always the family owned / mortgaged home - but it seems you dont need this fundamental protection?

In an IVA or BR other future assets, winfalls etc can be claimed during the undischarged period of BR - usually 1 year or in an IVA for up to 6 years.

All will damage your credit rating and will be on your credit file for 6 years.

I see them as the main points.

edit; I'm also wondering if the business was as a sole trader or a limited company - advice if it were a limited co. would be entirely different to the above.

DD

thewayne

Hey Debt doctor.

The business was a limited company, but it was using my personal credit cards (hindsight is a wonderful thing).

And you are correct I have no assets as all, we have 2 cars which I need for my new work and my other halfs work.

I have started with the DMP and started first payments. My hope is that I earn enough over a period of time to actually pay off the cards in full quicker than It would take on an IVA / bankruptcy, but that may well be wishful thinking.

Which ever way I look I am in a bit of a mess.

What dosnt really make sense to me is the fact in a bankruptcy they take all the income into account.

My new work pays me enough to live, but I enjoy doing self employed work and I earn OK from it. But if I went bankrupt It would be stupid to put myself under further strain.

Where as in a DMP I can earn more, and hopefully start knocking the debts on the head one by one, so I really hope I dont end up bankrupt as I actually love working and my new job etc, but a bankruptcy would just restrict me.

So I think I agree that DMP is first port of call, I hope it works out as I dont think I could handle bankruptcy.

Thanks very much for your help and if you have any more advice im all ears as things are tough, I know there will be light at the end of the tunnel some where, but I have been through hell and back and now seems like a new one is starting (but at least I have made the move now!)

debt_doctor

As you have chosen a DMP as right for you then you need to decide whether to set this up yourself or get a company to 'manage ' it for you. (subject to a monthly fee).
I prefer the former, you keep in control and there is no fee, just set up standing orders to each creditor - but you might choose to go with a Payplan or Stepchange arrangement.
Which ever you choose, make sure you keep an eye on interest and charges being stopped.
Later in your DMP, debts will be sent to 3rd party collectors (may have already happened) - and reduced settlement offers of 50% ish may well come your way.
DD