Help with my situation

krazyk

Hi there,

My contract job is coming to an end, after nearly 4 years. I'm desperately looking for a new job but feel that contract jobs are drying up in the wake of this new opex/capex law in regards to contractors. The company I've been working for have cut contractors by the ton in the last 2 months and I've heard the same with bank firms etc. It's very likely that, for me, nothing will come up until April (i.e. the new FY). There is talk of more cuts in contractors in my sector but also new projects to start in the new FY.

If I don't find a job before the start of October then of course I'll sign on. I live in a privately rented house (no car, no savings and just me) so benefits will probably be low. Then I'm going to take the time to get on eBay and sell of lot of unused, unwanted items (DVDs, CDs, games, consoles, a chair, small TV, shed, magazines, etc.). But I would like this money to go to paying off my debt as well as keeping me in the black while unemployed.

I have a £30k debt spread over several credit cards. I have been slowly moving it around to low or free interest rate deals and I think I cannot do any more (My 2 Egg cards are currently blocked as I need to contact them to go thorugh my financial situation before the unblock them - I don't knowif it;s good to contact Egg now while I have a paying job or wait until I'm out of work, tell them this and see what they can do?). I have also moved any regular bills off the cards and have started paying everything from my current account, including Tesco (groceries). The problem is I will not be able to pay my min. payments when I'm out of work. What is my best action? Go to a debt company? Claim bankruptcy? I'm a contractor and I know the latter will affect me, but isn't there way round this, e.g. have someone else as company director of my limited co. (I've asked my accountant this question too)?

I'm desperate to get rid of the debt. I've had it for about 5 years and I want done of it. It's crippling everything I want to do and it's gone up and down then up. If I had a job it would now come down but very slowly. I just need help paying it off. It's actually starting to worry me, I loathe being in debt so if there are disadvantages to ridding me of the debt then I might just take it just to relieve the horrible worrying feeling.

There is also a little bit of me that wants to sell up completely and go travelling, well to Oz and NZ for a bit. I don't think this is possible for the moment but I don't think I'll get a better chance after now. Nothing might not come to April so taking time off till, say, February might be good timing in that sense and I could use the money from my eBay sells to fund the travelling.

Even if I don't travel, if I don't get a job soon I will probably have to move back to my folks for a bit (a 30 year old living with his parents, yuck!). So selling up would be good anyway.

Sorry, a lot of this is thinking out loud. Help and advice on all the above would help. My contract ends on 28th September and I'm busy re-writing my CV atm. :-)

Krazy K

Sea78

Hi

Just seen this and I'm just about to sign off but hope that by bumping, lots of friendly DFWs will be able to help!

Sea xxxx

krazyk

I have spoken to my accountant after I suggested what I would like to try. I suggested that I will write to all my creditors, list ALL my debts to each of them and tell them that I can probably get a total figure of £5k from friends and family, I have no assets and will not be able to pay minimum payments once out of work, can I pay from my £5k to clear off the debt with each of you. If one of you does not agree then I have no choice but to declare myself bankruptcy. He agrees that this is the best option and I am happy to accept the consequences. He said not to use any debt companies (as they'll do what I'm doing anyway and charge me for it). All I need to know is how much VAT, tax and corporate tax I will need to pay (taking into account that I could be out of work until April). My fees for him will stop too, which will help a lot, my company will be left alone and if the worse comes to the worse and I go bankrupt then there are ways around going back into contracting. OK it'll be painful for a year and then might have problems thereafter but I've had the problems already due to my bad-ish credit rating anyway.

I'm writing the letters today and will ask for a very quick response, i.e. by end of next week.

What I'll do is sell as much of my stuff as I can. I will put lots on eBay (I have a few friends who are 'experts' that can help), ask friends if they want anything, perhaps put a ad in the local paper(s) and sell items at a car boot sale with my brother (which we could sell come of my parents stuff at the same time). I've also gone to my letting agency for them to ask my landlord if they might be interested in any furniture (the one thing the house does not have is a wardrobe and I've bought a very large one for it which will be a right pain to move out). I will also give my notice on the house this week or next at the latest and will have 1 month (max.) to get as much of it sold and out of the house before moving back to my folks for a bit. Anything I get on top of the offered £5k I can use to live on/buy that camera lenses that would help my potential career line into photographer and/or travel for a bit. I don't think I'll give much more if any.

Everything has to happen very quickly. I'll be very busy. :-)

Any tips and advice on anything mentioned in my mails would be greatly received.

Krazy K

floss2

Can you get a forward forecast on the tax situation to enable you to pay it now or put to one side for payment?

krazyk

Yep that's the idea.

Krazy K.

krazyk

Is there such thing as a template letter here for when I write to my creditors?

Krazy K

Sea78

Hi

I think there are quite a few template letters available - the CAB and national debtline have some on their website - perhaps some one will know some more direct links?

Sea xx

krazyk

This is looking very bleak at the moment, firstly this is the letter I sent to all my creditors this weekend:


I have been told this week that my contract is not being renewed and my job comes to an end on 28th September. I am trying to find another role but there are currently no prospects for a new job.

I am therefore writing to ask for your help. I will not be able to pay minimum payments on my credit card bill once out of work. With the prospect of being out of work for the foreseeable future I am requesting if we can please come to an arrangement with my outstanding debt?

My debt with you started directly or in-directly when I was off work in 2003 while nursing my poorly parents, where I was basically living off the credit cards to fund storage and costs or obtaining other cards to balance transfer the debt to cut the interest. Since then it has been a struggle to move off the credit cards and buy directly from my current account due to the minimum payments becoming higher and higher. I have tried to pay as much as I can when I can but I’m sure now, though, I have paid my debt off if interest was not included.

I cannot obtain a loan as I have no assets and a low credit rating. I am trying to borrow some money but the maximum that I think I can get is about £5,000 from friends and family. I have listed all my current amounts owed below. Please can I ask that I use the £5,000 to pay you and my other creditors on a pro rata basis and have the balance of my debt written off? If you or anyone of my creditors cannot agree then I have no choice by to declare myself bankrupt, which is not what I want.

Can I please request a response before 1st October as I need a decision as soon as possible so to avoid further costs and charges? You can contact me either by letter, phone or online. Details are below:

Credit card company Amount owed as of 19/09/2007
Egg Credit card £4,295.13
Egg Money card £1,945.84
Alliance & Leicester £2777.10 + £100
MBNA £7,811.57
Capital One £3,828.03
Morgan Stanley £4,505.29
cahoot £5559.69

TOTAL £30,822.65


KrazyK

krazyk

I've had Egg on the phone today and basically they will only help AFTER I go into arrears (thus after they charge me and I'm charged more interest!!!!). Once this happens then they'll either freeze the interest, default me and I pay off the remaining balance OR negotiate reduced payments OR stop payments for a minimum of 3 months, they will not accept this offer I have proposed!. :-(

So they'll help a bit but only after its too late and I'm in arrears, defaulted and have an even worse credit than before.

I've not heard back from the rest but it was going to take only 1 creditor to refused the arrangement before I have to consider the alternative I've mentioned in the letter.

Again any advice is welcome and I will talk to my accountant again ASAP.

KrazyK

redpoison

hey did you take out insurance with these cards?

krazyk

Nope, they were too costly.

KrazyK