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Struggling with debt? Ask a debt adviser a question

edited 24 July 2018 at 2:41PM in Debt-Free Wannabe
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  • StepChange_RachaelStepChange_Rachael Organisation Representatives - Private Messages may not be monitored
    375 posts
    Third Anniversary 100 Posts
    ✭✭
    Hi

    Welcome to the forum and thanks for explaining your situation in detail.

    You’ve clearly been through a very difficult time of unforeseen circumstances. It’s understandable that the debts would have built up taking into account these changes in your situation.

    There’s certainly help available; there are always options available to find a realistic way to become debt free. When debts aren’t serviceable and become unmanageable it’s really important to look at your options.

    I’d suggest contacting the Business Debtline to discuss your options in more detail. Debt types such as corporation tax and HMRC debts do have different rights of collection to personal debts such as credit cards and need specialised advice. As you’re still registered and working under a self-employed basis it’s important to know exactly what any debt solutions or advice you’re given would mean for your limited company.

    Depending on the advice it could impact you and possibly your wife differently, again this is important to discuss with a specialist debt advisor.

    The Business Debtline offer free specialised debt advice but can also include any personal debt you or your partner have.

    I hope this helps, all the best going forward.

    Thanks
    Rachael



    cosmicherb wrote: »
    Hi,
    Apologies, this is a long story, but I am in a bit of a mess, and I need to get it out.

    I'm a UK based, mid-management type who works in construction (office-based). I've been working on a freelance/contract basis with my own limited company for the last 5 years now. I changed from a permanent role to go into a job in the oil and gas sector, which in 2013 was booming. Day rates were good; very good. I worked in Scotland, away from home in Yorkshire, but had plenty of money and lived a good lifestyle with nice holidays, cars, etc. We could expense anything and ate out in nice places on a weekly basis. In mid-2014 the oil price started dropping like a stone. This wasn't a massive issue for me as the project I was working on was already well under way and it would have cost more to pull it. Some companies dropped their day rates, but ours didn't. All that happened was the free-and-easy days of expenses were over, but we kept working and the project's physical phase ended in mid-2015.

    I worked in London for the last 6 months of the project, tying up final accounts and paperwork. I was reimbursed for hotel, travel and reasonable food bills. It was then that I made a big mistake, which I have regretted ever since. I left the job, unsure of how much longer it would last and not given any assurances, to take what I thought would be a nice number near home working for a small company set up by friends, even if the rate was a lot lower (but no travelling costs). At this point I was not debt free (a couple of credit cards had built up) but was up to date with taxes, VAT and so on.

    The new job was a disaster. The company fell apart and was asset stripped by vulture capitalists within a year after the directors fell out, one of them getting sacked from the company he set up, and sensing where it was going, I took another contract job with a pipeline contractor near Aberdeen. Rate wasn't brilliant, but the costs for living away were high (I had to pay for all travel costs myself). It was at this point that I started falling behind on corporation tax. I had bills to pay at home, including the two credit cards (now maxed out) and to support myself and where I would have been saving some money for tax, I wasn't doing it any more.

    That job came to an end when again there were no assurances forthcoming as to length of contract. Another job was lined up, but I was out of work for a month, finishing just before Christmas. The debts continued to grow, and at the end of January 2017 I had a larger-than-expected corporation tax bill hitting the doormat. I had to take out a personal loan of £12k with my personal bank to pay it, managing to scrape together the other £2-3k together somehow. That was an additional £600 payment to service.

    So in late January I finally started the new contract job and it paid a pittance. Pretty much half the rate I had been on only a year before. I was reimbursed capped expenses, but they didn't cover the costs of even the cheapest hotels available where I was working (Rosyth dockyard in Fife, with hundreds of people working on aircraft carriers and bridges). I was basically surviving at this point, struggling to keep head above water. And then the boiler at home packed in and we had to borrow 3 grand from my in-laws.

    Within a month, the person I reported to was sacked for undisclosed reasons. Move forward 5 months. A new manager arrived in our client!!!8217;s organisation and decided to trim the team and I was in the firing line as the most expensive asset in our team. Fan-bloody-tastic. Within a couple of weeks I was gone, and the long-term stability seemed further away than ever.

    What followed was 3 months of desperate job-searching. I travelled all over the UK and to various places in Europe trying to get a job. I got very close on multiple occasions, even having jobs offered and withdrawn within 24 hours (ARRRGGHHH), borrowing more money from relatives, going to the Job Centre and claiming JSA. it was massively dispiriting. I had to make an arrangement with HMRC for a VAT bill of £4,500.

    I ended up getting yet another job in Scotland. Right up the top, near John O'Groats. Decent-ish rate, but again I had to fork out for travel and accommodation, which again wan't cheap. The 3 months off have put me on my backside now, however. I've got another VAT bill outstanding and also a corporation tax bill for £12k which I have been unable to save up for and now pay. The personal debts are becoming unserviceable. I am paying nearly £4k a month just to keep my head above water. If this job ends, I'm really in deep do-do. I've been working away from my family for nearly 5 years and ended up in a lot of debt. I am giving serious consideration to taking a job overseas, somewhere like Dubai, but even with the kind of money I could get, I'd still just be managing. I'm seriously worried about the impact on my family. I have nothing in the way of assets; my wife owns our house. Will they come after her? (I have 2 cars on HP as well which I'm not including in my numbers).

    By my reckoning I have personal debts of £33.5k made up of:
    Bank loan (to pay off corp tax) - £8k remaining
    Credit cards (3 separate) - £13.5k
    HMRC Self-Assessment tax - £2k
    Family loans - £10k

    I also have company debts of £30k made up of:
    Corporation tax - £12.5k
    VAT - £6k
    Company Credit Cards - £11.5k

    Wow, when I write it out, it looks ridiculous. I can't believe how quickly it's spiralled and I can't believe I've let it get to this state.

    I can't see many options. I could let the HMRC and other creditors put my limited company into liquidation, but I'm sure I'll still be liable personally, which is fine. I do want to pay it back, but I also want to live and allow my family to remain unaffected.

    So my question is: would I be able to get into a DMP including these company debts, or do I need to wait for the creditors to take my company down and then roll it in with my personal debt? Would taking a job in Dubai be a wise move?

    Thanks for reading!
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • Hello,
    Will just start by saying what a great site this is, and appreciate all the advice that comes with it.
    So I built up debts over the years which all caught up with me 7 years ago. I had consolidated and re-consolidated and continued to rack up credit cards etc. In the end my total debt was 38K. My own fault as I was earning good money at the time, but when that stopped I was in trouble. So in the end I setup a DMP with Payplan and to date have paid in 8K.
    Now I have been monitoring my credit files and scores over the years, and as of December my last default has now been removed from my credit file. My credit score is quickly improving and is now considered very good on Clearsocre and Noodle. I still owe 30K to the creditors and am continuing with the DMP. I had tried to do some full and final offers as had a family member willing to help out. Offered 20% but all (5 creditors in total) rejected offers, and some asked me to raise them, or made counter offers that I just couldn’t afford. I’m currently paying £200 a month at the moment into the DMP which is obviously going to take a long time to clear.
    Most of the debts are post 2007 so haven’t gone down the CCA route, is that worth doing regardless? Some of the credit cards which have been sold on are probably from 2005/6.
    Another question I hoping someone can help with is regarding a Homeowner loan I had years ago. I took this out with Barclays, however as I had a shared ownership mortgage I should never of had this. I panicked and took out two personal loans to pay this off asap, as the second charge was against the share I didn’t own. In total I had this loan for around 12-18 months before I paid it all back in full. I’m wondering if I should follow this up as I paid them about £5000 in loan repayments over that time, plus the full settlement.
    Any advice is much appreciated, along with suggestions on negotiating settlements.
    Debts are with Link Financial, Moorcroft, PRS Group, Barclay, Tesco Bank.
  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi,

    Thanks for your post.

    The first thing to do here is contact Salford Court to find out if they’ve received your defence before the creditor has requested judgment. The court itself doesn’t automatically enter the judgment after the 14 days; the creditor has to request it therefore if you have filed your defence before that you should be ok.

    If the judgment has already been entered you will need to start by applying to set it aside on the grounds you want to defend the claim. There is some guidance on setting aside a judgment here on our website.

    If you’re on a token payment plan (TPP) with us I would recommend getting in touch with us as soon as possible so we can give you further help and advice on this debt based on your individual situation. You can find our contact details here.

    We look forward to hearing from you.

    Kirsty
    PETRA798 wrote: »
    Hi there
    Long story short, following a voluntary liquidation of my ltd company, Santander repossessed my van as apparently I was in breach of the lease purchase contract, despite asking them to assign it to my other ltd company and my offer to continue making payments. They have now issued a CCJ claim for £6k for the shortfall now they have auctioned the van. I thought I had sent the AOS by email as I had no bounce back, but when I was sending the email to file the defence, I noticed that I had missed one letter out of the email address. I have now emailed both the AOS and the defence to the correct address at Salford Court, and had acknowledgment. I've told them I never got acknowledgement on the AOS and I'm hoping that they don't notice the mistake in the email address but knowing my luck they will realise I have missed the 14 day deadline. What are my options? I am dealing with nasty solicitors who are refusing to accept the TPP with Stepchange, and if I get a CCJ registered against me it affects my ability to get insurance (public liability and van etc). If they get an enforcement straight away can I still apply to pay in instalments ? Feel really stupid that I have made this mistake on something so important, especially as Santander appear to be so cutthroat.
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • Hi I posted this question on a different forum. We will be contacting StepChange shortly to look at a DMP. I wondered if a question could be answered first. My mortgage product comes to an end at April and I will have to contact my existing lender to discuss a new product. We really don't want to sell our house to repay our debts. Should I organise this first and then contact SC to look into a DMP? We are struggling with a considerable amount to unsecured debt.
  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi,

    Thanks for your post and welcome to the forum.

    I’m sorry to hear of the difficulties you’ve experienced with debt. As you’ve seen for yourself debt can quickly spiral out of control and consolidation is rarely the answer. You’ve made a very positive step by contacting Payplan and setting up a DMP.

    Based on you having £30K left to pay at £200pcm, it’s going to take over 12 years to repay the remaining balance so you may want to look at whether an alternative debt solution might be better for your situation. I’d recommend contacting Payplan in the first instance to see what they would recommend but if you’d like a second opinion, you could enter your details on our online Debt Remedy tool to see what we’d recommend for you.

    There is some very useful information on our website regarding making full and final settlements. Please bear in mind that the creditors are under no legal obligation to accept lower sums than the outstanding balance so they can refuse the offer. If the creditors are unwilling to accept an informal full and final settlement you could consider looking at a lump sum individual voluntary arrangement (IVA). If you would like to discuss this please feel free to contact us on 0800 138 1111 or speak to Payplan who may be able to help.

    If you believe there has been some discrepancy in the contracts with your creditors you are free to make a request for a true copy of the agreement under ss77-79 of the Consumer Credit Act 1974 with a fee of £1 at any time . However, it does sound to me that you admit you owe the debt but it has become overwhelming so reviewing your debt solution would be key here.

    In regards to the homeowner loan, are you suggesting Barclays have made an error in giving you the loan because you had shared ownership? I’m not sure if you’d have any recourse here but if you wanted to review the contract I’d recommend you seek independent legal advice. You could contact your local Citizens Advice Bureau or you could find a Solicitor through the Law Society website.

    I hope this helps.

    Kirsty

    DellBoy wrote: »
    Hello,
    Will just start by saying what a great site this is, and appreciate all the advice that comes with it.
    So I built up debts over the years which all caught up with me 7 years ago. I had consolidated and re-consolidated and continued to rack up credit cards etc. In the end my total debt was 38K. My own fault as I was earning good money at the time, but when that stopped I was in trouble. So in the end I setup a DMP with Payplan and to date have paid in 8K.
    Now I have been monitoring my credit files and scores over the years, and as of December my last default has now been removed from my credit file. My credit score is quickly improving and is now considered very good on Clearsocre and Noodle. I still owe 30K to the creditors and am continuing with the DMP. I had tried to do some full and final offers as had a family member willing to help out. Offered 20% but all (5 creditors in total) rejected offers, and some asked me to raise them, or made counter offers that I just couldn’t afford. I’m currently paying £200 a month at the moment into the DMP which is obviously going to take a long time to clear.
    Most of the debts are post 2007 so haven’t gone down the CCA route, is that worth doing regardless? Some of the credit cards which have been sold on are probably from 2005/6.
    Another question I hoping someone can help with is regarding a Homeowner loan I had years ago. I took this out with Barclays, however as I had a shared ownership mortgage I should never of had this. I panicked and took out two personal loans to pay this off asap, as the second charge was against the share I didn’t own. In total I had this loan for around 12-18 months before I paid it all back in full. I’m wondering if I should follow this up as I paid them about £5000 in loan repayments over that time, plus the full settlement.
    Any advice is much appreciated, along with suggestions on negotiating settlements.
    Debts are with Link Financial, Moorcroft, PRS Group, Barclay, Tesco Bank.
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • If I were to apply for a full and final IVA now, would that or my debts re-appear back on my credit report?
  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi there,

    Thanks for your post.

    You’re welcome to contact us at any time to discuss options for dealing with your debts including the debt management plan.

    If you’re struggling to make payments to your unsecured debts, if you were to miss a payment or make a reduced payment this could have an impact on your credit rating. In turn this could affect the mortgage options available to you.

    I would recommend contacting your mortgage provider now to see what options might be available to you at the end of your current mortgage term. However, if you do urgently need advice please do not hesitate to contact us on 0800 138 1111. We’re available Monday to Friday 8am to 8pm and Saturday’s 8am to 4pm.

    All the best,

    Kirsty
    Hi I posted this question on a different forum. We will be contacting StepChange shortly to look at a DMP. I wondered if a question could be answered first. My mortgage product comes to an end at April and I will have to contact my existing lender to discuss a new product. We really don't want to sell our house to repay our debts. Should I organise this first and then contact SC to look into a DMP? We are struggling with a considerable amount to unsecured debt.
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi DellBoy,

    The debts would not be re-entered if they’ve already defaulted and dropped off your credit file. The IVA would show on your credit file for 6 years from the date it was entered.

    Kind regards

    Kirsty
    DellBoy wrote: »
    If I were to apply for a full and final IVA now, would that or my debts re-appear back on my credit report?
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • Hi, I think i've made a boob!

    I've been in a Debt Management Plan for 3 years which is going to plan. However, I received a letter a couple of weeks ago from Restons Solicitors representing Lloyds Bank Credit Card saying I owe about £2000. This is a debt that I genuinely left of my list of debtors when I set up with Stepchange, apparently I was paying it up until about 4 years ago and then somehow it got lost in the mess that was going on at that time.

    They sent me an Admissions Letter for the County Court. On it, I put my income and expenditure (obviously including my DMP repayment) and made them an offer of £10 per month. (I have subsequently found out that I shouldn't have done this as it could be seen as unfair to my other debts).

    Today they've returned it saying that they see I am now married and they want my husbands income details. The debts I accrued are all mine and we have completely separate finances. We contribute half each to the bills/living costs and my surplus money goes on my DMP. Do I need to include his salary? He's not on a big wage but I just feel it's a bit unfair as it has nothing to do with him. They also want proof of my DMP, I'm hoping a print out will suffice?

    Can anyone advise what I should do?

    Thanks

    p.s I'm new to this forum and I think I posted this previously in the wrong place.
  • Jc94Jc94 Forumite
    1 posts
    Afternoon,

    On my personal debit account I am around £2,400 overdrawn, I opened another debit account with a separate bank which I switched all of my invoice payments into & all bills to come out of(this account always has a positive balance). Therefore my original account is just a sitting duck being charged for being overdrawn, these charges just get added to the overdraft & snowballing making it bigger, regularly putting me over the limit.


    I decided to sort this out & looking on this website the balance transfer credit card looked to be the perfect answer, paying it off month by month instead of just paying charges. I found the ideal option at Lloyd’s & went into my local branch to set it up. The lady in branch was very helpful but told me as my overdraft is on a debit card the transfer would not work as it would only work as credit. This was definitely a spanner in the works & now the only options I can think of would be a loan or get my second card into a cheaper overdraft in order to pay off the original.

    Any advice would be greatly appreciated!

    Thanks.
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