Please help - crisis stage

riojahouse

Ade
I was made aware of your post by my partner, and I am im in a similar situation but probably a whole lot worse (similar age 37). My Brother and I took over a family business 3 years ago from my father, nievely, not knowing what the real debts were, well in excess of £ 100K's and £ 100K's plus (and more).
My Partner although not in the boat every day rowing with us, I have probably put her through hell and back, my love and apologies to you K.
My Brother and I have put everything into the company to clear the inherited debts, but this coinciding with the worst retail recession in history has made made things really, really bad ( we have been trading near on 100 years, and statisically traded very well - but we are now dealing with a Labour Government of over taxation which has caused a whole bag of bad worms and a retail recession ) My father has 2 properties, both paid for, which if he re-mortgaed, and cleared our debts (even if it was the credit cards that would be a start)( which are due to him anyay ) we could afford the repayments, but he would not give us the steam off his you know what (urine), so, through his mis-management, we are in the brown sticky stuff, big, big time, without a paddle. HMRC dont care, dont understand, send bailiffs for small amounts for tax, so do HMRC for VAT, ( had both knocking at the door ) home and work - enough said for sleepless nights, day in day out-week in-week out.
My Brother and I have credit card debts, and have had 5 years of complete and utter ( Sh**e) to be polite, 10-20 calls a day RE repayments I cant afford.
This has only recently been highlighted by a downturn in trade, and not being able to afford the repayments.
I am in the process of remortgaging my house ( I have the equity ) to pay HMRC £ 18K, yes that much for tax and vat, and to clear the credit cards - and settle one thieving c/card company and their default on my credit file, which has really made getting a decent rate mortgage difficult - DON'T GET A DEFAULT ON YOUR FILE - COZ THAT REALLY SCREWS YOU - LIKE BIG TIME AND STAYS FOR 6 YEARS - BAD, BAD NEWS.
I had one c/card company I had 6 cards with, had been on time with payments for 3 years, every month, no missed payments at all, and over 2 days, Friday and a Monday, they cancelled all my cards, no reason whatsoever. No reason given either - WHY ?
We have cut back in the business, my Ni bill used to be £ 1400 a month, now due to retirements etc, ill health, staff cut backs my NI bill is £ 4 a month, YES £ 4. My Brother and I work much, much longer hours, have had no holidays for 4 years, and basically work to keep a roof over our heads and put food on the table, oh and pay the credit cards.
I can offer only a few words of advice:-
If you believe in your business, and it's long term viability, stick with it - we have.
Can you improve your turnover so that your monthly outgoings are less of a burden - I have no idea which line of business you are in, but can you go online, or diversify in anyway ?
No answers are found in the bottom of a bottle - been ther, not good.
Stay focussed.
Dont be affraid to talk with people about the situation.
There is always someone in a worse off position than you, that would love to trade places with you.
Try and consolodate where possible your c/card debts, whether it be re-mortgage, or transfering balances.
I am sitting here, after having the most darkest of weekends of my life, worrying about work, not being able to enjoy myself with my partner and kids, wanting to be physically sick-which I was on numerous occasions, no money to do things, struggling to pay the mortgage, and the debts.
Can you re-mortgage to help your parents debt-maybe interest only to wipe some of the credit cards- coz the interest alone is a killer.
Contacting c/c companies might set alarm bells off. May be contacting a really, really good mortgage broker/financial advisor may help.
Which other avenues are there to explore.
Ade, if you reply to me, we can communicate in other ways if you get my drift.
You are not alone in what you are going through - stay strong, and focused, don't be ground down by it all - there is light at the end of the tunnel, trust me there is.
Kindest regards.
Phil

GeorgeUK

If it's not possible to do Balance Transfers, have you looked at getting LOB (Life of Balance) Cards? No idea about the limits on them (or required), but the interest is usually max 6%

Possibly worth looking into - not sure if your existing cards can be transferred to LOB. Anyone know?

Ade704

MABLE wrote: »

I feel sympathy for your situation and I hope you can come to some arrangement with your creditors. However why oh why did you have to involve your parents. As you say you are young enough to start again.
Knowing a new business is always a risky venture no way should you have involved your parents and especially at there time of life.

Sorry I just feel cross for them and so very angry with you.

I can see how it would look like that but it is a not quite that simple. We went into the business together as equal partners in 2002. I've worked with my father all my working life and when this opportunity came along (and it is a very big one) it was a joint decision to get involved. Since then, the new product we have been waiting for has had development problems, most of which have now been solved. But my father decided to secure the o/d with his land in the very early days when we had no idea of the delays to come. A couple of years ago we took on 2 private investors who have also put in a lot of money. I'm pretty sure that everything will eventually work out with the business and the reward-to-risk is huge but, along the way, we have both been dragged deeper and deeper extending our personal borrowings to take pressure off the company. We have always been just that one last step away from everything taking off. We are now at the point where our biggest investor is happy enough to keep funding the business but we can't take out enough to keep paying my father's monthly bills. I should also say in my defence (since you obviously don't have a great opinion of me) that when my father was forced into bankruptcy 15 years ago, I had just graduated from university. Instead of going my own route, I went to work with him and bought their house (as they coudn't get a mortgage). I lived with them for a while but moved out about 6 years ago. Their house is still in my name by the way.

Ade704

Thanks so much for your reply Phil - it is much appreciated. I do have faith in the business and I am sure it will work out sooner or later. And when it does, the implications are huge (I don't want to say too much in open forum but I could tell you more in private, although I'm not sure how to swap details...?).

Ade704

GeorgeUK wrote: »

If it's not possible to do Balance Transfers, have you looked at getting LOB (Life of Balance) Cards? No idea about the limits on them (or required), but the interest is usually max 6%

Possibly worth looking into - not sure if your existing cards can be transferred to LOB. Anyone know?

Not sure George. I can try it but again, I'm a little bit wary about spooking them too much without knowing how they are likely to react. I am seeing our accountant this afternoon and hopefully he will be able to refer me to someone who knows. Has anyone had any experiences with any of the credit advice people?

housebuyer_abc

This is quite important in your case (and your fathers).

Declared Bankrupts are legally barred from holding directorships in the UK for a period of time (its either 2 or 5 years) after the bankruptcy is invoked.

Obviously if you can't be a director you can't run your company. Don't run straight to bankruptcy unless you've spoken to a legal advisor on how to set up the structure of the company to allow it to continue.

student100

I'm guessing your business is a partnership and not a limited company?

Ade704

housebuyer_abc wrote: »

This is quite important in your case (and your fathers).

Declared Bankrupts are legally barred from holding directorships in the UK for a period of time (its either 2 or 5 years) after the bankruptcy is invoked.

Obviously if you can't be a director you can't run your company. Don't run straight to bankruptcy unless you've spoken to a legal advisor on how to set up the structure of the company to allow it to continue.

Thanks, although I had realised that. If it came to that, I understand that I could start up as a sole trader or partnership but hopefully this will never have to happen. We're actually seeing an expert early next week and my mother and father may make an arrangement with the credit card companies. We've also had some good news business wise in the last 24 hours.

Ade704

student100 wrote: »

I'm guessing your business is a partnership and not a limited company?

No - it is a limited company with 2 directors and a secretary. 4 shareholders - 60% between me and my father.

Gillianh2

Ade,
Not sure if this is useful or not. Could your parents enter into an "equity release" deal, whereby they release some equity in there property and that is repaid when they die or the house is sold. It cuts down on your Inhertiance but I think you need it now more than later.
Might be worth looking into.