Repayment plan refused because I earn too much

Pedrosica

Posted this originally in consumer rights but wonder if here is more appropriate...

Hi everyone

I have an unauthorised overdraft with HSBC of £220.

I started my own company around 18 months ago and have earnt almost nothing in that time.

My wife is in a similar position.

We have lived off credit cards, family loans and benefits.

Both businesses are now turn a corner and becoming profitable. (My wife's very much so and mine to a lesser degree).

Even so our actual take home money is still pretty variable. My wife earnt £5k last month but may earn much less this month.

I told HSBC about my situation. I suggested that all DDs be removed from that account to my joint account. And that I essentially freeze the account with the unauthorised overdraft sync set up a payment plan for £30 a month with a view to over paying in months where my income was high.
Initially they refused as they said my income couldn't be guaranteed as I was self employed. (They refused to even do the questionnaire to see whether I was eligible).

I talked them into doing it if my wife's income was also included. They told me the purpose of the check was to see whether I could afford the repayments (of £30 a month).

Given that they wouldn't accept a plan when I may earn nothing I overstated my joint earnings a little (£3k a month). This is actually a very possible scenario but it could also be less I just didn't want them to reject me for wanting too little.

Anyway after doing the check they told me my income was too high to accept a payment plan and that I had to pay the full amount in 40 days or I would be considered to have defaulted.

I cannot pay the sum now. I may be able to in 40 days but cannot guarantee it.

Any advice? It seems entirely unreasonable on their behalf.

Richey_

I assume this is a wind up thread.

BrassicWoman

did you miss a zero off the amount?

Pedrosica

Not at all!

I told HSBC I couldn't guarantee my income but things were "picking up". They told me I had to give a guaranteed earnings to qualify for a payment plan, and that I had to earn enough to guarantee I could meet the repayments.

Realistically I could earn £3k next month in which case I'm fine. I could equally earn nothing (extreme scenario) or mire likely somewhere between the two. Because they told me the purpose of the questionnaire was determine that I definitely could meet repayments I gave them the top end. However I made it clear it could equally be nothing.

If I only earn enough to cover rent, bills other debts I will be forced to default. If I earn the full projection I'm fine.

What I wanted was an interim plan that meant I wasn't left in the lurch if business tailed off or didn't materialise.

Is that unreasonable?

Richey_

Is it really worth getting a late payment marker/default over £220 when you and your wife earn £8000 a month!?

Pedrosica

We don't earn £8000 a month.

My wife earnt £5k last month, most of which went to existing debts, rent and bills.

Next month we may earn £3k we may earn £0

Pedrosica

No I didn't.

Richey_

Your decision but an unauthorised overdraft must be a priority. Seems mad to mess your financial future for the next 6 years over such a small amount.
How bad is the debt situation? Could you not have got a business loan?

Pedrosica

I'm about 12000 in debt all in.

No business loan.

Currently have 57.33 in my other bank account. Trust me if I can pay it I will. My point is I simply may not have the money to pay it off. I guess I can by late paying other debts.

Richey_

Try the Debt Free Wannabe board for advice and tips. They will usually ask for a statement of affairs and go from there. Sounds like you would also benefit from somebody who can guide you with the best way forward, somebody like Christians Against Poverty or Stepchange. They can advise how best to pay off debts or consider bankruptcy, Iva, Dro etc. Is your business a limited company or a sole trader? Either way you may need to sell it or transfer it if you are considering bankruptcy

Pedrosica

Thanks that's the first non sarcastic/dismissive reply I've received. Much appreciated.