Hope someone kept my seat warm..

immoral_angeluk

I take no pleasure in coming back to DFW, which sounds horrible but I'm sure you all know what I mean.

Thanks to a failed business, I'm now back at square one with my debt. Probably worse, and have come to the point of no return. I can't try and carry on as if it is all going to work out fine if/but/maybe. It's time to accept that I screwed up and that I need to sort it out.

My business lasted 14 months, earning 100k in revenue in 6 months. It took one month to kill it entirely, as is common with startup businesses.

Will get on with doing my financial statement and put in a separate post.

Ugh. I feel sick.

[Deleted User]

Welcome back IA

Will be following your diary xx

immoral_angeluk

Income:

Child benefit: £34.40 pw / £137. 60 in an average calendar month
Child maintenance: £150 (sporadically - previously through the CSA but got kicked off during their change over)

I'm currently looking for a job, and have applied for about 20 so far. I was offered one for 12 hours at minimum wage, but the 2 hour travelling each day would have negated any benefit from it so it wasn't viable.

Household make up: I live with my boyfriend of 10 years, in a jointly mortgaged house with 2 daughters aged 12 and 10. My boyfriend earns a decent wage with loads of company perks, so we're very fortunate to be in a position where he is able to pay the main household bills. I'm not very happy about this, and want to contribute fairly. The aim of the business was to get me to a point of being financially independent and secure, but it backfired spectacularly.

I have been paying some bills though.

Gas and electric £56 a month, recently switched
Water £45 a month on a meter (4 bedroomed house with 4 loos!)
TV licence £12.18
Sky £56
Children's mobile phones £30pm in contract
My mobile £30-50pm (I'm stuck in a bloody awful ID contract until April, at which point I'll be switching to Giffgaff.
NHS prepayment cert £10.40pm

My personal bills are about £260 a month.

The business bills are ugly, not too ugly, but the kind of ugly that goes with having no money.

IT equipment lease £108pm
Liability insurance £24pm
Indemnity insurance £15pm
DVLA van tax £21pm
Van insurance £83pm
Advertising agency £36pm
Fleet breakdown insurance £10pm (Paid yearly)
Digger and trailer lease £374
Professional memberships £40 a month (About £500 a year)

Business bills £718

Business debts. This is where is gets REAL ugly.

Owed to a contractor £3056.29
Trade supplier A £2700 (This month's payment is £1788)
Trade supplier B £2168 Overdue
Trade supplier C £4197.30 Overdue
Credit card A £349 Overdue with full payment required
Credit card B £570 Up to date, £8pm
Credit card C £170 Up to date £5pm
Business overdraft £5000

Total £18,210.59

Other/Leases
Startup loan Approx £6000,(£141pm and up to date. Likely to miss next payment)
Digger and trailer lease approx £11,000 (£374 Up to date but likely to miss the next payment)
IT equipment lease £2000 (£108pm and likely to miss the next payment)

£37000 or thereabouts, including the leases etc.

The business assets currently total about £3k, with £3600 of invoices still due.

You'll notice that none of this is really 'business' debt, per se. It's all in my name, so I have full personal liability. Which sucks, but typically with any new business the creditors all want personal guarantees for everything. So I'm stuck with it.

I've already contacted a trade debt charity and sought advice. Due to our property and my current lack of income, token payments or a temporary hold was suggested. I've written to the main creditors with holding letters, to give me a bit of breathing room to find a job. Other than that, I'm literally just getting by day to day and trying to work out the right thing to do at any given moment.

Bankruptcy is a big no no. I won't do anything that risks our home or impacts my boyfriend. An IVA would be a potential, but that, if agreed, would demolish my credit rating and screw up any future remortgage for us. I also can't look at formal insolvency if I want to keep open one option for employment, so a DMP is looking the most likely scenario at this point.

If I can find a job, that is. *sigh*

Arleen

Since those are debts for supplies, I imagine that there is some stock of something? At the very least you should try to return/resell it to cover some of the debts. Additionally as the supplies I imagine are just unpaid invoices they do not net interest, and honestly they are not going to chase after them (not worth it, been on the end of being owed by failed businesses - even with personal guarantees) so they really will be keep to cut any deal they can to minimize the loss.

immoral_angeluk

Sadly not, the materials were for jobs. Although we received payment for those jobs, many ran over and costed more in labour, meaning the payments didn't cover what was on accounts.

That, is addition to it being a very materials heavy industry, with high contractor costs and my inexperience/naivity, meant that it only took a month of no new work coming in to push it past the point of no return.

Absolutely gutting.

immoral_angeluk

The trade debt charity advised that the trade suppliers are most likely to end up taking court action etc, due to the balances. So far I've had many phone calls and threatening letters, but nothing more than that at the moment.

Arleen

They may, they may not take you to court, but they are also a lot more flexible than most debtors when negotiating with. Have to remember that while they may bill you at 3k, their actual costs are close to third/half of it, so offering a sum around this, explaining that they still will save money (collections are expensive, and that puts them at a wash) will likely get accepted. Additionally, make sure to collect the receivables yourself (call, call, call a lot and demand payment), and you can be blunt with the trade supplies that you will have X available when you collect from Y - they know, they've been there.

The key is to stay in touch with them and you can work it out, but if you will fall silent or not honest, they will then likely just pass it to collections.

immoral_angeluk

That's true. I've received statements from them and only wrote a week or so ago, so hopefully they won't do anything rash in the meantime, at least until I can find a job.

Arleen

immoral_angeluk wrote: »

That's true. I've received statements from them and only wrote a week or so ago, so hopefully they won't do anything rash in the meantime, at least until I can find a job.

Don't wait for them, call them now - it's still business hours, and explain that the business went under and you are looking to cut deals. Make it clear that payment in full is just not going to happen for at least a yaer due to total size of debt and ask what can they do for you (and don't take first offer either, have to be hard in negotiations - this is still handling business).

And for collections if calling doesn't work, go and have a visit. Just showing up usually gets some cash in hand. And be ready to cut deals too.

immoral_angeluk

As it stands I don't have anything to offer them! I'm literally penniless and jobless

Arleen

immoral_angeluk wrote: »

As it stands I don't have anything to offer them! I'm literally penniless and jobless

Tell them that, and that you are working to collect some money. It trully is key to stay in touch and be proactive, even if all you have to offer is a promise to work on it.