A financial Pickle

Yorkshireman596

Hi All

Having skirted around this for a little while I thought it was time to get some help. In short over the last 2 years iv'e gone through a divorce, Failed business (some !!!!!! did'nt pay ), a new baby ... ect ect.

As part of a court order granted with the divorce i was to pay and still currently do £150 per week in child maintenance to the ex. This has not gone past the 1 year mark and so if im correct can now be reviewed by the CMS .

As part of the failed business i gave a directors guarantee of a small business loan and overdraft totalling around 15k with HSBC to which they are chasing me for via a recovery firm.

Currently have personal debts of around £20k to which i am behind on several payments and no assets apart from a car on finance with about £5k left to pay

I currently live with a new partner in a property attached to a business that we set up together but under a LTD Company to which she is the sole director. The property is leased. Neither of us currently take any salary / earnings from the business but it does cover all our living costs / utilities ect

So in essence if i was to accept the 15k on top of my current 20k personal debt it would be quite the struggle and so as i would see it probably going personally bankrupt would be the logical thing to do.

National_Debtline

Hi Yorkshireman and welcome to MSE,

Unfortunately, if you offered a personal guarantee on the limited company debt, it is the same as your personal debts, so it should be rolled in together. Don't worry about debt collectors, they are not a bailiff and have no right of entry or repossession. Bankruptcy could be a potential option, but there are several things to consider.


Bankruptcy costs £680 and the application is done online. If you are declared bankrupt then it will normally last for 12 months and you will have certain restrictions on you during that time. One is that you cannot be the director of a limited company, but if your partner is the sole director, hopefully this shouldn't affect your new business (however, you may want to discuss this with Business Debtline as well).


Any assets such as property, vehicles, savings etc would be at risk. If you car is subject to a conditional sale agreement then unfortunately, it is not an asset at this point, but a debt. This means it would be included in the bankruptcy, and the payments no longer permitted, and the car would be returned. Any outstanding liability would be absorbed by the bankruptcy. If a third party can take over the payments for you, then that may be an option to keep it, however, you need to talk to the car finance company about this and check the terms and conditions of the agreement. If the car is paid off before you are discharged from your bankruptcy then it would be an asset and be at risk of being taken then.


Bankruptcy is obviously very damaging to a persons!!!8217; credit file and it would be very damaged for 6 years but can affect your ability to get credit in the future. Your income and expenses will also be assessed !!!8211; if you have more than £20per month disposable money then they can take 100% of the disposable money for up to 3 years under an Income Payment Arrangement (IPA). Ensure you do get full advice from one of the free debt charities before making this application. Good luck,


Laura
@natdebtline

Yorkshireman596

Thanks laura .

I would imagine that it would take longer than 6 years to hammer down this debt and repair my credit history .

mwarby

There is the 'have you ever been declared bankrupt or entered in to an arrangement with crediors' type question, this is a life long effect (but I had to answer yes and got a mortgage with IVA still showing on credit file, so not end of world)

Yorkshireman596

No i have not entered into anything to that effect before . How did you find the IVA? There seems to be some horror stories on here