I am new and in a mess

Justin_GB

Hi my name is Justin I am new here and in one hell of a mess. Not sure if I should be posting this here but I don't know where to start.

I have serious money problems, the thing is I am self employed in a what was a successful business and it is a partnership, this means both me and my business partner are joint liable for my personal debt, and the business may well have to close, this will mean that we lose both of our income and our house as the house is part of the business. We have been to citizens advice but as we are a business even though the debt is personal and in my name they say they can not help, they have told us to phone a business help line which we did but they can only suggest bankruptcy and if we do this not only will we loose our business but also our home as it is part and parcel, we will be on the street.

Nuts and bolts time. I owe about £20,000. £9,000 is now on a personal lone, paying £180 a month, £6000 is on a credit card which I have not paid for 6 months, this has been handed to a credit control agency who have frozen interest and want £200 a month for 3 months then the remainder cleared on the 4th month, the rest is dotted about on the rest of a hand full of credit cards.

I am just keeping up payments on the £9,000 loan, the other debts are just growing.

I am keeping up with all my household bills, so far.

As you can see I am in a mess and do not know where to turn, friends and family will or can not help.

Justin

Larumbelle

Hi Justin :grouphug:

Welcome and don't panic. You are in the right place, we are all here to support and help each other. There is always a way to sort things out. You might be surprised how simple these things can be sometimes.

Can you post an SOA for us to look at your incomings / outgoings? It makes it so much easier for us to make suggerstions. Hoe to do one is here: http://forums.moneysavingexpert.com/showthread.html?t=107280

Sea78

:hello:

Welcome to the board - you have definitely come to the right place. Big hugs - it is a very scary time facing up to it all. May I suggest drawing up your SOA - see the sticky post at the top of the board for first time/new posters. This will outline all your incomings/outgoings and we could help by making suggestions?

Also it might be worth giving on of the free debt charities a ring for more info - CCCS (I am with them - fab!) or CAB.

Sea xxx

TTMCMschine

Hello Justin,
is your business partner also your partner, ie, spouse/gf/bf/etc - it just seems unusual to have your house as part of your business otherwise.

Maybe you could post a statement of affairs & some more details about your business - you say it was successful, so what happened, what the costs are, etc. Anything that might be helpful really.

Thanks.

Justin_GB

Hi,
now the figures will look bad but I know I have to face up to it. My business partner is my brother we purchased a shop with a flat above, we share living and business expenses 50/50.

Monthly Incomings:

My income - £490.50 Please remember I am self employed and do not pay my self a salary this is why citizens advice can not help. All I can work on is my income at the end of each year shown on the partnership balance sheet.


Benefits - £168

Total - £658.50

Monthly Outgoings:

Mortgage/Rent - £80
Council Tax - £27
Water £15
Gas - 0
Electric - £45
TV License - £11
Sky £7.50
Phone - £50
Food - £100
Car Insurance - £18
Petrol - £80
Life Insurance £16

Total: £369.50



CC – Balance £5,300 Interest frozen paying £200 a month


Loan – Balance £8,000 APR 6.9% Length of term 60 months

Other CC's about £3,000

Larumbelle

Justin_GB wrote: »

Hi,
now the figures will look bad but I know I have to face up to it. My business partner is my brother we purchased a shop with a flat above, we share living and business expenses 50/50.

Monthly Incomings:

My income - £490.50 Please remember I am self employed and do not pay my self a salary this is why citizens advice can not help. All I can work on is my income at the end of each year shown on the partnership balance sheet. - Is this the monthly income you are receiving now? Is it your income from last financial year/12? Could you clarify this please as I'm not sure I get what you mean


Benefits - £168 - Could you break this down into the individual benefits for me?

Total - £658.50

Monthly Outgoings:

Mortgage/Rent - £80 - I take it this is a mortgage not rent?
Council Tax - £27 - This is really low? Do you share a house or get CT benefit?
Water £15
Gas - 0 - No gas bill?!
Electric - £45 - This seems quite high. Have you been on uswitch to see if you can get it cheaper? You can get cashback if you switch as well.
TV License - £11
Sky £7.50
Phone - £50 - This seems very high. Is is a landline or mobile? What company?
Food - £100
Car Insurance - £18
Petrol - £80 - This seems quite high. Is it for work?
Life Insurance £16 - Is this for mortgage?

Total: £369.50



CC – Balance £5,300 Interest frozen paying £200 a month


Loan – Balance £8,000 APR 6.9% Length of term 60 months

Other CC's about £3,000 Can you be more specific re: interest, minimum payments etc?

What is your family/home situation? Do you have a partner, kids, do you share a house with friends? Sorry if it seems like a barrage of questions but it does make a difference

Justin_GB

OK I shall come 100% clean with you, there was this girl I thought I loved and would do anything for, and she maxed out ALL my credit cards, I ended up paying one with the other and then tried to clear it with a loan but it hasn't worked. She has now gone out of the picture and most likely found some other sucker. I have no one else just family, no kids. I share the house with my brother who is my business partner, we share all bills.

Justin_GB

Monthly Incomings:

My income - £490.50 Please remember I am self employed and do not pay my self a salary this is why citizens advice can not help. All I can work on is my income at the end of each year shown on the partnership balance sheet. - Is this the monthly income you are receiving now? Is it your income from last financial year/12? Could you clarify this please as I'm not sure I get what you mean, This is last year 2006/7 my 50% of divided by 12


Benefits - £168 - Could you break this down into the individual benefits for me? Working tax credit

Total - £658.50

Monthly Outgoings:

Mortgage/Rent - £80 - I take it this is a mortgage not rent? mortgage
Council Tax - £27 - This is really low? Do you share a house or get CT benefit? Yes and yes
Water £15
Gas - 0 - No gas bill?! no gas! we have no heating of any type
Electric - £45 - This seems quite high. Have you been on uswitch to see if you can get it cheaper? You can get cashback if you switch as well.Because part of the property if business the electric co. treat it as business only and charge a lot more
TV License - £11
Sky £7.50
Phone - £50 - Again we have to pay much higher rates as BT insist as one room in the property is used for business we have to have a business line which costs more, yes this includes a mobile phone
Food - £100
Car Insurance - £18
Petrol - £80 - This seems quite high. Is it for work? Some of it, but not much
Life Insurance £16 - Is this for mortgage? Yes

Total: £369.50



CC – Balance £5,300 Interest frozen paying £200 a month


Loan – Balance £8,000 APR 6.9% Length of term 60 months

Other CC's about £3,000 Min payment £50 per month some are 6.9% some 16% Can you be more specific re: interest, minimum payments etc?

duchy

Can one of you run the business whilst the other finds a job as a short term measure ? Then once the debts are clear decide if the business is viable to continue ?
Have you applied for working tax credit ? Your income is low enough to justify this I think-won';t be much but every little helps. Many people assume you have to be PAYE to get it-you don't.
Does your brother know the full story ? What are his thoughts ?

TTMCMschine

What is the business? Can it be diversified at all? Why isn't it as successful as it was?

Justin_GB

Hi,
The business is selling everything from coke to cable and buckets. We have changed what we sell over the last few years, and the turnover is good, but until we get established profits are going to be low due to setting up etc, this could take at least two years, and to be honest it could be too late for us as my current personal debts will kill the partnership. The business may not be showing a large profit but it is in profit and always has been. My mistake maybe the end to that. I do not understand why if it is my personal debt that it has to be the respectability of my business partner. On another note would we be advised to contact our mortgage lender for a loan as there is a large amount of equity in the property, but I suspect my credit rating is shot due to the credit card debt, I know I applied for another card and loan and was refused.
Thanks for all your help.