What are our options?

Lisaloppylulabell

Hi, sorry I've posted similar before but can't find it now duh!

My husband is self-employed and has gotten into a lot of debt from people not paying him, therefore, he was unable to pay anyone else and we got in a huge mess. He signed up to the business debt line and did all the budget and it's basically coming out that he didn't earn enough last year to cover the bills at work and at home. They said they cannot set up an IVA if he has no money which makes sense. What should he do? He has 2 credit cards at around the 5k mark each, a finance loan we have that is around 6k, he has just had HMRC hit him with a large VAT bill of 7k and everyone wants their money now. We just managed to clear our council tax bill so don't have to worry about that one until April now and we have paid the mortgage for this month so that is safe for now. He really doesn't want to declare bankruptcy but I'm worried this is becoming his only option.

He has put his rates up now and de-registered for VAT as he was on the voluntary scheme anyway. We are hoping that HMRC will agree to a payment plan to pay off the VAT as there is no way we can clear it in the timescale they've given us. On his new rates he will bring in enough money to cover home and work bills and he will be able to afford to pay a bit of something but the debt line said at the moment they can't help us.

We just got our house valued and we have £40,000 in it, unfortunately, I don't think the mortgage company will let us remortgage as we have missed a number of payments this year - we have eventually caught up though. We can't sell either as we would have nowhere to go as nowhere would let us buy or rent due to the late payments. I really don't know what to do and my husband is panicking. We have two kids too, age 8 and 6 so it's not like we can crash at a family members till we got back on our feet so keeping the house is a priority for us.

Any ideas for what we can do besides bankruptcy? I will do an SOA if someone can point me to it but the budget we filled out for debtline shows we have a deficit of around 300 a month!

Pixie5740

Lisaloppylulabell wrote: »

Hi, sorry I've posted similar before but can't find it now duh!

My husband is self-employed and has gotten into a lot of debt from people not paying him, therefore, he was unable to pay anyone else and we got in a huge mess. He signed up to the business debt line and did all the budget and it's basically coming out that he didn't earn enough last year to cover the bills at work and at home. They said they cannot set up an IVA if he has no money which makes sense. What should he do? He has 2 credit cards at around the 5k mark each, a finance loan we have that is around 6k, he has just had HMRC hit him with a large VAT bill of 7k and everyone wants their money now. We just managed to clear our council tax bill so don't have to worry about that one until April now and we have paid the mortgage for this month so that is safe for now. He really doesn't want to declare bankruptcy but I'm worried this is becoming his only option.

He has put his rates up now and de-registered for VAT as he was on the voluntary scheme anyway. We are hoping that HMRC will agree to a payment plan to pay off the VAT as there is no way we can clear it in the timescale they've given us. On his new rates he will bring in enough money to cover home and work bills and he will be able to afford to pay a bit of something but the debt line said at the moment they can't help us.

We just got our house valued and we have £40,000 in it, unfortunately, I don't think the mortgage company will let us remortgage as we have missed a number of payments this year - we have eventually caught up though. We can't sell either as we would have nowhere to go as nowhere would let us buy or rent due to the late payments. I really don't know what to do and my husband is panicking. We have two kids too, age 8 and 6 so it's not like we can crash at a family members till we got back on our feet so keeping the house is a priority for us.

Any ideas for what we can do besides bankruptcy? I will do an SOA if someone can point me to it but the budget we filled out for debtline shows we have a deficit of around 300 a month!

Do Business Debtline really not have any options on the table even if the only option at the moment is bankruptcy?

If push comes to shove and you have to sell your home you will be able to rent somewhere. Landlords and letting agents won't know about your late payments because all they have access to are your public credit files which show CCJ and insolvency so if you have to rent try to find somewhere before those things are recorded on your credit files. That said it is possible for bankrupts to find a landlord willing to take them on.

Are the 2 credit cards business or personal?

What action has your husband taken to recover money from people who haven't paid him?

fatbelly

Your previous thread is here

https://forums.moneysavingexpert.com/discussion/5929894/bankruptcy-threat-question-about-the-future

Bankruptcy is crazy if you own property with 40k equity. Although HMRC can force it via a statutory demand, they are unlikely to do so for 7k and can be thwarted (not a word I often use) with a 2k payment.

Look, post a soa and let's look at it. Calculator here:

http://www.stoozing.com/calculator/soa.php

One comment I am going to make as soon as I see it is that you should be paying your council tax over 12 months. I know it's a priority debt but clearing it with 3 months of the year still to go makes no sense.

Lisaloppylulabell

Ok I think this is everything - except I forgot his VAT bill which is 6300

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2 (hubby’s work car and mine for school runs)

Monthly Income Details[/b]
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 137
Other income............................ 0
Total monthly income.................... 1937

Monthly Expense Details
Mortgage................................ 573.7
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 194
Electricity............................. 120 - Gas & Electric are high due to arrears, we are overpaying
Gas..................................... 120
Oil..................................... 0
Water rates............................. 25
Telephone (land line)................... 0
Mobile phone............................ 90
TV Licence.............................. 13
Satellite/Cable TV...................... 20 (in contract until Sept 2019, lowest they will go)
Internet Services....................... 29 (in contract until next year, lowest they will go)
Groceries etc. ......................... 280 (70 a week for 4 people but I have diet problems gluten free etc)
Clothing................................ 0
Petrol/diesel........................... 120
Road tax................................ 135
Car Insurance........................... 60 (for both cars)
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 9
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1818.7


Assets
Cash.................................... 0
House value (Gross)..................... 230000
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 235000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 146000...(573.7)....0
Total secured & HP debts...... 146000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Finance (solar panels..........6056.05...88........0
Tesco credit card..............5000......50........0
MasterCard credit car..........5017.57...96........0
Total unsecured debts..........16073.62..234.......-


Monthly Budget Summary
Total monthly income.................... 1,937
Expenses (including HP & secured debts). 1,818.7
Available for debt repayments........... 118.3
Monthly UNsecured debt repayments....... 234
Amount short for making debt repayments. -115.7

Personal Balance Sheet Summary
Total assets (things you own)........... 235,000
Total HP & Secured debt................. -146,000
Total Unsecured debt.................... -16,073.62
Net Assets.............................. 72,926.38

The credit cards are personal ones yes. We have chased the non payers numerous times. Finally got one to pay this week but there are around 4 who still owe us a good 5000 in total which would really help right now. We are giving them until the end of January and then we are looking to go to small claims court.

Like I mentioned hubby is putting his rates up as of January 1st and reckons with that we will be in the green next year (if everyone pays him when they are supposed to!) but we have vultures at the door right now.

I have gathered all the loan stuff together and am thinking of seeing if they will accept a settlement figure and seeing if we can raise the funds somehow?

I have cut down everything I can think of. We don’t get haircuts or buy clothes or go on holidays. The kids christmas gifts this year are pitiful, mostly just nick nacks really. I can’t see anywhere else I can save money. I will however ask about spreading next years council tax over 12 months! When I say we cleared it I mean we cleared a massive amount of arrears that had built up.

We owe Scottish Power about 1800 in total which they are spreading out over our payments (I think there’s something fishy going on with what they say we owe though - we have lived in our home for 4 years and twice they have stung us with a bill of 1500, even though we were paying our bill monthly - I don’t understand it but they say it’s correct!) - National Debtline mentioned a hardship fund so I’m going to ring them too and see if they can do something about the amount.

Hubby is going to ring HMRC tomorrow and beg for a payment plan - he was voluntary VAT which he has cancelled so there’s no way he can accrue a large bill again so hopefully that will go in his favour.

I think my hubby has been burying this for a long time (about a year I think from what we owe) and the whole extent of it has finally come out so I am trying my best to help him out of it but I can’t work and I just feel kind of useless in trying to get this fixed. I think we are going to have to sell the house - If we could hold the creditors off for a few months I think we might be ok. National debtline said no IVA though until we show we have some money left over at the end of the month. We are waiting for hubby’s year end info from his accountant to get the exact figures for everything so hopefully we will know where we stand more then.

Sorry that is a lot of rambling!

enthusiasticsaver

The credit cards are low priority so I would write to them asking for breathing space and offering nominal payments of £1. What happens with the finance loan if you default? Do they remove the solar panels? Is the road tax really £135 per month? Your mobile phones are way too high and I would spread the council tax over 12 months including this years. Priority is mortgage and tax, council tax and utilities. I would look into a hardship fund for your gas and electric. Some people in low income have had payments but technically £1800 is not low income. Is that guaranteed income or average?

enthusiasticsaver

Can you not work? Even supermarket stacking shelves in the evening or pub work would give you a bit extra.

Lisaloppylulabell

Sorry the £135 is for the year. The mobile phones are both stuck in contract. Mine is due to be done in May so I'm going to go pay as you go at that point.

I'm not sure if they would remove the solar panel? Maybe... I'll look into that one - they have moved us over to debt collectors for that one though.

I'm afraid I can't work, well a normal person job anyway, I have multiple chronic illnesses that can sometimes render me bedridden so I couldn't have a normal job as I'd be sacked for never being there. I'm applying for PIP but not holding out much hope for that as a lot of people with my condition get turned down with frankly blatent lies put on their forms at their visits (but that's another story!). I have applied for home working jobs but nothing has come of it yet. I am just doing surveys and trying to get some freelance work but nothing is really coming of it.

I have just applied for the hardship grant and sent copies of my hospital letters along with it to see if that helps.

Will companies actually take a £1 a month payment? Do I just need to say we are in financial hardship and that's what we can afford?

Lisaloppylulabell

Ooh, also the mobile phones thing is for 2 phones plus an internet box thingy that my husband uses to get wifi at work - that's the technical name for it I'm sure lol

fatbelly

You need to polish up that soa - add the VAT debt, change the road tax, and consider some of those zeros:

Clothing................................ there are 4 of you so 50
Car parking............................. 0
Other travel............................ 0
Buildings insurance..................... 0 you need this
Contents insurance...................... 0 worth having a basic policy
Presents (birthday, christmas etc)...... 0 suggest 20
Haircuts................................ 0 10?
Entertainment........................... 0
Holiday................................. 0 really?
Emergency fund.......................... 0 try for 10

When you get clear with Scottish power, ditch them - they are awful

Check what you've signed up to with the solar panels - is there a charge registered against your property?

The HMRC VAT debt is a priority - the others probably not so probably token (or no) offers on them for now. See what HMRC will take and whether there's anything left for the non-priorities.

Sample letter here for a first step

https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

Edit: And your first post said you had 40k equity in the house, your soa shows 80k. Are we missing something?

SandraX

Lisaloppylulabell wrote: »

Sorry the £135 is for the year. The mobile phones are both stuck in contract. Mine is due to be done in May so I'm going to go pay as you go at that point.

I'm not sure if they would remove the solar panel? Maybe... I'll look into that one - they have moved us over to debt collectors for that one though.

I'm afraid I can't work, well a normal person job anyway, I have multiple chronic illnesses that can sometimes render me bedridden so I couldn't have a normal job as I'd be sacked for never being there. I'm applying for PIP but not holding out much hope for that as a lot of people with my condition get turned down with frankly blatent lies put on their forms at their visits (but that's another story!). I have applied for home working jobs but nothing has come of it yet. I am just doing surveys and trying to get some freelance work but nothing is really coming of it.

I have just applied for the hardship grant and sent copies of my hospital letters along with it to see if that helps.

Will companies actually take a £1 a month payment? Do I just need to say we are in financial hardship and that's what we can afford?

Dear OP

As another poster said, can you not at the least take up part time work, day work, night work, stacking shelves working in a warehouse/celaner as it takes the weight off you when one has cleared, paid back money they own other people.

sourcrates

Lisaloppylulabell wrote: »

I'm afraid I can't work, well a normal person job anyway, I have multiple chronic illnesses that can sometimes render me bedridden so I couldn't have a normal job as I'd be sacked for never being there.

SandraX wrote: »

Dear OP

As another poster said, can you not at the least take up part time work, day work, night work, stacking shelves working in a warehouse/celaner as it takes the weight off you when one has cleared, paid back money they own other people.

Already covered here.