Leaving business partnership before entering DMP

TroubleOne93

Good morning 

I’m hoping someone can help me in deciding what’s best in my situation…

I’ll try to keep it as short and factual as possible. 

I’m around £12000 in debt with seven different creditors.(last week I got
a default letter from Aqua, my biggest debt). I’ve also got a car in HP that’s still got around £6000 left to be paid off, but I’m up to date with the payments.

Few months ago I started a business partnership with two family members, but it’s still bringing very little to no money which is partially why I’m in this position. To start the business I didn’t leave my full time job but I went to a zero hr contract. I manage to earn enough to cover the essential bills, between me and my husband we manage to cover all priority expenses.

I’ve spoken to the debt charity helpline for self-employed, which turns out complicates my situation even further. I’d like to go into DMP as I thought I haven’t got any assets (apart from the HP car) but the adviser told me the partnership’s assets can be liable for my personal debts.

There’s not much in there - it’s a bakery with two domestic ovens and second hand fridges. The most expensive item is the coffee machine and the till, I’d think they’re both  worth around £1500.

Nevertheless I want to protect my partners from creditors going after basic equipment that they need to run the business.

Im thinking of leaving partnership, so the two partners can carry on trading, stop being self-employed and enter DMP based on my zero hr employment. 

My other “wish” apart from keeping the partnership’s assets safe is to keep my HP car. 

Do you think I’m being realistic in thinking this could work? 

Many thanks 

sourcrates

Hi,

You posted on here before I could move your other thread, I've now deleted that one for you.

Just organise the debt management plan yourself, its a totally unregulated arrangement (at present anyway, assuming your in England or Wales) 12k is not the worst debt I've seen, creditors are not going to come after your assets for such a small amount of money, that`s not what happens, its not like you owe tens of thousands, and are seeking bankruptcy, all that will happen is the debts may be sold or passed over to a debt collector.

A self managed DMP is something you run, according to your own rules, basically you arrange to repay the debt at a lower rate over a longer period of time, no one will come looking to offset your alleged assets, they will be quite happy with a regular monthly payment of a figure that is affordable to you, that`s it, no drama, you can treat the car as an essential payment, so that's all good, not complicated at all, you can choose to leave the partnership if you wish, that is your choice.

I think the advice you received was erring on the side of caution, making you aware of what could happen, not necessarily what will happen.

The only time any assets would come into play, is if a creditor takes you to court, obtains a CCJ against you, then, at further cost to themselves, instructs bailiffs to attend your property to seize assets, now if your paying your debts off via a DMP, and at the rate specified by the court, then this cannot happen, so its all irrelevant to your situation anyway.

TroubleOne93

Thank you! I couldn’t fu d my other post hence I stared this one …

What happens if my situation improves and let’s say I make more money, is it automatically put towards the debt repayments? (in the case of being managed by the third party) 

sourcrates

That is what usually happens yes, your account will be reviewed annually, but you can refuse, say if your expenses have gone up for example.

Using one of the free debt charities is ok, but its not difficult to manage this yourself, the obvious advantage is you decide who gets the share of the pie, not some 3rd party in a call centre somewhere.

Basically the debt charities are there for those unable to help themselves, if you can use a computer, and are familiar with online banking, then there is no reason why you should not go self managed, of course its down to personal choice, the important thing is the debt is repaid at an affordable rate.

Do not under any circumstances take advice from, or sign up with, a fee charging debt management company, all they want is your money, the service is free with all reputable debt charities, and is of course free if you organise it yourself.

TroubleOne93

Thank you so much for your help! 

Ideally, I’d like to stay in the partnership as well as work a few shifts a week on the zero hr contract. I need to think about this till Monday and then make my mind up. 

Thanks again, this forum is a life saver