50k Unsecured debts and can't see any way out.....

elsien

Also to add, because I have the memory of a goldfish and this is probably already been answered, you need to move any money you have coming in away from the bank with the overdraft into another bank that has no financial association. 

exponential

MissCarmen said:

Just want to say thank you for this thread. 
Sorry you're going through this Exponential, and reading this thread has really helped me too! 
I'm in a similar position to you, and am also self-employed. Not getting paid by clients has reeked havoc. 
I'm a bit further ahead in that I took a DMP with Payplan, but didn't fully understand the default thing. 
My default letters came really quickly (in the first 6 weeks and after I had made just 1 reduced payment on my DMP). I too am feeling the fear, but this forum helps. 
I've just posted about my situation. 
Wishing you all the best. 

You're welcome. 

It's weirdly refreshing when you realise it's not just you out there going through the same thing but even more so when you find someone in almost the exact same set of circumstances as you.
It's all going to be ok though, my mental wellbeing is already improved just through knowing that I don't have to scrabble together a ridiculous amount of money each month to pay these guys.
Being self-employed is both a blessing and a curse as you are free to pick and choose who you work for and how much you'll charge with the bonus of being more flexible with your time where needed but chasing outstanding invoices is the bane of my life and can mean the difference between you putting food on the table that week or not.

it's a shame you didn't realise what you could actually do but you chose a path that was right for you at the time and hopefully, it'll all work out ok in the end.

I'll check your post out and thank you for your best wishes, it means a lot! 

exponential

elsien said:

Also to add, because I have the memory of a goldfish and this is probably already been answered, you need to move any money you have coming in away from the bank with the overdraft into another bank that has no financial association. 

Hiya,

Yeah, I've opened a Monzo account which I'm pretty sure is detached from all the major high street banks.
All direct debits and standing orders have been cancelled or moved over including the one's you always forget about like Google pay, Paypal, Ebay etc etc.

Thanks for the heads-up though...

ManyWays

a CCJ will impact my ability to become a director if I go Ltd.
It doesn't, there are lots of reasons to avoid a CCJ but that isnt one of them 

exponential

ManyWays said:

a CCJ will impact my ability to become a director if I go Ltd.
It doesn't, there are lots of reasons to avoid a CCJ but that isnt one of them 

Ah yes, it would seem you are right. However, a CCJ will certainly have an impact on my ability to obtain insurance which would be big issue. 

Grumpelstiltskin

exponential said:

ManyWays said:

a CCJ will impact my ability to become a director if I go Ltd.
It doesn't, there are lots of reasons to avoid a CCJ but that isnt one of them 

Ah yes, it would seem you are right. However, a CCJ will certainly have an impact on my ability to obtain insurance which would be big issue. 

What makes you think a CCJ would make a difference to obtaining insurance?

This shows the number of CCJs issued in a 3 month period last year.

Sharp increase in number of CCJs issued in Q3, 2023 - UK Debt Collection News (ukdcnews.co.uk)

Do you think all of those people had problems with insurance?

A CCJ is not insolvency, bankruptcy or IVA do make a difference but CCJ a totally different ball game

exponential

Grumpelstiltskin said:

exponential said:

ManyWays said:

a CCJ will impact my ability to become a director if I go Ltd.
It doesn't, there are lots of reasons to avoid a CCJ but that isnt one of them 

Ah yes, it would seem you are right. However, a CCJ will certainly have an impact on my ability to obtain insurance which would be big issue. 

What makes you think a CCJ would make a difference to obtaining insurance?

This shows the number of CCJs issued in a 3 month period last year.

Sharp increase in number of CCJs issued in Q3, 2023 - UK Debt Collection News (ukdcnews.co.uk)

Do you think all of those people had problems with insurance?

A CCJ is not insolvency, bankruptcy or IVA do make a difference but CCJ a totally different ball game

Hi.

For public liability insurance and professional indemnity, one of the questions on the pre-application form was regarding CCJ's and if you currently have or have had in the last 5 years, a CCJ.
There is also the typical bankruptcy questions as normal.

Maybe it is a question specific to that particular insurer?

exponential

@RAS

I have a very quick question regarding the plan to default.

I have 3 credit cards that have very low limits of not over £500. These 3 cards could be quite easily paid off within a month. 
Would it be a good idea to just pay them up so it's 3 less creditors on my back or just treat them the same as the rest regardless of monies outstanding?? 

RAS

My advice would be to get a new savings account opened this month and stash the money you would have spent on creditors there. 

It's up to you if you feel that clearing those 3 debts would help you, then clear them over the following few months. But do put away at least half your money into the emergency/savings fund, then revert to stashing the whole lot.

You've got an unstable income and no safety net. You really do need that safety net.

I recall us asking a newbie how the emergency fund was going. Not well because the car had been sick. But she had paid for the repairs from the emergency fund, so it was working. She was glad to have had the cash to cover it rather than the stress of scrabbling to get it together.

Personally, I always suggest people have a budgeting fund, into which they stash money each month for the annual and occasional spends like cars maintenance. Monzo offer pots, which are ideal for this.

Given your unstable income stream, you may need to work the finances a bit more flexibly? Make sure your basic SOA covers your monthly essential spends. If it doesn't always, you need a "balancing" pot of say one month's money to keep out of trouble.

When you get paid, save for the HMRC, then cover the essentials, top up the balancing pot if needed and put extra into the budgeting fund. Cos' you ain't going to have access credit, so you need multiple safety nets.

Then pay the creditors. You may at some point have to explain that your income is erratic so you'll make a payment each month but it will vary.

exponential

RAS said:

My advice would be to get a new savings account opened this month and stash the money you would have spent on creditors there. 

It's up to you if you feel that clearing those 3 debts would help you, then clear them over the following few months. But do put away at least half your money into the emergency/savings fund, then revert to stashing the whole lot.

You've got an unstable income and no safety net. You really do need that safety net.

I recall us asking a newbie how the emergency fund was going. Not well because the car had been sick. But she had paid for the repairs from the emergency fund, so it was working. She was glad to have had the cash to cover it rather than the stress of scrabbling to get it together.

Personally, I always suggest people have a budgeting fund, into which they stash money each month for the annual and occasional spends like cars maintenance. Monzo offer pots, which are ideal for this.

Given your unstable income stream, you may need to work the finances a bit more flexibly? Make sure your basic SOA covers your monthly essential spends. If it doesn't always, you need a "balancing" pot of say one month's money to keep out of trouble.

When you get paid, save for the HMRC, then cover the essentials, top up the balancing pot if needed and put extra into the budgeting fund. Cos' you ain't going to have access credit, so you need multiple safety nets.

Then pay the creditors. You may at some point have to explain that your income is erratic so you'll make a payment each month but it will vary.

Morning RAS.

Thanks for your input, I appreciate it.

I am trying to think of the long game here knowing that I will have a lot of creditors (DCA's) to deal with on a self-managed DMP so if I can reduce the amount of DCA's then that will be a little bit of weight off my shoulders a bit further down the road after the defaults have been actioned.

I have opened both a personal and business Monzo bank account which I really like as, as you've mentioned, you can create savings pots which I am currently taking advantage of.
I have transferred all DD's and SO's to the Monzo personal account from my old bank account and have informed my clients of the need to pay into the new business account instead.

I can manage things very easily from the Monzo app which is great and, because it is app based, it tracks spending much better than Halifax could ever do.

Off to work now to earn some pennies.....thanks again.