Being sucked into the black hole of debt

Poire

A familiar story: I got behind with payments, set against increased living costs and decreased working hours and pay. I'm self employed but barely make anything since covid. No benefits or savings, just selling stuff on eBay to raise money for food. I do however own my property - a one bedroom flat that may be worth about £100k. How do I proceed? I would need a loan to cover the debts, some of which have reached the bailiff-arriving stage. All in, about £5.5k. Can I get a loan based on the future sale of the flat? I would put it on the market ASAP to beat the bailiffs. Some advice lines were not able to help: StepChange don't offer help to the self employed, Business Debt Line only offer help to businesses. PayPlan essentially say 'you have to pay it back'. &c &c. My urgent query is about loans based on a future property sale... and any tips you may have for this specific subject ...and perhaps about any spare tins of tuna in your kitchen cupboard.

Emmia

Is it time to consider paid employment rather than self employment? I appreciate this may not be what you want to do, but if your business isn't making enough to support you then I think you need to consider other options.

Are you claiming any benefits to which you might be entitled? Turn2Us has a calculator which might be helpful.

https://benefits-calculator.turn2us.org.uk/

Once you sell your flat, where will you live? Renting is expensive and has downsides when compared with a property you own.

Is the property mortgaged?

MattMattMattUK

Poire said:

A familiar story: I got behind with payments, set against increased living costs and decreased working hours and pay. I'm self employed but barely make anything since covid.

If your self-employment is not profitable then it may be time to consider other employment options.

Poire said:

No benefits or savings, just selling stuff on eBay to raise money for food

Have you checked if you may be eligible on something like EntitledTo? If not then worth the five minutes it takes. 

Poire said:

I do however own my property - a one bedroom flat that may be worth about £100k.

Do you live in the property, is it rented out? Mortgage?

Poire said:

How do I proceed? I would need a loan to cover the debts, some of which have reached the bailiff-arriving stage. All in, about £5.5k. 

When you say bailiff, do you mean court bailiff, High Court Enforcement Officer, or do you mean debt collecting womble with no power? Have you had any CCJs issued against you yet?

Poire said:

Can I get a loan based on the future sale of the flat?

Probably not and if you have very limited/no income then you will have almost no chance of getting a loan.

Poire said:

I would put it on the market ASAP to beat the bailiffs.

It would be worth starting that process, getting an estate agent to value it etc. and then you know your position. 

Poire said:

Some advice lines were not able to help: StepChange don't offer help to the self employed, Business Debt Line only offer help to businesses. PayPlan essentially say 'you have to pay it back'. &c &c. My urgent query is about loans based on a future property sale... and any tips you may have for this specific subject ...and perhaps about any spare tins of tuna in your kitchen cupboard.

They cannot advise you on taking out loans or employment.

Can you complete an SOA so we can get a proper handle on your position?
https://www.lemonfool.co.uk/financecalculators/soa.php

I thin your first priority needs to be finding gainful employment as the self-employment route is obviously not working for you. 

Emmia

@Poire £5.5k might seem like a lot of money to owe, but actually it's a relatively small debt (although I understand you're stressed about it) in many ways, that you could tackle by getting a job.

tacpot12

Selling your flat when you don't need to is a bad idea. The only way to get a loan against it would be to have a charge put on the property, which will mean borrowing more than you need to, to pay the legal fees. 

Have you tried National Debtline for debt advice?

Have you reviewed the information on the Citizens Advice website about bailiffs? Bailiffs - Citizens Advice 

Call your local Citizens Advice for referral to a foodbank (tins of Tuna may be available ). If you have prepayment meters for Gas or Electric, they may also be also help you with a fuel voucher. Also ask them if they can provide you with debt advice if National Debtline won't help you. 

Check out your local council for their Crisis Grants and Household Assistance Funds.

Check using one of the benefits calculators listed here: Benefits calculators - GOV.UK (www.gov.uk) to see if you can get Universal Credit while self-employed. You may not be able to as your business has been running for a while, but isn't bringing enough in. Seeking paid employment is a good idea. Your experience as a sole trader should give you additioanl transferable skills that might be of use to many employers. 


 

Poire

Emmia said:

Is it time to consider paid employment rather than self employment? I appreciate this may not be what you want to do, but if your business isn't making enough to support you then I think you need to consider other options.

Are you claiming any benefits to which you might be entitled? Turn2Us has a calculator which might be helpful.


Once you sell your flat, where will you live? Renting is expensive and has downsides when compared with a property you own.

Is the property mortgaged?

I own it outright

Poire

tacpot12 said:

Selling your flat when you don't need to is a bad idea. The only way to get a loan against it would be to have a charge put on the property, which will mean borrowing more than you need to, to pay the legal fees. 

Have you tried National Debtline for debt advice?

Have you reviewed the information on the Citizens Advice website about bailiffs?

Call your local Citizens Advice for referral to a foodbank (tins of Tuna may be available ). If you have prepayment meters for Gas or Electric, they may also be also help you with a fuel voucher. Also ask them if they can provide you with debt advice if National Debtline won't help you. 

Check out your local council for their Crisis Grants and Household Assistance Funds.

Check using one of the benefits calculators listed hereto see if you can get Universal Credit while self-employed. You may not be able to as your business has been running for a while, but isn't bringing enough in. Seeking paid employment is a good idea. Your experience as a sole trader should give you additioanl transferable skills that might be of use to many employers. 


 

This sounds ideal - don't mind paying a charge

Poire

Emmia said:

@Poire £5.5k might seem like a lot of money to owe, but actually it's a relatively small debt (although I understand you're stressed about it) in many ways, that you could tackle by getting a job.

Too ill, hence no income - though I haven't been diagnosed with anything officially and tests are due in approx 20 months time

Grumpelstiltskin

OP Look for that small amount of debt under no circumstances think about putting it against your property.

Get over to the Debt Free Wannabe board, complete the SOA honestly and you will get the best advice on how to deal with your problem.

MEM62

Selling you property and going into rented for the sake of £5k of debt is about the worst decision you can make.  You will spend more than that on the first few months rent and will then be paying rent for the foreseeable future.  As @Emmia has pointed out, your way forward is employment. 

With respect to the bailiffs, I guess you must have no engaged with your creditors for things to get this far.  Go back to the Court and explain your circumstances.  See of they will grant you some breathing space to get yourself into a position where you can agree a payment plan.        

Emmia

Poire said:

Emmia said:

@Poire £5.5k might seem like a lot of money to owe, but actually it's a relatively small debt (although I understand you're stressed about it) in many ways, that you could tackle by getting a job.

Too ill, hence no income - though I haven't been diagnosed with anything officially and tests are due in approx 20 months time

If you're too ill to work, then you need to look at benefits that you may be able to claim. I wouldn't wait the best part of two years until you may or may not have a diagnosis. You need to act now