Laying it all out is scary but I know I need to make a change…

Futurerichguy

I’m sick to death of being sick to death. Through a number of really dumb decisions I’ve found myself in a rather significant hole. I take full responsibility for ending up where I am and absolutely will get this sorted once and for all. I’ve not only had my lightbulb moment, the bulb has smashed over my head!

I’m going to sit down over the next couple of evenings to do a full a thorough SOA so I can see a clear picture of where I am and will post it below. What I do know is that I can’t afford my repayments so after consuming a lot of advice on here over the last week or so I’ve decided to stop all payments, build my emergency fund, and then go down the self managed DMP route once the accounts have defaulted. 

Before my SOA is complete there’s a couple of questions I have I wonder if anyone could help me with please?

In addition to my primary job, I am the sole Director of a Ltd company, which also has debt that can’t be repayed. There are 2 unsecured loans and 2 credit cards for which I am a personal guarantor for. If I take the same approach as my personal debt here, will these default and effectively get added to the pile of the personal debt and I can enter a DMP once they’ve defaulted? Or will something different happen as it’s a business debt? Any advice, opinions or experience on this would be greatly appreciated. 

Secondly, I have both a personal credit card and a business charge card with Amex. I’ve read that they take quite an aggressive approach to recover their money. Can I take the same approach of waiting for default and then entering a DMP or will I need to do something different with them?

Thanks in advance for any pearls or wisdom. 

ManyWays

Business creditors can be much more aggressive than debts that started out as consumer debts. Do you have a house with equity?

Futurerichguy

ManyWays said:

Business creditors can be much more aggressive than debts that started out as consumer debts. Do you have a house with equity?

Thanks for your reply.  

I was worried that might be the case. My approach would be the same though, to set up a payment plan to clear the balance so I’m hoping common sense would prevail. 

No I do not own my own house, it’s a private rental. Do you think that might change their approach?

enthusiasticsaver

Business debts do  get treated differently. If you do not own a property are you sure that a DMP  is the way to go?  Is there a reason you are not considering bankruptcy? 

Futurerichguy

Thanks so much for your input, I really appreciate it. 

I hadn’t considered bankruptcy at all to be honest. I need to do some research to understand what the implications of that are and whether that might be best for me. My immediate concern is how it would affect me getting another rental property if I had to move from where I am now. It just sounds so much more severe than a DMP, but I need to try and ignore any emotion and just do what’s best regardless. Whatever route I go down will be painful and I need to face into that. 

Ordinary_Yet_Unique

It may be easier for others to make suggestions about the way forward when they see the debt figures you are facing. Your SOA will also enable them to offer more support and ideas about the way forward.

Futurerichguy

Ordinary_Yet_Unique said:

It may be easier for others to make suggestions about the way forward when they see the debt figures you are facing. Your SOA will also enable them to offer more support and ideas about the way forward.

Yes absolutely, will try and get it finished today and posted. Trying to make sure I make it as accurate as possible first time. 

Nomunnofun1

You state that you are the director of a Ltd Company. Are the business debts in the company name? If so, have you formally personally guaranteed these debts? 

ManyWays

Nomunnofun1 said:

You state that you are the director of a Ltd Company. Are the business debts in the company name? If so, have you formally personally guaranteed these debts? 

yes, this was explained in their opening post in this thread

Futurerichguy

Nomunnofun1 said:

You state that you are the director of a Ltd Company. Are the business debts in the company name? If so, have you formally personally guaranteed these debts? 

Yes unfortunately there is a personal guarantee attached. 

sourcrates

Futurerichguy said:

Nomunnofun1 said:

You state that you are the director of a Ltd Company. Are the business debts in the company name? If so, have you formally personally guaranteed these debts? 

Yes unfortunately there is a personal guarantee attached. 

A personal guarantee means diddly squat if you don`t have the money to pay the debt, they can`t take what you don`t have, so any arrangement you can offer is more than likely to be acceptable, otherwise what are the alternatives for them? yep, they get nothing.