Help required with large Persistent Credit Card Debt. Have had a recent first Default.

theville32

Let me know if I should do my own SOA, if that will help? Obviously it will be much worse as I am not making any money at the moment, or very little.

Smudgeismydog

The new SOA still shows a monthly shortfall, as @theville32 asked;

Have you considered getting a PAYE job?

RAS

It is very difficult to give you decent advice. 

You have a business which doesn't appear to be producing income?

You have a domestic budget that appears to be funding c£1500 monthly of business costs?

Have you spoken to business debt line yet. This is vital because people here can't advise on your commercial debts and you have commercial and personal debt with the same bank.

It's also vital that you separate your business and domestic accounts. That includes stuff like business mileage. 

Your £1800 pm contract lost in Covid appears to have barely covered your business costs? Appreciate that you also lost other freelance work at the same time but that's also dwindled.

You originally indicated that you intended to cease  the business because of overheads. It now appears that you are hoping to keep it ticking over? At what cost?

Have you been funding business losses from personal credit cards?

So speak to business debtline on Monday, explain your situation, the complications with Barclays and ask them about the bounce back and commercial loan. It is important that you do this before deciding to default on any debts with Barclays.

Your priority is to find regular paid work. Demand isn't as strong as during Covid when companies were screaming for staff. But you'll still find work that pays more than you appear to have netted over the last 5 years.

It may not be as interesting and adjusting to employee status can be a challenge but getting on an even keel financially will reduce stress. And once you're covering essential living costs, you can look to rebuild the photography if you wish. 

theville32

Smudgeismydog said:

The new SOA still shows a monthly shortfall, as @theville32 asked;

Have you considered getting a PAYE job?

Hi Smudgeismydog, thanks for your comments. Yes, I have considered getting a PAYE job and are currently keeping an eye out for these. Right now my priority is to sort my equipment etc out of my rented Studio so that I can cease paying those associated expenses (£1000 p/mth). Once this is completed, I will look for freelance work first as well as keeping an eye out for a PAYE job. Thanks!

theville32

RAS said:

It is very difficult to give you decent advice. 

You have a business which doesn't appear to be producing income?

You have a domestic budget that appears to be funding c£1500 monthly of business costs?

Have you spoken to business debt line yet. This is vital because people here can't advise on your commercial debts and you have commercial and personal debt with the same bank.

It's also vital that you separate your business and domestic accounts. That includes stuff like business mileage. 

Your £1800 pm contract lost in Covid appears to have barely covered your business costs? Appreciate that you also lost other freelance work at the same time but that's also dwindled.

You originally indicated that you intended to cease  the business because of overheads. It now appears that you are hoping to keep it ticking over? At what cost?

Have you been funding business losses from personal credit cards?

So speak to business debtline on Monday, explain your situation, the complications with Barclays and ask them about the bounce back and commercial loan. It is important that you do this before deciding to default on any debts with Barclays.

Your priority is to find regular paid work. Demand isn't as strong as during Covid when companies were screaming for staff. But you'll still find work that pays more than you appear to have netted over the last 5 years.

It may not be as interesting and adjusting to employee status can be a challenge but getting on an even keel financially will reduce stress. And once you're covering essential living costs, you can look to rebuild the photography if you wish. 

Hi RAS, thanks for your comments, they are very helpful. Yes, you are correct...my business is struggling to produce income and our domestic budget is currently covering around £1500 of monthly business costs. The intention is to cease the Studio business at the end of March - when I have given notice to move out. If any work comes in from old/existing clients then I will of course try to do this from home to make some extra money - without the high overheads.

The freelance work that I was doing pays a nice day rate, which has actually increased since Covid. I am hoping to earn at least £2-3k p/mth from this work. Obviously it will take 3-6 months to build up my client-base again and be working regularly. The key is that I won't have the constant £1000+ coming out of my account each month.

Any business expenses were put on my business credit cards. I tried hard to keep everything seperate there, as well as business expenses/mileage etc.

As discussed, I will call Business Debtline on Monday to see where I stand there. 

I will let you know how I get on. Thanks again for all your time and help.

katsu

Once the studio rent stops in March, you'll be able to meet your minimum payments I think, unless I'm missing something? 

curlu

theville32 said:

With regards to context, if the general consensus on the forum is that I should stop paying all of my personal credit cards - please let me know. Please note that this approach is extremly scary for me and will be the biggest step I have made to do with trying to sort my CC debt out. So I will require a lot of reassurance from as many people as possible that this is the best option going forward. I hope thats ok?

If stopping all credit card payments is agreed, then the next opportunity to do this would be the day after the 19th January. This is when I receive my next UC payment, although sometimes they can be a day or two late. I have my 2nd 'Halifax payment plan' payment coming out on the 23rd January, so it would be good to cancel Standing Orders and DD's before the 23rd if possible. 

As always, any help and guidance greatly appreciated and thanks again everyone for all your time and help with this very stressful matter.

Hi there, just wanted to say I’m at the same starting point as you. My first missed payments will be this month, and I have started receiving letters advising that creditors are aware that I have cancelled my DDs and are inviting me to set them up again. It is stressful to think I will get 7 of these and then all the missed payment letters, but everyone on here has been very reassuring. It is tempting to go straight for a DMP but then I won’t have the emergency fund I need. 

Having always found a way to pay, it’s such foreign territory to stop paying as I’ve always seen all debt as a must pay…this forum has been revolutionary.
Hang in there.

theville32

curlu said:

theville32 said:

With regards to context, if the general consensus on the forum is that I should stop paying all of my personal credit cards - please let me know. Please note that this approach is extremly scary for me and will be the biggest step I have made to do with trying to sort my CC debt out. So I will require a lot of reassurance from as many people as possible that this is the best option going forward. I hope thats ok?

If stopping all credit card payments is agreed, then the next opportunity to do this would be the day after the 19th January. This is when I receive my next UC payment, although sometimes they can be a day or two late. I have my 2nd 'Halifax payment plan' payment coming out on the 23rd January, so it would be good to cancel Standing Orders and DD's before the 23rd if possible. 

As always, any help and guidance greatly appreciated and thanks again everyone for all your time and help with this very stressful matter.

Hi there, just wanted to say I’m at the same starting point as you. My first missed payments will be this month, and I have started receiving letters advising that creditors are aware that I have cancelled my DDs and are inviting me to set them up again. It is stressful to think I will get 7 of these and then all the missed payment letters, but everyone on here has been very reassuring. It is tempting to go straight for a DMP but then I won’t have the emergency fund I need. 

Having always found a way to pay, it’s such foreign territory to stop paying as I’ve always seen all debt as a must pay…this forum has been revolutionary.
Hang in there.

Hi curlu, thanks so much for your post and sharing your own position. It sounds very similair to mine and I feel exactly the same way you do - that I need to somehow pay all these credit cards back when I obviously don't have the income to do so. Its all so stressfu! My biggest fear is will the debt collectors come after me to try an reclaim the debt? We don't really have anything of significant value and need the car for my wifes work/school runs etc. Thanks again for sharing, its been reasurring to hear that others are going through the same thing as me, even though I wouldn't wish this situation on anyone else. Cheers

theville32

Hello, just an update as I spoke to Business Debtline yesterday. According to them and my Sole Trader status, there is no seperation between personal and business debt eg any defaults ettc will be added to the same credit file. 

- Barclays Business Card: I was warned that Business Credit cards are not normally covered under the same Consumer Credit Act, which personal credit cards have. I tried calling Barclays to establish whether their business CC was covered, but could not get this info from them. Does anyone know where I could find this out by any chance? Apparently the CCA helps to prevent CCJ's etc. It would be interesting to hear other people's thoughts on this if they have any expereince with business credit cards.

-Bounce Back Loan: Apparently this is guaranteed by the Taxpayer. The person I spoke to at BusDebtline did not seem to think this debt would be too difficult to manage and would be similar to personal debt.

It would be great to hear your thoughts and thanks for any further help you can give me.

theville32

katsu said:

Once the studio rent stops in March, you'll be able to meet your minimum payments I think, unless I'm missing something? 

Hi katsu, thanks for your message. Yes, I will not have to pay for the £1000 p/mth of studio rent/expenses. However, I may have to put some of my equipment into storage which will cost money (£150-250 p/thm?). I also need to start paying my share of the home rent/expenses asap, which would be £725 for rent and £125-150 for home expenses. 

I am also unsure whether UC will still be able to help, once my wife's new job's salary settles, my work expenses are reduced, my income increases etc. So there are a lot of variables including how much the freelance work will bring in and how soon. Thanks