New Here - drowning in debts and desperate for advice!

MrsTinks

I think we need to have clarified if the £3000 is really a loan or not... if it is then moving back to the mortgaged house isn't going to solve anything... He's going to have to find a proper job with a steady salary! And stay at home mum... is gonna have to think about maybe doing some ironing at home for othe people to bring some extra cash in.

beingjdc

MrsTine wrote: »

I think we need to have clarified if the £3000 is really a loan or not...

If it's a genuine Director's Loan then it's not a 'loan' as such - it's repayment of the capital they have invested in the business. But there's a maximum amount that can be taken out that way without paying tax. Effectively, the amount they originally put in.

tinkerbell84

How the heck are you spending that much on rent?? A 2 bed a much nicer part of SW London costs about £1300 per month! Hammersmith is quite grotty.

You could rent in Fulham or Chelsea for what you're paying!!!

And the £69 per month for buildings insurance is crazy!

delboypass

Surely they are defrauding the benefits system??

Even if only paying £430 a month salary, they would have to take the rest out in Dividends and claim this on their tax return...

I can see the tax man coming after you once you have discolsed this years tax return...

And then the benefits people to reclaim the over payment...

1 thing i wouldnt have done is posted on a public forum that I was defrauding benefits system and the tax man in the same post....

chocolatechipcookies

EXPAT wrote: »

£6397 per month income?

How the heck does someone get into debt on those earnings!

:mad:

I wanna know how they get £500 in tax credits! We make about £2,000 per month at the most and we get nothing.

beingjdc

delboypass wrote: »

Surely they are defrauding the benefits system??

Not if they don't take out more than they put in when they set it up. You're allowed to treat your business as a savings account. Start treating it as a loan book and you will hit problems if you don't repay it in short order.

owitemisermusa

I think more details found here will clear up a lot of confusion. The OP was directed here after posting on the HBS&R board.

Read that for background info.

Rabiddog_2

Well, the real problem is they shouldn't have bought a 4 bed House and started a new business at roughly the same time. That directors loan (£3000 EVERY month?) definitely needs clarification as others have said. The tax and benefit implications could be quite devastating. (eg paying back the loans and the overpayment of benefit). Sell the house and swallow the debt, buy again when the business is five years successfully profitable.

PasturesNew

Champagne lifestyle, beer money.

- Ditch the rented flat. Stop taking the Directors Loans.
- Move back into your house (with the noisy neighbours) and take in lodgers.
- Husband will have to sleep at the business 1-2 nights a week and accept that's how it has to be for awhile.
- Husband should reorganise staff/shifts at the business to free himself up for a few hours a couple of times a week enabling him to get home earlier on a couple of days to be with the family
- Take in 1-2 lodgers. Especially if you can get the Mon-Thu only types (contractors).
- Get the house on the market, sell it for whatever you can get.

If all that works and you get out with some dignity intact, rent somewhere HALF the cost of your current mortgage.

ALIBOBSY

they are surely heading for a big benefit overpayment. That 3k per month would have to taken into account somewhere,either as income or as capital (as in when you have savings).
They must have lied to get the mortgage surely as well?
All these half truths are coming home to roost.
Looks like bankcrupcy to me sorry.
Hope you and baby are ok.
goodluck
ali