Oh my God I'm in such a mess with my mortgage - please help

Deals_2

get a mortgage and everything sorted again after a year?

Conrad wrote: »

One of my brothers went bankcrupt since the new 'easier' rules cam in - best thing he ever did. Now lives stress free with no debts. He then got a new mortgage just over 1 year later. No one took the car, no one sold thier TV and yes they carried on with a Baclays Bank account and at no time did anyone suggest he couldn't keep his business on a sole trader basis.

Best of luck

Jimuth

I actually found both threads got me pretty angry! :mad:

Can't move because the child needs her nursery place... errrrr, you're a stay at home mum?

Had to move because OH wanted to see child? Ummmmm, isn't that what a lot of people have to give up (I know some of my friends and colleagues in London complain about that a lot) ... You could enter into a huge debate re: work/life balance but the usual thinking is that a short amount of pain is worth it in the long run.

"Cheating" the benefits system to the tune of £500 a month... errrrr :mad:

I'm sorry but it seems, as the OP admits, that the house purchase last year was a mistake, then she's going to have to pay the price for the mistake. A mistake which was then compounded by moving out again! Jeez!

Voluntary repossession and/or bankruptcy the likely payback, surely?

The mind boggles at the thought processes that must have gone on to buy a house last summer when the warning signs were there re: the economy... especially when the company makes frivolous junk.

Sorry, but a mistake that huge comes at a pretty price.

Dithering_Dad

My accountant has advised all of his clients not to touch director's loans with a barge pole. Apparently, the Inland Revenue uses them as 'red flags' and it raises your chances of a IR audit by quite a large percentage.

You have to also wonder if the OP's husband is also running his business correctly in regard to Corporation tax and VAT. The law clearly states that the company has to be able to cover its liabilities at all times. If they're dipping into the CT & VAT money then the Revenue will 'unleash hell'.

I had a letter from the Revenue the other day, threatening bailiffs, court action and it said that they could be round my house at any point in the next few weeks to seize possessions. This was over a £150 P35 debt they said I owed!! £150 and threatended with the bailiffs!! :mad: After I phoned them (in a right panic) I discovered that they had forgotten to remove the £150 incentive that they pay to small businesses for submitting tax returns on-line from my bill and so I actually owe nothing.

Even though it's sorted and it was their fault, it's left me a bit shaken. Can you imagine what they would be like if you defaulted on a Corp Tax bill of £20k!!??? :eek:

SouthCoast

I don't think that OP has actually told us that the business is a Ltd company.

BLOO_LOO_2

You are in dreamland darling.

all you can do is cut costs. If you dont, you will both be bankrupt and your husband wont BE in business. Move back, or sell and deal with the banks.

Married_Mum_of_2

Thanks for all your comments people - we're seeking professional advice as of now.

PasturesNew

Married_Mum_of_2 wrote: »

Thanks for all your comments people - we're seeking professional advice as of now.

Thanks for taking the time to come back and let us know.

Good luck with that.

Dithering_Dad

SouthCoast wrote: »

I don't think that OP has actually told us that the business is a Ltd company.

We know because the OP is taking a loan from the company to avoid income tax. You only do this from a limited company. In a partnership or sole-trading company, all of the money is the owners (apart from tax) and is taxed as normal income.

This from a website showing the difference between a Limited company or a sole trader/partnership:

"There are a small number of ways you can take money out of a limited company – dividends out of profits, a salary or by repaying a directors loan account which is in credit. A sole trader/partnership on the other hand can take money out of the business as frequently as they like, provided it does not leave the business short of funding."

the_bread_baron

bottom line is sadly, you've been swimming out of your depth. pure and simple. why you paid so much for a home is beyond me when your trying to have a family and a business. when you take too much on, you find you cannot cope. its no suprise. if i took on a 400k house, id have problems too.

i doubt theres any advice thats going to save you. im not trying to be mean, but trying to be realistic. something thats been lacking.

sell the home as low as you can as fast as you can, rent somewhere cheaper and stress free and try to pay back the remaining balance owed.

or go bankrupt.

not much of a choice, but then its not much of a situation you've gotten into.
there are also the sell your home-rent it back companies, but this will still leave you owing £25-£60k shortfall on the mortgage taken out, as these companies pay low prices for homes.

you bought a £200k home for £400k in a massive boom.
what more is to be said.

Dithering_Dad

Just to add to the OP's woes...

You do realise that you have to pay the loan back within certain timescales or it becomes a taxable benefit?

"Directors who receive loans from the company either interest free, or at a beneficial rate, are treated as receiving a benefit in kind.

Under the general tax rules the company must notify the Revenue of such loans within twelve months of the end of the accounting period to which the loan relates and must pay tax at the rate of 25% of the loan or overdrawn account balance.

The tax is payable nine months after the end of the accounting period in which the loan is made, unless the loan is repaid before the due date."