Feeling Sick about £60K of Debts!

[harvest]

Thanks Sequenci - the business doesn't have any debts at the moment - it's my personal debts that are the problem.

 

However, if they can advise me about the difficulties in getting cash from creditors on time (delays with clients paying invoices) then it's worth speaking to them I guess.

 

Please don't think I'm ignoring your help and advice - I was first concentrating on personal debts - if I possibly can - by perhaps resigning as a director - I could save the company from being drawn into my personal debt siuation - I don't know what the banks' view is on this whether my personal bank will start looking at the business (different accounts)?

[sequenci]

Thanks Sequenci - the business doesn't have any debts at the moment - it's my personal debts that are the problem.

they can help you plan to move forward and ensure that you will be able to keep things moving in the right direction.

However, if they can advise me about the difficulties in getting cash from creditors on time (delays with clients paying invoices) then it's worth speaking to them I guess.

I reckon so For a start have a look at this:

http://www.bdl.org.uk/images/bdl11_ew_CreditControl.pdf

 

Please don't think I'm ignoring your help and advice - I was first concentrating on personal debts - if I possibly can - by perhaps resigning as a director - I could save the company from being drawn into my personal debt siuation - I don't know what the banks' view is on this whether my personal bank will start looking at the business (different accounts)?

 

I don't know for sure either, it's not my best area

[The GodMother]

I no this may sound nasty but you could always write to the companys that owe u money informing them that you are now going to be charging XX per day/week/month extra on top of the invoice for the time they have taken to pay you.

 

You could also threaten legal agtion may be taken if not paid within 14 days.

 

You have the rite charge extra on top of any invoice for admistration charges and waiting costs.

 

Hope this helps

 

Chrissi

[stevokenevo]

this is a tragic case, and i can totally empathise with the OP, i know exactly what your talking about and i know that physical sick feeling when it is all too much.

 

I would recommend, for personal debt advice, a trip to your local CAB

 

If your business is succesful and showing potential, it would be ridiculous to throw that away. Visit your local business gateway, for advice on dealing with slow payers, even advice on expanding your business, if you need more cash, you need to earn it.

I dont know if this would suit your personal business circumstances, but, a factoring company is an option for releasing funds tied up in unpaid invoices, business gateway should be able to help with too. It is a good way of increasing cash flow.

 

Keep your chin up and keep the faith!

[sequenci]

 

I would recommend, for personal debt advice, a trip to your local CAB

 

 

Good advice, but ONLY if you make an appointment to see a specialist Money Adviser. The lay advisers have little training.

 

To be honest you would receive just as good assistance from the likes of CCCS and NDL (Who's parent arm actually do alot of the training for the CAB money advisers)

[harvest]

Thank you to everyone for their advice and support.

 

I am currently just finishing another piece of work so that I can invoice today -s will get back to my debt woes in detail tomorrow.

 

One interesting thing I noticed:

 

In 1996 I transferred banks from Nat West to First Direct.

 

As part of my reclaim of bank charges (paid in March) I received all my notes from First Direct.

 

Looking through them, it seems I had a loan with Nat West which had £2,500 left to pay. First Direct took this on as part of my changing banks.

 

Looking at my notes, Nat West did not transfer my current account funds in time, so I incurred charges with First Direct two weeks after joining them. The record on my notes says "suggested to customer to increase their FD loan to release funds during the transfer).

 

Doesn't provide anything to help me now other than tracing back to the origins of my debt with First Direct but made me realise that I started with First Direct on a bad footing because the bank I was leaving held onto my funds.

 

I remember Nat West telling me the funds were 'in transit' and I couldn't take the money out myself I had to wait for them to appear in the new FD account.

[fairbank]

Harvest

 

I have a similar thread running alongside you.

 

I just like you have been extremely worried about the situation we both find ourselves in. Good luck to you and I hope iy all works out.

 

I think there may be some merit in supporting each other through the next few weeks. Happy for you to pm whenever you want

[harvest]

Harvest

 

I have a similar thread running alongside you.

 

I just like you have been extremely worried about the situation we both find ourselves in. Good luck to you and I hope iy all works out.

 

I think there may be some merit in supporting each other through the next few weeks. Happy for you to pm whenever you want

 

Hi fairbank

 

Yes - I've just read your thread and it seems we are in the same position in terms of timescales; working to get more contracts (mine's a consultancy company too) and the dreaded prospect of BR.

 

I was a bit worried when I got to your post about morbid thoughts - I can't say it didn't cross my mind when I realised the extent of the mess I'm in but like you, I suddenly realised that:

 

1. we have perhaps been victims of our own mismanagement of personal finances but that's not a crime just a lapse in focus over the years.
   
2. when it gets to the stage of the scale of debt that I find myself in (I realise your debt figure is similar), IVAs and DMPs just seem like tinkering at the edges.
   
3. £60k of debt to me makes it seem like I'm playing monopoly - I can't comprehend it really. I didn't go on extravagent holidays or buy luxury items - I used one debt to service but can't meet my commitments because of a drastic change in circumstances (employed to self employed).
   
4. There are many, many people all over the world (Bangladesh) who are truly suffering and they just seem to get on with picking up the pieces of their lives.
   
5. I, like you and your partner, have been trying to pay back the debts but the baks, creditors are being unreasonable.
   
6. Why think morbidly when there is every prospect - one way or another of resolving the situation?

I may well PM you from time to time for mutual support.

 

Finally, having had a brief conversation with NDL (I have a full telephone discussion booked for tomorrow afternoon) and having been flip-flopping (I think that's the phrase) between seeing a way out of this mess and bankruptcy - it seems that NDL think this may be my 'best' option given the scale of debts and my irregular income.

 

As the nice woman I spoke to said - If you're very lucky and every piece of the financial jigsaw fits into place you might be clear of your debts in 6 to 10 years but your credit record will be affected for the whole of that time anyway. If you're unlucky and BR is the final option at least you know that a tough period will be followed by a period when things start to improve for you.

 

So, chin up mate. I'm sure you'll get through this one way or another, Like I will.

 

All the best

[harvest]

If anyone reads this latest post I'd be grateful if they have any info:

 

In updating all my accounts and producing several 'scenario plans' I have started seriously looking at the administrative aspects of bankruptcy on day to day life.

 

Does anyone know about the following:

 

1. After a bankruptcy - the business I set up will in all likelihood be closed down. So I will, for a time, be unemployed.

 

2. Assuming I can get a job that is not restricted by being bankrupt - presumably the official receiver would have to work out a way of reflecting an increase in income to pay creditors?

 

3. If I took a relatively low paid job that was enough to pay for rent and basic living costs and this lasted for 12 months (assuming discharge after 12 months) - is that it?

 

4. If I then got a higher paid job would there be a new order to pay higher amounts from salary to creditors?

 

My other scenario plans are consequences of stalling creditors until business picks up to a level where I can meet debt servicing.

 

Thanks in advance for any answers to the above questions

[Slartibartfast]

The Official Receiver would need to see the bankrupt's income and expenditure and could ask for an Income Payment Agreement. This would be a percentage of your income from £100 upwards and could run for three years. If income increases so should the amount of the IPA. There is the right to challenge the IPA but it could be imposed anyway as an Income Payment Order.

With no IPA/IPO and assuming there's no funny stuff like hiding assets etc., which could end with a Baruptcy Restriction Undertaking/Order, the bankruptcy is automatically over in 12 months and could be as little as six months. This is mostly from my rickety memory but there's loads of info here:

The Insolvency Service Website

 

Your other scenario is exactally where I am at the moment.

[Goldlady]

Harvest, OH and I have been self employed for fifteen years, we have 80k of personal debt, and we are still rocking on! You haven't said who the debts are with, but as mentioned above you might find that some of them are unenforceable.

 

When the you know what hit the fan a couple of years ago OH managed to negotiate with all our creditors. He basically told them that we were going for BR and they would get nothing, however if they were prepared to freeze the interest, refund the unlawful charges on the account we would pay them a proportion of what we could afford (sent statement of affairs to them). And they ALL agreed. Instead of paying (or rather not) £2,000 a month we were then paying £250 a month. It meant they were getting something back and we could survive. And every penny we were paying was reducing the debts. Worth a try - get the CAB involved - even if they just send you their information pack it is useful to have their backing.

[fairbank]

Harvest, I have sent you a PM!

[harvest]

Thanks fairbank - I've replied to your PM

 

Thanks Sequenci, Slartibartfast and Goldlady for your posts today.

 

I've spoken to a debt counsellor and (as I knew they would) they have told me my best option is BR and that I can - to use their words "stall it for a bit" by doing a bit of ducking and diving with the creditors but it will be just a matter of (a short) amount of time before the carriage comes off the rails.

 

So - with £30 to last me until Janaury - I think I may have to borrow the fee and face the worst before Christmas.

 

I don't normally bother with Christmas so it won't be an emotional time for me (unless I'm on the street or in a homeless shelter) but as the debt advisor said to me "the earlier you face the reality the sooner the worst part will be over."

 

So thanks everyone for your support.

 

I will perhaps do some more posting nearer the time when I know exactly what's happening. At the moment I just feel depressed, tearful and sorry for myself with so much information saturating my brain.

 

I will watch the football tonight and have a couple of beers to help me sleep and face the harsh realities tomorrow.

[Goldlady]

We are all here when you need us:)

[harvest]

Thanks Goldlady - I really appreciate that. But... four things have happened this evening that make me think the future is bleak

 

1. England lost - nothing to look forward to next summer
   
2. I didn't win the lottery (again)
   
3. I spoke to a long time friend of mine who frankly couldn't believe I'd gotten myself into this situation without speaking to people beforehand.
   
4. My last bit of work through the company has been critisised by the client to the point they may not pay my invoice.

Rationally, I can understand numer 4 above. My mind has been on other things.

 

I just fell like putting on some coldplay, radiohead and taking a final bath and slitting my wrists.

 

I won't because I'm the ultimate coward but my god it would be the stressless

[make them aktiv runners]

I just fell like putting on some coldplay, radiohead and taking a final bath and slitting my wrists.

 

I won't because I'm the ultimate coward but my god it would be the stressless

 

Hey time for a reality check:

1) Debts are 60K

2) Previous job 46K

3) Likely business income 50-60K less 3K costs

 

Although 60K seems a high figure, in reality it is not much more than a years pay. Many people have debts of a much higher proportion.

 

If you are used to doing that type of involved work then no job on minimum wage is going to suit you brainwise. You can work through this and make your company successful. All you really need is for your creditors to drop the future interest/charges until you are back to full strength at least.

 

Just think of it as a temporary dark corner - it will improve if you let it.

[Under Siege]

aktiv is right

 

I have been there, it does get better I promise.

[harvest]

Thanks 'make them activ runners' and 'under seige' and to everyone who has PM'd me. I'm very grateful for the support.

[PriorityOne]

 

I set up my own consultancy business last October and although it has brought in about £17k my monthly debt servicing has meant a balancing act - spiining plates and they're all starting to crash around me.

 

If you want to try and save your business, then you will need to separate your business debts from your personal debts (in your mind). If none of these debts are secured, then personal debts such as credit cards, loans, etc. can take a back seat while you focus upon saving your business.

 

I don't have a regular income (delays in invoices being paid by clients) so can't go down the DMP or IVA route.

 

You don't need to... you can do everything yourself. Do you have any income at all right now ? You can write to all creditors offering token payments of as little as £1 a month, if that's all that you can genuinely afford. No court will award higher repayments if you can't meet these.... but they will be able to see a commitment to repay should it get that far. If/when you get threatened with court action, slap the creditor with a CCA request immediately (if you have not already done so).

 

For the first time ever, I missed one payment on a loan this month and was served with a default notice. Now I have loans and credit card minimum payments due (£2600 this month and next) and not a bean to my name until I get some money paid in January (about £3k in income).

 

Time to stop worrying about these.... if you write (rec. delivery), enclosing a PO for between say, £1 - £10 and commit to making regular payments on the basis of frozen interest.... until such times as your situation improves they will have little choice but to accept. DO NOT SPEAK TO THEM ON THE 'PHONE THOUGH ! Everything must be in writing. If you need help drafting up a suitable letter, please let me know.... I am about to do one of my own to Barclayshark.

 

I am so angry with myself. I have one more payment on a car loan that has taken me 5 years to pay and here I am not even able to own it in the end. I need it for my job - it's ten years old has 137k on the clock and I'm stuffed.

 

Use the money that you would have used to pay the above credit cards (if available) and clear this one. If not, is there anyone who can help you with this last payment ?.... how much are you talking about ?

 

I have read extensively on BR and am terrified of the whole thinjg. But I think I have to bite the bullet.

 

Not necessarily...

 

I can see how things have gone so pearshaped - I was earning £46k a year last October and have had only £11k in income in the last 12 months.

 

The irony is that I have lots of contracts for January onwards so the business is doing fine - it's just my debts that I idiotically built up over many years that's the problem.

 

You can get through this.... January is just 8/9 weeks away.

 

What a life.

 

Who is currently chasing you ?

By 'phone or by letter ?

Business or personal ?

Any CCJ's so far ?

Age of the accounts ?

Amount outstanding on each ?

 

[gemspan]

Hi Harvest

 

I completely agree with Priorityone here!!! You are obviously depressed about this situaiton you find yoursef in and I can fully understand that. However, that is not going to help you. You need to start being proactive and a bit more positive. First port of call I think is to go to the doctor and see if you can get some help to get you feeling a bit more positive about yourself. You are the important person here. If you are not feeling right then that will affect your ability to work and hence your income.

 

60k is not much when you have the potential of earning that in a year is it? You are just going through a bad patch - it happens to us all!!! All your debts are unsecured so its not as if you have the accommodation of your wife and children to consider. That is a positive thing, is it not?

 

Once you have recognised that it is possibly depression that is making you feel the way you are feeling then you are well on the way to recovery. You have gone through a lot of major life changes in the last 9 months and not all have been for the better. Is it any wonder that you are feeling this way? NO!!!!!!

 

Break things down into small chunks. Firstly, if you have one more payment to pay on your car they cannot take the car without first getting a court order. That will take a few months to get so by that time you will have the money to pay the payment. So that's one thing you dont have to worry about!!!

 

Secondly, CCA ALL YOUR CREDITORS. If they dont have a credit agreement they cannot enforce the agreement in court. You will be surprised how many banks, etc., dont keep their paperwork in order.

 

Thirdly, concentrate on your business. That is your future. If the busness has made a profit, albeit a small one, in the first year, you stand a good chance of being successful. This wont happen unless your attitude towards yourself changes. Recognising you are depressed is the first step forward to doing this.

 

Once you feel you are doing something positive then you will find it just flows from there. How do I know? Because I was in exactly the same position as you this time last year. I sold my business, sold my house, got a job that I am way over-quaified to do. Now I live in a rented house which I love and have made a huge dent in my outgoings. I was diagnosed as having depression and got medication. 2 weeks after I started on the medication things didnt seem so bad. I wasnt running around the streets laughing and joking but I felt a lot more able to cope.

 

Please, please take control again. You dont have to go bankrupt. You just have to start being more proactive.

 

I hope this helps. I am living proof that things do get better. Bankruptcy is not the easy way out. Taking control and dealing with things yourself will make you feel so much more empowered!!!

 

Good luck

Gemspan

[harvest]

Thank you to Priority1 and gemspan in particular.

 

I spent the last week re-doing the work for the client so that they will pay me - likely to pay me in January now.

 

One of my friends has kindly lent me £500 long term so that I can pay my rent in December and have £70 for food etc.

 

I have a meeting tomorrow about a contract for £17k so if it works I might be able to scrape out of my situation. If not I will still try and hang on until I have no other option but bankruptcy.

 

When I'm back tomorrow evening I will begin sending the CCA requests and the offer of £1 per month payment to all creditors.

 

This may give me a bit of breathing space until after Christmas.

 

Thank you again to everyone who has provided advice. While I haven't felt particularly 'cheerful' this week I have at least resigned myself to worrying about the things I can control (CCAs etc) and trying not to worry about the things I can't 'creditors reactions' etc.

 

So thanks again for the advice on this thread and the PMs I've received.

[PriorityOne]

Make sure you give us an update Harvest.... We'll get you through this.

 

[gemspan]

Hi Harvest

 

I am so glad to hear you are feeling a bit more positive. We will help you to get through this. It really isnt the end of the world. At the end of the day it is debt and it is debt that can be easily sorted if you put your mind to your business. I wish you the very best of luck.

 

Did you manage to go to your doctor? If not, I still suggest that you do go. It was kind of your friend to lend you money. I really found out who my true friends were when I was in your position. I have discovered that 3 of my creditors didnt have credit agreements and HSBC have made a huge error in their paperwork for a managed loan they hoodwinked me into taking so I am currently disputing this too.

 

I just got my first pay check yesterday for my first month in the new job. It was a great feeling to be able to pay things and know that this is coming in every month. I am well over-qualified for what I am doing now but it works around my dogs (who have kept me sane over the last few years!) and that makes me happy.

 

Please, please keep us up to date with what is going on. The very best of luck to you. hope your next post is even more positive.

 

Kind regards

Gemspan

[fairbank]

Harvest and I PM each other and it is a great source of help to me

 

This is a man who has recognised that he has a problem and has dealt with it

 

Good man and keep in touch mate

[harvest]

Thanks Fairbank

 

Bit of un update and a question below:

 

Question:

I just logged onto internet banking - my account is with First Direct. I wanted to cancel all direct debits and standing orders so I don't get an immediate £25 charge each time. While I can view my statements when I click on Manage Money (the link to allow you to view and cancel DDs and SOs) it immediately asks me to log in again. I retried four times and the same thing happened. Can they do this?

 

Latest:

 

1. Ref above: I now have 4 x £25 charges simply stating DD/SO referral each time.
   
2. Tha bank has allowed charges and some payments to go through putting my overdraft £499 above its limit. So presumably they'll now charge me interst and charges for that as well?
   
3. No letters, emails, phonecalls or anything from the bank about this.
   
4. On a positive note - I secured another consultancy contract yesterday for approx £2100 to be delivered before the end of the year.
   
5. I had agreement that I could invoice for the travel to the client x 3 journeys and for phonecalls and time (probably about £300 in total)
   
6. They have offered me a 12 month consultancy contract from January for approx £1000 per month for 3 days a month)

I'm currently finishing off CCA request for all creditors which will be posted recorded delivery on Monday.

 

So - thanks again for all your help everyone. I'm definitely looking to stave off BR if I possibly can now.

 

Thanks