It's hit the fan

[Guest 4cansastella]

Lurked here for a while,now could do with some advice,

 

Self employed since october 2009 and managed to keep my head above water,

I work in utilities and own (HP) a grab lorry,

the big lorry that picks up the muck when new gas/water mains are replaced.

 

My situation is that due to slow and non payment of cash i am struggling to pay my debts.

As I type I have £ 500 available of £4000 overdraft,

I am owed £8000 for work done but the contractor has not been paid so i do realise it's the knock effect.

 

MBNA & BARCLAY have increased interest payments significantly(MBNA 34.9% ON 8k).

I have about 35k credit card debt most were applied for on line and have PPI

,£ 550 car payment PM 30 months to go,(I accept i will have to return to MB finance)

Partners car £160 and

my van £160 plus the insurances .

My lorry cost's are £1600 PM,

I owe £3k vat form July and as of this month another £3k,

There is no equity in my house,it cost's £1500 per week to run my lorry i have had enough, juggling DD's and SO's.

 

I am 52 and in a strange sort of way i know it's all over

,i am a zombie creditor,

No misses on my credit file every thing up to date,

I caused this and it is not a cry for help

i can no longer service my debt

,i am not running away from it,

Ineed to make it more manageable.

[rennuz]

Its likely something is going to have to give pretty soon. Firstly I would get yourself a bank account that is in any way affiliated with any of your current creditors, unless you already have one. Your unsecured debt is what you are going to have to knock on the head to start with. MBNA are pretty good at accepting offers and will also reduce interest pretty quickly if you write them a letter, or use the likes of CCCS, as long as you pay £1 a month to all of these people then you are likely to stop them constantly ringing you. All of this is something to give you a bit of breathing space. Barclays are not so nice and it will likely go to a default pretty quickly, in my experience they were quite aggressive, thats why they are the only ones I havent actually paid off myself.

 

The cars are something you might want to replace by keeping any payments you might be making to them and using that amount to buy yourself something at an auction. This may not be great advice as it may be repossessed at any time but, speaking from experience you usually get about 3 mths of grace, then a knock on the door will happen. Of course you can give the cars back straight away but I presume they will need replacing so this will be a tricky one.

 

Then you really need to work out your business, is it going to work and can it be sustainable, if not then you might have to do something else, easy for me to say but you will have to be sensible here and see whether its going to succeed in the future if not then cut your losses sooner rather than later but what do you do?

 

I can give advice on what I did in my situation and its really worked for me, had lots of unsecured debt and wiped virtually all of it by paying lower payments and then making an offer of between 10% and 20% of what I owed, still pay Barclays £1 per month though, never forgave them for giving me the default. Of course it comes at a cost, 2 defaults and some stress with phone calls etc and it may not work for everyone.

Good luck.

[cerberusalert]

As you are self employed you should never have been sold PPI. You are entitled to it all back along with statutory interest at 8% + any unfir charges they may have added for late payments etc.

[Guest 4cansastella]

rennuz thanks for the quick reply, i suppose i am putting off the inevetable, i am trying to convince myself i can save my credit rating/file,how soon do the defaults start to show.

[cerberusalert]

how soon do the defaults start to show.

There is no fixed time-frame although the ICO suggest within six months some creditors take longer.

[rebel11]

Hi 4 can

 

As cerberusalert has suggested claimback any Mis-sold PPI, you can claim this back over 6 years plus with interest. Also claim back any Penalty Charges on your Credit Cards with interest. Theres quite a lot you can do. Spreadsheets are available in the library. Heres the one for Credit Card charges:-

 

http://www.shweb.pwp.blueyonder.co.uk/interestcalcs.xls

 

Have a read of 1,2 and 3.

[The abused]

Hi 4cansastella

I would not be too bothered about trying to maintain ur credit rating as banks aint lending anyway. I recently tried to open a current account with HSBC basically to put money in only. I was told i had too much unsecured debt this is despite me wanting to put over £90,000 into the account. So you need look after number 1 ie yourself. I would if I were you plead financial hardship and offer token payment of £1 a month to creditors. Let them know that you intend to pay more when ur financial position improves.

 

U must address the issue non payment of VAT, I was in a similar situation to you a while ago. After being late for about 6 months for non payment of VAT I had to pay my VAT plus fines to a company called IQor. 7 days to pay or bailiifs. They can come in seize ur goods and take you to court for the rest. I suggest you contact HMR&C on this issue. if its the first time you have been late with payment then you will recieve a letter from them pretty soon I think.

This will not be an immediate demand if its first breach of non payment. That will come later if you ignore it. Please sort this issue before worrying about finance hp or credit card.

 

Ur Credit cards: you need the PPI back plus compounding interest. So request CCA and SAR. Barclays Bank I have been with for 30 years and they are out to squeeze as much out of anyone as they possibly can. Try an open ann account elsewhere but I think you may experience difficulty. I am similar age to yourself and used to believe its right to pay what we owe and try and protect our credit rating. I have paid over 42000 over past 3 and a half years paying off loans.

I realise now I would have been far better off pleading financial hardship offering a few pounds a month and getting interest frozen. At the end of the day the money is better off in your pocket than a creditors who stuffs you with high interest rates, You must look after yourself as the creditors will not.

 

Yes like yourself I am self employed with own company. Have u been trading long enough to apply for a business loan or even an overdraft facility? maybe worth a try.

[Guest 4cansastella]

Hi T a

 

Thanks for the advice,the vat situation does really worry me, sleepless nights to be honest,however when i get a cheque and pay into the bank it will cover my overdraft and, we are now nearing the end of the month and i have to pay my lorry payment, insuarnce and professional fee's as well as having to have working capital for fuel, tipping costs and any repairs i may need.I have PPI on all my cards but applied online for most and have read it's very difficult to reclaim because it was online application.I think the hardship line you suggest could be for me,i have to do something sooner rather than later best start looking for the template letters.

[cerberusalert]

It doesn't matter whether you applied on-line or not, you did not fulfill the criteria for PPI as you were self-employed so it should never have been processed.

[rebel11]

Hi 4can

 

http://www.financial-ombudsman.org.uk/publications/factsheets/payment-protection-insurance.pdf

Payment protection insurance: consumer questionnaire

 

Regarding Hardship:-

http://www.itv.com/daybreak/money/martinlewissection/bankcharges/

[Guest 4cansastella]

Thanks for the input, can i just clarify ,credit cards were obtained 8 or 9 years ago while i was employed, been self employed since october 2009 can i still claim and if so on what basis.

[The abused]

4 cans

yes look through and fine relevant templates, this site is a great source of help.

 

With regards to ur VAT, you need sort this asap. Contact HMR&C and tell them of ur cash flow predicament and ask what they think is best for u to do. ask if you can pay in installments and ask for as much time as you can. At this stage if you have not been late with VAT before they will from experience help you. They are human and do understand the problems businesses are having. The worst they can say is they want paying now as is overdue and even then you will have a little grace as they will then go through IQor their debt collector. When that happens you will have 7 days they will then send a bailiff and if that aint enough take you to court for any shortfall and yes they really will bugger your credit rating. But me thinks they will help you. but believe me if you ignore them you will up to ur neck in it. If you have an accountant you can ask them to do it on your behalf. You may think I am going on a bit but I cannot stress the importance of this.

 

On the bright side I think you will get through ok, ie ur cash flow. you will end up wiser and feel a lot better. I wish you well in ur business which I know in the present financial climate is difficult. Companies dont wanna pay up till the last moment. Its cashflow and everyone is suffering

[cerberusalert]

You can still reclaim even if you were employed.

 

Have a read through the PPI forum http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?111-Payment-Protection-Insurance-(PPI)

[rennuz]

With regards to time frame, you are looking at a few months, 6 or so with regards to the defaults. But I had 6 diff creditors and only Barclays gave me defaults. It's all unsecured so don't be paying more than the £1 per month. Sort your VAT issue out first and be clever about what you can afford to live without and what will hit you and when. Write everything down and formulate a plan for who gets paid and when.

 

I remember taking a good few weeks just concentrating on this and doing a plan and dealing with it, saved thousands of pounds so really good time well spent. I am also self employed.

 

Again good luck.

[Guest 4cansastella]

Quick update,I have spoken to HMRC re vat and have agreed to repay by April.It's the first step,hardship letters next.

 

Thanks for the advice.

[brokebutnotbeatn]

Excellent. The only way to tackle this is to break it down into small (achievable) steps. Even with the hardship letters don't aim to send them all out in one hit. Great if you do as you'll be ahead of you plan but don't set yourself targets you might stuggle to meet. Make sure you have separate files for everything and that you get proof of postage (free over the post office counter) for any letters sent. Good luck!