Feeling Sick about £60K of Debts!

[harvest]

I have just realised that I cannot continue in my current circumstances with £60k of unsecured debts.

 

I am considering bankruptcy but apart from the obvious consequences there are complications of going down this route.

 

I feel physically sick and have done for weeks now.

 

As with a lot of other people my circumstances changed in September last year when I left my job (after 17 years of working for them). Long story but I had four new bosses that I reported to and ended up working all night most nights with no sleep and couldn't cope.

 

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.

 

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

 

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).

 

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.

 

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

 

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.

 

What a life.

[sequenci]

Your consultancy, is it a ltd company? You wouldn't be able to remain a director if you were to go bankrupt. From the info you've given bankruptcy *could* be a valid option and it seems you've done some homework investigating the pros/cons etc.

 

Have you spoken to one of the debt-help charities such as National Debtline?

[harvest]

Thanks for your reply sequenci

 

Yes it's a Limited Company so I think it means the company will have to close.

 

I have just provided all of the company accounts to the accountant for the end of year accounts.

 

I don't know whether at this stage to speak to the accountant about my personal situation or wait until he's produced the accounts, signed them off, sent them to companies house and then formally close the company so at least it's not involved if I go bankrupt -

 

I will have to start applying for jobs now like crazy. In the meantime I'm just finishing off a piece of work for a client and then I can invoice for about £4k which will be paid 46 days later.

 

The company was set up last October but the first contract wasn't until April this year so I was paying all of the set up costs and day to day running costs and living off credit with no other money coming in.

 

It's a real shame because it looks like the company would bring in about £50k to £60k a year with monthly running costs of approx £500 so I would have been able to earn a reasonable salary in the next 12 months.

 

I suppose the best I can say is that I tried and failed.

 

Finding a job in the run up to Christmas will not be easy.

 

Any advice on what I should do would be more than welcome.

 

I have filled out a form for the NDL and will be speaking to them tomorrow.

 

Thanks for your reply Sequenci

[reduk054]

Oh Harvest, I really can empathise with you! All you have tried to do is to make a reasonable living for yourself and it has ended up with you bearing the brunt of it all!

Do you own or jointly own your house? Bankruptcy is a big step (that my OH is still going through), and I can understand your concerns about repaying all of the debts.

You have done the correct thing by following secquenci's initial advice of contacting NDL, they are superb!

Sorry if you put about your accomodation in first post, and I missed it, trying to make dinner as well as on here (no excuse though really!!)

Red

[harvest]

Thanks red - much appreciated.

 

I don't own any property or other assets other than the car.

 

I try to be positive about things - for example I now realsie I'll be helping the environment when they take my car away. I look at Northern Rock's £24 billion of borrowing and realise it's not just individuals - although I'm sure the executives who have resigned will walk away with nice financial packages.

 

I'm annoyed with myself for being so stupid and not keeping control of my debts over the years.

 

My biggest worry is this:

 

In October last year I moved back to my step dad's house (council rented house) as a stop gap. In June time I moved into a friends house in a different part of the country - supposedly temporarily (living with my step dad at my age was becoming unbearable - he's an alcoholic and I couldn't get any work done trying to get the company going).

 

However, as my move was intended to be temporary I didn't change my address on anything so all the creditor's (bank, cc companies) have my step father's address.

 

I have explained my situation to my friend and while she is understanding - her first priority is that I pay my rent to her. She has categorically stated that if I go bankrupt it must be at my step father's house and not her house (even though we have no financial relationship).

 

You can see my dilemma - I will have to explain everything to my step dad who may not let me back anyway and will be stuck there if he does (can't rent anywhere after BR because of credit checks) - I will therefore be homeless as soon as I petition for BR.

 

I am sick with worry.

 

I left my job because (I laugh at this now and can't believe I let it happen) I was being 'bullied' by two of my bosses. I left it nine months but couldn't cope with it anymore - hence wanting to start up on my own. They were subsequently demoted (after I left) so it was no help to me.

 

But thanks for your support red and sequenci - I hope your situations are now improving / better.

[sequenci]

Hello again.

 

Also give National Debtline's sister firm a ring on 0800 197 6026 (business debtline)

[harvest]

Thanks sequenci - will do

[reduk054]

Harvest I hope that you have had a few more questions answered with the advice numbers which sequenci has given you.

You have quite a few separate issues regarding the business debt and your personal circumstances, and you need each point addressing for your own peace of mind!

Please keep us updated!

I will continue to sub to this thread, to see how you are getting on!

Red

[MikeSplicer]

I left my job because (I laugh at this now and can't believe I let it happen) I was being 'bullied' by two of my bosses. I left it nine months but couldn't cope with it anymore - hence wanting to start up on my own. They were subsequently demoted (after I left) so it was no help to me.

 

 

Harvest

 

Have you considered a claim for constructive dismissal?

 

I am no expert but its basically when you have been forced out of your job because you felt you had no other choice. Its not the managers that's at fault its the company because they gave them a position of authority.

 

Get some free legal advice you may be entitled to some compensation.

 

Check out the Government portal on this subject...

 

Constructive dismissal : Directgov - Employment

 

Good Luck whatever decision you make.

 

Mike

[harvest]

Thanks red and sequenci

 

The business doesn't have any debts - it made a very small profit at the end of its first year (very small £36) - it has only one ongoing cost now - monthly rental for a virtual office at £130 which will be covered from the next tranche of funds going in in January.

 

Then I'll have to close the business - send the final accounts and cease trading. I can take out my final salry to pay my rent and the BR fee (£465 I understand)

 

Then I'll be jobless and quite possibly homeless - that's why I'm tryhing to wait until after Christmas if I can - I can't face living on the streets until then.

 

I do appreciate all the support on CAG - it's remarkable how many people are in / have been in the same or similar positions.

 

I hope I will see light at the end of the tunnel - that's why I think going down the BR route in January would at least mean that this time next year I would be seeing light at the end of the tunnel if it's a 12 month period.

 

I don't think I've ever felt so low or ashamed - it's frightening that at the age of 41 I will have to start again. There's no way I can pay £60k of personal unsecured debts so I have no choice (even though I keep deluding myself that 'something will turn up'

 

My only abiding hope is that I have reached the bottom now and can only go in one direction - I just hope the bottom isn't a hollow floor with further to drop.

[harvest]

Harvest

 

Have you considered a claim for constructive dismissal?

 

I am no expert but its basically when you have been forced out of your job because you felt you had no other choice. Its not the managers that's at fault its the company because they gave them a position of authority.

 

Get some free legal advice you may be entitled to some compensation.

 

Check out the Government portal on this subject...

 

Constructive dismissal : Directgov - Employment

 

Good Luck whatever decision you make.

 

Mike

 

 

Thank Mike - I do appreciate this and have considered this. I first complained back in Dec 2005 and it was all 'hushed up' and I was offered a mutually satisfactory deal to leave but I declined this - worked on for 6 months (in horrible circumstances), submitted my notice and worked 3 months notice period.

 

I know I should have done something about it at the time or after I left nine months later. I think it's too late now. In any case, one of my current clients is the same company so they could argue I wasn't that resentful if I ended up working for them as a consultant.

 

It just annoys me that I worked there for 17 years, continuously promoted and on the day I left (because the managers at fault had told everyone not to bother) I didn't even receive one good luck card. I was told this by work colleagues who went for a farewell drink with me.

 

Oh well - what's done is done I guess - but thanks Mike - much appreciated

[harvest]

Does anyone know what the timescales are for bankruptcy petitions?

 

For example, if I get all the forms ready and get the fee together is there a waiting list?

 

Time may not be on my side but I'm hoping that even though I can't pay any of my loans and credit card companies debts until January that I should wait until I receive money for work through the company and then use this to pay essentials and the court fee for BR petition in January?

 

Is this sensible or stupid?

[Slartibartfast]

Does anyone know what the timescales are for bankruptcy petitions?

 

Depends on your location. Some courts are practically walk through but I had to wait two months for my hearing ( bottled out in the end). My situation was cmpicated too. Limited company balancing books but my personal debt mounting all the time.

[harvest]

Thanks slartibartfast

 

How did you return from the brink - that close to BR I mean?

[Slartibartfast]

How did you return from the brink - that close to BR I mean?

 

Been on a few brinks this one was a matter of realising that I did not really have anything to lose. The only thing of value I had/have are tools for work. Bankruptcy could have been a very easy option but I took the long way round, needing to do something while trying to gt back to work after long illness. Bit perverse I know but that's the short answer. I don't earn anything ATM so can't pay anything and just taking everythibng one step at a time with the BR always the unlocked door.

Owning a house ( I rent ) is a bit different but I'm sure you'll get loads of considered advice about all sorts to help.

[Under Siege]

Harvest,

 

your situation seems identical to mine -

 

60k debts, made redundant from very well paid job, now trying to build a business.

 

I thought about bankruptcy but I know that my business is looking fairly healthy and Ill be damned if im going to give it all up.

 

So I have CCA'd all of my creditors and not counting my chickens yet but approx £8k of the debt could be wiped off because 2 of my creditors have all but admitted that they do not have the agreements.

 

trying to negotiate a DMP with other creditors, although they are been very stubborn, but I will keep chipping away at it.

 

it will be a hard slog but try and stick with it, If you feel in your heart that your business will be a success, then why give up on it?

 

personally i have made a commitment to work "every hour god sends" because I KNOW that I will get my self out of this mess.

 

Good luck and best wishes and remember you are not the only person in this mess, there are thousands of us up and down the country.

[harvest]

Thanks UnderSeige

 

A couple of months ago I was of the same spirit - why give up on a business when it has the potential to give me a very good income and therefore the potential to pay back a lot of the debts much earlier.

 

I am going to look at trying to delay it as long as possible but truthfully I am starting to be sick (physically) with worry, every day which is affecting my abaility to deliver current work and do marketing for new contracts. I just don't have regular monthly income and I don't want to borrow against potential earnings in case:

 

- clients don't pay up on time

- Creditors start turning the screws to the point where I really become unwell and harrassed.

 

I do feel a moral obligation to pay my debts because I incurred them. On the other hand, I have never had a period of unemployment since I was 16 (even through college and university) and I feel worn out. At this rate I could still be in debt by retirement and have no assets or pension for retirement (24 years away!)

 

I admire your determination and I still have determination but the prospect of doing a job from 9-5, even a low paid job where I can switch off and not worry about debt every day or where the next money for food or rent is coming from, does seem positively attractive.

 

Thank you for your encouragement though - much appreciated

[Under Siege]

I admit, that the thought of a stress free 9 to 5 job does appeal to me sometimes!

 

I was like yourself, I was suffering stress so much I ended up in hospital having all sorts of tests!

 

I dont mean this to sound cheesy but I practically eliminated the worry by reading philosophy!!

I am going to start another thread one day listing all different methods to try and get rid of the stress because I am sure lots of posters on this site suffer the same as you and I.

[harvest]

Philosophy sounds appealing but I don't think I could concentrate on reading at the moment.

 

'tis a shame the government can't come to our rescue like they did with Northern Rock...would upset the tax payers I guess.

 

I'm awaiting the report from the accountants from the huge amount of (very organised) paperwork I sent them last week to see how much tax I owe on top of everything else.

 

I couldn't believe how much paperwork was involved.

 

It's a bit of an irony that - apart from working long hours and the debt worries which have got to me in the last few weeks - I've been less stressed than I ever was in my old job.

 

I hope you succeed in your business - you sound very determined.

[The GodMother]

Have you spoken to the local council about housing.

 

I know my council are rehousing ppl after going bankrupt it maybe in a b&b for a while but they eventually get a flat or house circs dependant.

 

They should be able to help you with summing so you dont have to be homeless. Also you may be able to apply for benefits so u have sum type of income after goin BR.

 

Chrissi

[harvest]

Thanks Chrissi

 

I will be speaking to several people this week.

 

I'm going to go down the CCA request route first to delay things for a bit - seems to be the advice on the CAG site - first of all I want to check the current creditor's figures against my own figures.

 

I will speak to my step dad and the friend who's house I'm in at the moment. Technically if I petition for BR at the address where all my correspondence goes my friend need not worry about her credit record / house being affected and I can apply for jobs there to pay rent / live after BR.

 

I really appreciate your advice though - obviously housing will be at the top of my list before I go formally down the BR route.

[The GodMother]

yw harvest.

 

I am glad i can help.

 

If you are going to do the bankruptcy you will need to ask your jobcentre how long it is taking for claims to be processed as i no some areas are experiancing difficutly up to 3 mths

 

Chrissi

[saqqara]

I went through all this a while back myself and the tendency is when you are in the middle of it all to feel completely isolated and all you want to do is curl up in a ball and wait for it all to end.

 

I too toyed with the bankruptcy route and a host of other options that we don't need to go into; and throughout this whole miserable period of my life I didn't know about this site, so I was therefore the only person in the world who was going through this agony.

 

I've still got a bit more of this to come, but a few pointers looking back that may help. If anybody wants to correct me any of my points then feel free...

 

1 - DON'T GIVE UP!!

 

2 - If you go bankrupt, you cannot be a director of a limited company... but somebody else could be. Friends? Family? Then you can still work for the company with somebody else as director. If the business really is looking good, then talk to people about it - but be realistic. If the business is going to go belly up then learn when to stop.

 

3 - If the Ltd company has debts, don't pay them off personally (unless you've personally guaranteed the business debts)

 

4 - Renting, you can also do through the papers. Not everybody credit checks and some people are quite sympathetic - especially those people who have been or know people who have gone through this

 

5 - Do you have to continue working in this country? Perhaps this is an opportunity to work abroad for a while and get away from it all

 

6 - Read the forum and take note of the anti-harassment advice. I wish I had known about it. If you need a number so that friends and customers can call you then get a pay as you go mobile and be careful who you give the number to. If the DRA's get hold of the number, get another sim and change your number.

 

7 - Get on top of things in your own time. Allocate a time or a day to worry about your debts and DRA's, writing letters etc. and spend the rest of the time working on your business, and your life. If you allocate Saturdays to do all this stuff, then you can work 5 days a week without worry and relax on sunday.

 

8 - If you have creditors who pay you late - don't do the work for them. Tell them that 46 days is too long to wait. The goods and work remains your own until they have paid for it - remind them of that

 

9 - Don't be scared of the courts. Yes there are some real muppets in the court system some of whom can be so aggressive that you would think they were being bankrolled (excuse the pun) - but what is the worst they can do? I suspect the worst they can do is bankruptcy and/or bailiffs. Well, you're already considering bankruptcy and read around the forum on the limits imposed on bailiffs.

 

10 - As for address, if your father and friends don't want you staying with them then tell the courts/dra's you are homeless. This sounds cruel, cos my extended family got pestered by DRA's looking for me, but tell them about harassment but don't let the DRA's know they can get to you through family cos they'll keep on doing it. Let them tell the DRA's you're not there and you go and find somewhere else. I moved into one place once where the DRA's were calling for somebody else and wouldn't believe I wasn't him - so I started playing with them - I told one that the person they wanted was dead, told another that we had chopped him up and buried him, and told another to leave the ransom in the place agreed and we would release him unharmed. After that the calls stopped.

 

11 - most importantly. DON'T GIVE UP!! Don't be embarassed by it, deal with it in whatever way you feel is best, but also allocate time to live and to rebuild. The world has not ended. This may be an opportunity to start again!!!

 

Hope this helps, I know what you're going through

[harvest]

Thank you Saqqara

 

Really good advice all round. It's comforting to know that so many people have been through these problems and emerged on the other side - however they resolved it.

 

I know you're right -

 

Having thought everything over last night (couldn't sleep until 6am today) I'm going to see if I can resolve this without going bankrupt.

 

I am going to take some advice from the accountants about the business - which has orders for work for the next 4 months and see whether I should resign as a director now and hand it over to friends or relatives.

 

I'm updating all my spreadsheets on personal debts to see exactly what the position is (I updated it a week or so ago).

 

So Saqqara - thank you so much for your help and advice - I really do appreciate how supportive people are on the CAG site. Thank you again.

[sequenci]

Harvest. Have you contacted Business Debtline?

 

They are on 0800 197 6026 and are VERY good at what they do, the advice is totally free too. I know most of them personally lol.