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Fallen behind on loan and credit cards. Fearing bankruptcy. What can I do?

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Hi. I am new here and hoping for some help.


I have around £40k in debt on a loan and 6 credit cards.

I defaulted on the loan in March and have defaulted on 4 cards in the last 3 months and am about to default on the remaining 2. This is pretty much a result of the lockdowns.


I am self employed with a small business and was unable to access govt financial support during the lockdowns and thus lived off credit cards. The whole thing clearly went on too long and though my business is slowly bouncing back, and expect a significant uptick in autumn, I just don't see how I can get from here to there.


The repayments are around £1200 PCM and I am barely scratching the surface of the initial debt.


I need to buy time to see if I the anticipated improvements in income arrive in the autumn and winter.


Clearly, I need to negotiate and contact my creditors but do not know what the best process is.


I have spoken with Business Debt Line for advice so far.


I understand that I can seek a 30 day stay by sending each a "Hold Action" letter which will buy me 30 days.


Following this, I can ask for "Breathing Space Scheme" which will freeze action and interest charges for 60 days, though with a review after 30 days.


In theory, this will get me to October when I should start seeing an increased income but still unlikely to be able to keep up with the £1200.


I desperately wish to avoid going bankrupt. I have no assets so there is nothing to seize from me. In fact, I have been homeless and staying with a friend for more than 18 months, he has been a real life=saver. Other than my business, which I have been told I can transfer the directorship to a trusted friend, become an employee of that business, be sure not to "shadow direct" the company and could reclaim the business a year later (if and when) I am discharged from any bankruptcy. Is this correct?


I also suffer considerable restrictions with well documented and long term back pain, which restricts my ability to work long hours in one go (though I do work long hours, just with regular breaks that would not be possible in a regular 9 to 5 type job).


The debt and the stress is making the pain so much worse. It's a vicious circle. Can't work so much because of crippling back plan, less work means less income, means worse debt stress etc etc


My bottom line question is. What choices do I have? What steps can I take to buy some time but engage openly with my creditors?


Any and all advice gratefully received







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Is the business set up as a Limited Liability company registered at Companies House? With you as the sole director?


If so, is the loan to the company or to you personally?


And the six credit cards? Any of them in the company name or all in yours personally?



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Hi. Thanks for the reply. The company is Ltd at and registered at Companies House. It has a small debt to a personal friend who loaned some to keep afloat during lockdown and is entirely patient as to when repayments come. All the described debts are personal debts in my name.

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