really stressed and dont know what to do now

[kellym]

Hi there, what a fantastic site. I will start with basics.
Me and hubby owe
hubby
£19,000 Barclays bank (was £25k loan had for 2 out of 10 years)
£7,000 Halifax visa
£1000 overdraf Barclays.
Me
£18000 Direct line (wss £25k 2 out of 7 years paid)
£16000 Barclays (was £17500 paid 1 of 10 years)
£1300 Barclays overdraft.
£500 catalogue
Joint
Inland revenue £2000 Accountant £500 Family £1000
We have a property valued at £145k with £90k mortgage to direct line £566pm so £50-55k equity.
We are self employed all debts are personal but were for business not shopping however I guess that is irrelevant now.

Our business is doing no trade and we are in the process of getting employed work and closing shop and we should earn about £13k each not great hope its more.

We hope to enter an IVA maybe by remortgage 1 off payment if we can rais that mortgage on our earnings however we dont know how we can make rent payments on the business untill we get someone to take over lease (we have had it for sale for 5 months now would be happy to just give it away) the lease has 5 years remaining and is £7400pa £620pm.

We are really stressed and dont know what to do now and feel we have done everything right by trying to sell the business. If we entered an IVA then a judge say we have to pay rent this could make us bankrupt. Please help any advice welcome.

[Adam Davies]

Hi
If you are unable to sell/pass on the lease then the remaining lease will form part of your personal debt[37k plus the debts listed of 67k].You will find with personal loans that the amount owed in default will be much higher than you state.Do you know what disposible income figure you will have if you both do get jobs for 13k each ?
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[kellym]

Hi thanks for response, I am very confused as I was told by an IP I could not count anything linked to business including rent I admit I assumed it would form part of our debt[:(]

I guess they must add on solicitor fees etc to personal loans if you become insolvent is that what you mean about debt being higher??

We would have about £350-400pm disposable income did put £500 first but that not relistic for a very long time in an IVA.

Oh no that would mean £104k in debt ...we can never clear that maybe BR is our only option what a mess we have got into, we wanted to make a start for our future with our own shop and a supermarket opened round the corner[:(!]we are now in debt and facing the guilt.

Thanks for any help and advice. To anyone reading this post good luck in the future and hope everything works out well.

[ray_a]

Before you rush off can I ask a quick question please|?

If the shop was a partnership or on sole trade terms then it might be possible for an arragement to work as IVA's can be flexible. There is no difference between personal and trade debt when it comes to an area like this.

Basically I had a similar problem. Just chose the wrong supervisor.

I suggest you wait for Melanie who is very clued up and can advise you.

It is worthwhile shopping around for a good IP. After all learn from my experience having a supervisor is like a marriage! You need to be careful because you have to relate to that person for the next 5 years!

[kellym]

Hi Ray

Our business is a partnership (me and hubby). We are still hoping we can pass on the lease as it is a good size building with flat that can be sub-let but we are running out of time and need to check our options A,B and C. So my landlord would become the main creditor not sure he would vote in our favour and that would be that!

Some good first hand information about IP will really look into this before I choose one already contacted 2 one seemed quite good the other very pushy still calling us now every few weeks when we said we would call back if we want to do it. Thanks for your time.

[MelanieGiles]

Hi kellym

As one of the forum experts, I feel that you have a good case for an IVA based upon an equity release from your property - and perhaps contributions depending upon how much disposable income you would be left with.

I would include the landlord's outstanding rent on the basis of current arrears plus one further year's rent. Of course the landlord would need to agree to this, but I have never had one who did not! And of course if they manage to re-let the property during that period, their claim will reduce accordingly.

Good luck in your search, and don't hesitate to ask any more questions.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[kellym]

Hi Melanie

Thanks for that it has made me feel so much better knowing we maybe able to stop debt getting higher. Me and my hubby are very close to getting work had some interviews and stuff so will stay intouch. As we will be newly employed would we still be ok to do an IVA equity release and who would mortgage us that high? We have had good credit ratings till now (fallen behind on shop rent) but mortgage now up to date only had arrears for 1 month to catch up first time ever. Its the personal loans thats falling behind now. Think we would be better doing an IVA now than in 12 months when we have another credit card debt from keeping shop going. This site has become a life line as there are not many sites with personal experiences and expert advice thanks so much.

[MelanieGiles]

Hi again

Another of the forum's experts, Welshboy (Tony Parsons) will be around shortly to give advice on mortgages.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[ray_a]

Hi Kellym

Might be a good idea to wait a week or two and see how the job offer goes and then you can start to sort out your income and how much you can afford.
You would need to consider the rent on the shop in your outgoings.

Just a further thought from the taxation point of view. Has your businesses got losses and haa your accountant managed to get a tax refund. Good area to check.

If you have children then do look at making a claim for tax credits. You might also be able to qualify for other tax credits as well.

Hope this helps!

[kellym]

Hi Ray

Yes have been getting working tax credit for a few months now. No children. Just keep your fingers crossed we get job offers but think we should be ok. Good point about tax we have not made loss but not earnt enough for 1 wage let alone 2 so will look into this thanks. Wow you guys are full of great advice wish I had found this site sooner.

[kellym]

Hi again my head is full of questions!
Ok question on equity release

How do we know creditors would agree to an offer of IVA equity release before we do it as this seems a bit risky massive debt and re-mortgage?

How will a company mortgage the house to say £135k on 2 incomes of £13k to £15k? We could afford a mortgage of say £1000pm (guess it would be this high with high interest rate) + bills just, but not sure how we get a mortgage 4 to 5 times our joint income?

Anyone out there done this and would £40-£45K cover debts of £100k plus IP fees?

would they prefer that to say IVA for 4 years then equity release for some as they get it quicker as a lump sum?

Sorry for so many questions think I am just so glad I found a place with no prejudice on previous history just genuine people who like to help our future.

[Adam Davies]

Hi
An Insolvency practitioner can give you a good idea as to the chances of a full and final settlement before you start the ball rolling.
You can get mortgages that are on a self certification basis i;e they do not check on your income,you just sign to say that your income is enough to cover the repayments.Normally the max you can borrow is 90 percent of your house value.
Creditors seem to be agreeable to one off settlement IVAs as the fees are lower and they can get their money quicker than in a traditional five year IVA.
Just be sure that you can afford the new mortgage repaymens and bear in mind possible rate increases.
Regards


Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[kellym]

Hi Andy

Thanks for that good point about the interest rates as that could be a killer in a few years. Think this is the way forward for us in a few months when we have stable jobs. How long do we need to have been in perm employment before we can apply for this? I guess mortgage companies would say about 3 months but due to not exactly being unemployed at all in last few years as we were self employed (although earing next to nothing) that must be in our favour. In response to self cert mortgages I know they dont ask for income ie wage slips but when we looked at them before thay asked for bank stats so this really is the same thing as it shows you outgoings and income!

Smile it makes people wonder what you have been up to!

[ray_a]

Others correct me if I am wrong but self cert it does not matter how long you have been in employment.

Should say self cert mortgage interest rates are a lot higher than the High St ones!

Secondly budget for another 0.5% based on some of the Economist's forecasts as Inflation is not quite under control so the Bank of england will have to increase rates again!

[kellym]

Yep thanks for the tip Ray does look like rates will increase. I based it on 6.5 to 7% makes about £1000pm mortgage on current term however if we are really tight we could up years a bit as im only 28. Thanks for your advice.

Smile it makes people wonder what you have been up to!