The worst happened!

[Arkwright]

Some time ago I posted a thread about a possible worst case scenario...

Well unfortunately it is about to happen. I will detail as best I can the situation and what I'm looking for is a plan to tackle the various issues.

On 30th April my business will close down after 7 very difficult years of trading. Despite our best efforts, my wife and I have been unable to find alternative employment, but we live in hope.

So on 1st May we will have a combined income of £105.00 Jobseekers allowance plus £28 council tax benefit.

I am not in arrears with any of my creditors at this moment in time and never have been. I have contacted my mortgage company and they have offered me a 3 month holiday and have suggested that after 3 months they would look favourably at changing my mortgage to interest only. My hope is that the government 'Support for mortgage interest' scheme will kick in after the 3 months if we are still unemployed.

So onto my debts. I will have the following outstanding debts as of 1st May:

Business overdraft £10,000 (wife and I personal guarantors)
Credit card £7,000
Personal loan £4,500
Overdraft £1,500

I also have theoretical debts of £88,000 for remainder of business premises lease and £20 month for remaining year of mobile telephone contract.

I have opened a basic current account with a new bank.

My mortgage is for £120,000 and I had my house valued last week at £130,000.

We have no savings and no real assets other than my motorbike worth around £2,500. We have pretty much sold everything else of any value over the last couple of years to try and keep the business afloat.

I hope I haven't missed anything out and I'm sorry for the overlong post.

I would be most grateful if one or many forum members could suggest some sort of plan to start tackling the predicament myself and my wife find ourselves in.

Many thanks in advance.

[Hurricane Puffrose]

Re: The worst happened!

Hiya!

With the mobile phone side of things, I can help!

If you have been on the tariff (call plan) you are currently on for 9 months or longer, call them about reducing your tarrif. You can do this by £5 increiments to the lowest tariff, explain your situation to them and they may be able to help more.

When your contract is up for renewal, ask about Sim Only packages, where you dont get a phone but your line rental is automatically lowered. This way the contract is only a month, it rolls on after that, and you give 30days notice when you want to cancel!

I would also look in to contacting your creditors now to arrange lower payment plans... with an eye to increasing them when this bad patch ends.

[labman]

Re: The worst happened!

I am genuinely sorry to hear of your predicament, what a shame after seven years of hard slog keeping things going!

Firstly well done for tackling this so early, before it actually happens. Many would just have buried their heads in the sand.

The first thing you need to do is have a really detailed look at your income and expenditure. I will pm you shortly to see if I can send you a form which will help you to do this.

Separating out priority spending from all other spending is a major first step.

Once that is done, it is a case of looking at the 'new' picture and deciding on the best route from there.

In the meantime, as you have already done with your mortgage company, it would be a good idea to contact all your other creditors to let them know what is going to happen. Ask those such as credit cards and banks if they will freeze interest and charges - keep all these letters filed safely, and when you get responses keep not only the letter, but the envelope in which it came.

Unfortunately, at this stage, they are unlikely to agree to anything as they tend not to until you have missed a payment - a ridiculous system when you are trying to be responsible, and I hope you find differently. They are also likely to send you their own Income and Expenditure form to complete - don't. Use the one I send you as it will carry much more punch, as well as being much more helpful to you. It would be wise to look into your various options. These start from the informal Debt Management Plan, working through the then formal insolvency routes of an Individual Voluntary Agreement (IVA), Debt Relief Order (DRO) and Bankruptcy.

There is then the obvious issue of looking at your expenditure and identifying any areas where you could possibly cut down. I suspect you have cut everything pretty much to the bone anyway - people in your situation usually have by this stage.

For now, I think that is more than enough to think about.

Once again, well done for facing up to this rather than running away from it. It will produce a better outcome in the long run, whatever that might be.

pm coming your way now.

:beagle::beagle::beagle:

[Guest]

Re: The worst happened!

Hi
It may be worth contacting one of the professional free debt agencies like CCCS or Payplan.(links below)
http://www.payplan.com/
http://www.cccs.co.uk/Portals/0/Skins/homepage/images/dr-cta-area-family.jpg
These will help you prepare a financial statement and negotiate with your creditors for you. They will also advise as to your best course of action as per Labmans post.
They will also be able to advise on how to obtain information on any benefits you may be entitled to.
Peter

[labman]

Re: The worst happened!

For the record here, my pm offered to send a CFS to be completed, and stated that my charity was not best placed to help in a situation like this, but I would happily point him to others that are well placed.

The two Peter has mentioned are options, and would definitely be included on my list. However, to explore possibilities of what options are available to him, my feeling is that the OP would benefit more from going to a free organisation where there will be no pressure whatsoever to follow one particular route, and where full and open advice is available about every route.

This part can obviously be done on open forum, but physically sending him stuff cannot. I have sent details of my charity to him so that he can check I am who I claim to be and check everything is above board and that the charity I claim to have is a professional free debt charity. I have also suggested he may want to contact Celestine to check I am above board.

I did not want the past repeated, where people think I am trying to grab people for my own charity. I am sure Arkwright himself will verify what I have put here.

Apologies if I'm tetchy about this, but I guess for a while it's a bit inevitable.

[Hurricane Puffrose]

Re: The worst happened!

wouldn't dream of thinking that of you Labman! :tinysmile_aha_t:

I'm sure I speak for everyone here when I say that if there is a problem that needs solving, one of the first names in my head is Labman.
Rest assured, we know you are above board and kosher.
Big hugs going your way hun...
p

[Guest]

Re: The worst happened!

Hi
No one is infering anything of course Labman.
We understand that you have the best intersts of the OP at heart, but it does not preclude others from offerring advice, as i am sure you will acknowledge.

Peter

[Arkwright]

Re: The worst happened!

Thanks for your replies so far guys. I consider myself to be a fairly intelligent man (though my wife may beg to differ) and I welcome all advice and help. I will endeavour to carry out my own due diligence with regards advice offered, sp please keep it coming.

[labman]

Re: The worst happened!

Thanks all, and apologies for being tetchy! It's good that things are genuinely in the past. We move on together to help Arkwright in a very tricky situation.

Arkwright, as I have already said to you privately, I am sure you will find this site a superb source of support, information and advice. You would be hard pushed to find the breadth and wealth of knowledge here in one place anywhere else on the internet.