Advice Please

[standard]

Ok, so here's the facts:

O/S Loans:

Firstplus £18,500
Barclays £13,000
Egg £16,500

O/S Overdraft:

Barclays £8,000

O/S Cards:

Egg £4,500
Tesco £2,000
MBNA £4,500
GA CApital £5,000

I have a very small struggling business that just about pays me £2000 per month gross. I rent the family home, but have a flat in Wales with o/s mortage of £101,000 - and is probably worth about the same given the current climate.

I have so far not defaulted on anything, but am now maxed, totally maxed out.

Can I get an IVA and keep the flat and business - this is my main concern.

All suggestions welcome.

V Worried now.[V]

[kallis3]

Hi Standard and welcome to the Forum.

I am not an expert, but one should pick up this post and hopefully answer your questions.

[size5]

A warm welcome to you Standard.

You certainly have enough debt to be in the ballpark, so to speak, but some more info would be useful.

Could you clarify if the Firstplus is a secured agreement on your property and whether the GE debt is a secured debt on a car or vehicle?

Regards.

[standard]

Hi guys,

The firstplus one is long long termer at about 180 months or something. At the time they said they wouldnt secure it on my old house and did it as an unsecured loan - strange I know given the term, but it must be unsecured as my house was sold some 2 years ago and it never showed on the deeds.

And, now you mention it, I pay £90 per month on a van i use for the business which was part of a £4K loan over 4 years!

Yikes.

[size5]

So the GE Capital 5k debt is unsecured but you have a further debt on a vehicle which you didn't include originally?

Further, you mention the family home so do you have a spouse/partner? What about children? Are you a limited company or a sole trader trading as (T/A)? Do you rent the Welsh property out and if so does it cover the mortgage payments?

Sorry to ask so many questions all at once!!

Regards.

[standard]

Thats correct - the GE Capital is a credit card by paypal, unsecured. The van loan is secured against the van. I rent the Wales flat out and have an interest only mortgage on it. Currently rental inclome is £476 PM, with mortgage payments being £410 pm - however, there are ground charges on top of this each year so it basically wipes its nose.

I have a wife who is about to go back to work part time after having our son 8 months ago, and a step son who is 16.

The business is Limited with me and wife as directors.

Hope this helps!

[size5]

Thanks for that. The property seems to be in neither profit or loss at the moment, but of course there may come a time when the tenant(s) leave so unless you have it on long term let it is a factor that needs taking into consideration.

Could you confirm the business pays for the van and its running costs? (I'm assuming it does)

It looks as if you have £72k approx unsecured debt and a property without little or no equity.

Disregarding debt repayments, could you try and total essential household expenses, eg Rent, Council Tax, Utilities, Travel, Food and clothing etc, how much would you be left with in your estimation, being careful to make sure that you can COMFORTABLY live on what you have allowed yourself?

Regards.

[standard]

I actually pay for the van myself, as the business was set up on minimal funding.

Rent = £900 pm
C/Tax = £135 pm
Phones = £150 pm
Gas = £50pm
Electric = £60 pm
Water = £20pm

Left = £685 if no debts taken into account

[size5]

Thanks for your patience, I understand that I am asking ever more questions.

Disregarding for a moment that phone expenses look a little high, there are no allowances made above for food, clothing, tv licence, any travel (does the family run a car?) home insurance, life insurance etc.

On the other side of the coin, there is no apparent income from any other source, no child benefit, tax credits or income for your good lady. Would I be right in thinking that maybe you have listed your expenses only whilst your wife takes care of the rest?

Regards.

[standard]

Thats right. She looks after the food, clothes and puts fuel in the family car. I use the business to pay for my van fuel.

However, yes I pay £45 pm for life assurance, and pay the tv licence and £30 pm for house ins....what a lot of things you dont think about!

She doesnt do child tax credits after all the fuss over people having to pay it back.

[standard]

Sorry, and yes she looks after her own finances and I just try and sort the big things!

[size5]

Ok. The first thing I would say here is that you need to discuss this further, as a priority matter as soon as you can, with a reputable firm of IP's.

You should also be aware that your wife and her finances will be a factor, one way or the other, so it would also be wise to have a full list of ALL income and outgoings, whether your wifes' or not, to hand so that you can be advised properly.

For a good idea, you may wish to visit www.iva.com and have a look round at some reviews etc, I also suggest that you contact 2 or 3 firms to get a balanced view.

To answer your very first question, an IVA, if appropriate for you, can allow you to keep the flat and the business but you definitely need to speak one on one to a professional.

Hope this helps.

Regards.

[MelanieGiles]

Just to simplify matters here - how much do you feel you could comfortably afford to repay to creditors, taking account of your combined household income and expenditure? IVAs were originally created with the business person or company director in mind, so as long as you can afford to offer a realistic monthly repayment, which can be sustained over a five year period, this should be an option to give serious consideration to, given that you would be obliged to resign as a director if you were made bankrupt.

[size5]

Thanks Mel,

That was entirely the point I was trying to make, you phrased it in a different way. It certainly looks that the original estimate of 685 was over optimistic, especially if the lady of the house has not returned to work due to the new addition.

Regards.