my options

[john.a]

I own and run my own business. I am in a finacial nightmare. Chickens have come home to roost.On applying to the Halifax to top up a loan. I was sucessful.I then got a phone call informing me that they had made a mistake 2 years ago, they had sent me a letter on the 10th October this year telling me so.They are claiming an overpayment of over 7,000 The overpayment was not flagged up on my application by telephone earlier this month. I intend to test this in court as I believe there was no letter (I didn`t recieve one)

On reflection They are right, I did recieve an overpayment but it didn`t register at the time of reciept September 2005. I have 2 months to respond by Late December 2007. Such a claim would drive me to bankruptcy as I could not possibly meet the repayments on this loan or others. I am faced with a stark choice then.All my debt is unsecured. I live in a mortgaged property , but my wife of 8 years pays the mortgage, so any claim on the property by creditors would be open to be contested.I owe in total 44,000 unsecured. My business is flowing OK. My turnover is 21,000 PA and rising steadily. I have an accountant ( tax technician ) I am also in reciept of Child benefit and DLA for my son who is now a vulnerable adult.

That is the background now for best advice on my options in view of the up and coming contest.
1. Petition for my own bankruptcy
2. The Mrs will help with a secured loan halving the repayments to creditors but still contesting the Halifax claim, or even make an offer of repayment for a fixed amount for a fixed term.
3. Seek an IVA and include the Halifax in and giving up any thoughts of contest. Or
4 a Debt management programme conditions as above in 3.

I am of a mind to go the bankruptcy route but I wonder if my cameras and computers can be classed as tools ? I am a cameraman and video editor sole trader status.

[ray_a]

Hi John.a

Firstly sorry to hear of your plight!

Experts in insolvency will certainly help by giving you the various options.

Given the amount stated bankruptcy sounds drastic and it may be depending on your other debt ie listing of creditors, an IVA could be considered and it might help if you could provide some more details. The reason for this is that creditors see IVA's differently! Basically the more you have with no large ones give you a good chance of success of getting an IVA!

If you become bankrupt there is a good chance you would keep your tools of your trade as you have to make an income!

Hope this helps!

Do come back and good luck!

[jpj]

As far as Im aware you cant be bankcrupt and run your own business!

Your wife may pay the mortgage but is the mortgage and/or deeds in both your names??

I think an IVA may be your best option.

As regards The Halifax I would just leave it, you should concentrate on sorting your future not battling Goliath over the past..!!

[catullus]

As to your last question, the probable answer is that the assets will be treated as tools of your trade and will therefore be exempt from the bankruptcy.

The Official Receivers manual on this issue gives the clear impression that OR's are encouraged to look on such claims sympathetically but issues that might affect the final decision are;

1 Each OR's office operates a different policy and there's no guarantee of uniformity in the decision

2 The OR will have to be satisfied that your trade is viable ie that it makes a profit. That being the case, it will have an effect on the amount that you pay in to a bankruptcy.

3 The relevent assets will have to have a value proportionate to the business ie it's profit

As to the options that you have, I'm afraid I'm a bit lost about the dispute with the Halifax but it doesn't sound hopeful to me that you could defend yourself succesfully against the claim.

More importantly, in deciding whether an IVA might be an option, you'll need to work out what disposable income you believe that your household could offer your creditors. If you can post some details of this we might be able to give you a better idea of the factors that will affect your decision.

[MelanieGiles]

If you are a joint owner of the property, you share will vest in the Trustee once you are bankrupt, and it is unlikely that you could argue exonoration just because your wife has paid the mortgage payments.

You could always offer a full and final based IVA using money raised against the equity in the house.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp