Sink or swim?

[smithouse]

Hi,
I’m sure you’ve been contacted by people with all sorts of credit issues but mine seems to be worse than most and I need to find some light at the end of my very long tunnel.
In summary I’m 43 years old and now I’m employed by an overseas company as a sales manager which involves a lot of overseas travel. I also have a limited company in the UK which used to sell motorcycle parts. This was my fulltime job from about 2000 up until I joined the overseas company 2 years ago.
The Limited Company I still use to put some expenses and commission charges to my overseas employer through but the day to day trade that I used to conduct has now ceased and the only reason it’s still going is that I have a £10k overdraft facility with Barclays that’s up to the limit and I can’t clear although I have managed to keep up with the quarterly charges and put enough through the account that they seem to be happy. The company has a few old trade debts outstanding where I’m paying a set amount each month but these nearly cleared.
Additionally, I owe approx £35k in unsecured credit card debts although I have had the occasion late payment fee all are paid up to date. These debts whilst in my name relate to the business and go through the company accounts as does an unsecured loan with Cahoot which has around £6k outstanding.
From my personal side (or at least not related to my Limited Company) I have about £1600 outstanding to Egg (£350 mth) then that loan is finished and I have 2 credit cards amounting to around £5k. I also have a car on finanace at £550 per month with 18 mths left then a final payment of around £8k to pay. I need a large car for my job and I receive an additional £350 each month from my overseas employer towards this in addition to my salary & commission.
To add to all this misery I split up with my wife of 4 years ago and last Nov the divorce finally went through. However, during our split we agreed to keep hold of the marital house and I paid the mortgage and although we had a few tempory arrears payments are up to date. We’ve now agreed to split the payments so effectively my 60% payment is in place of maintenance payments for my kids.
The house has approx £60k of equity in it but I’ve been unable to borrow against that as I don’t live there plus my ex wife probably wouldn’t agree to it anyway (I now live in rented property with my girlfriend and her 2 kids)
Finally, have totally overstretched my self paying huge amounts of interest and repayments I don’t have a pot to pea in and my accountant has warned me to expect a sizable tax bill which I’m still waiting for news on.
How can I get out of this mess, ideally without the need to sell the marital house bearing in mind I still need a car so ideally don’t want to give this up?
My current job involves a lot of hotel bills and flights to be paid for and I’ve just got hold of a prepay visa card although I need to build up a healthy balance to for this to take place of regular credit cards. Also, whilst my employer has no idea of my situation (and I don’t want them to know) there is a clause in my contract which states I can be dismissed if I’m declared bankcrupt!

Whilst I have an employment contract from my employer my accountant and the tax man see me as self employed if that has an bearing in things. Down side is that to date I've not managed to save anything for tax repayments, it was so much easier PAYE!!
By the way, I live in the Uxbridge/Watford area.
Any advise greatly received !!!

[MelanieGiles]

You really need to take advice directly from an insolvency practitioner, as your financial position is not complicated, but there are just a lot of different aspects of it to consider.

I suggest that you look to a smaller firm, who will have a corporate practice as well as knowledge of the personal insolvency marketplace.

The equity in your property may well be at risk from creditors, so you ought to take advice soon if you forsee being unable to keep up with the repayments on your credit cards, and you might be better off liquidating the company if it is not trading any more.

[smithouse]

Thanks Melanie. I do intend finding someone after I speak to my accountant next week to see where I stand with my own tax liability.

[David Mond]

It seems there is inter mingling with your debts and those of your limited company. If you credit card debts are personal even though the monies were used by the company they are your responsibility.

Seek (as Melanie advised) advice from your Accountant as there may be mileage in liquidating your limited company and then seek the advice of a good IP. Visit www.iva.com for reviews on IP's. Good luck and keep us posted as to how you get on.

[smithouse]

Thanks David,

Can I ask if at the end of an IVA with all payments made on time do you then have a clear credit file or do you have another 5 or 6 years after that point where it shows up?

Just want to try and cover every option so I don't regret any decision made now with relation to say a mortgage.

Thanks in advance.

[Skippy]

The IVA will stay on your credit file for 6 years from the date of your creditors' meeting. Once it 'drops off' you will need to build your credit rating again. A bank account, mobile phone contract will all help with this.

[smithouse]

OK, understood.

Does setting up an IVA in the first place affect things like your existing mobile phone contract? I think I get around no credit cards or loans by using a prepay card but I run up large mobile bills each month due to my job which my employer pays back each month.

[smithouse]

Also, what is the typical time span to build up a good credit rating ? Not that I want to see another credit card again but I guess a good rating has implications in other ways.

[Skippy]

I was allowed to keep my mobile contract, and unless it's excessive it shouldn't be a problem. As your employer repays you back each month you should be ok.

[kallis3]

I've kept my mobile contract as well, no questions asked.

[smithouse]

does the mobile company actually get contacted or is it just a case of if they see you credit score go through the floor?

If only working from credit score I guess if your payment history is fine then no problem.

[Skippy]

I don't think they would be contacted unless they were a creditor and part of your IVA.

If you've got a good payment history with them you shouldn't have a problem - I managed to upgrade my phone when I was in an IVA, and again when I was BR.

[kallis3]

They don't get contacted, as long as you keep up the payments, there should be no problems.

When you come to upgrade, as long as you stay with the same provider I think they just check your account to see you have been paying properly.

[smithouse]

One more question: I have a car on finance (in my name) which I need for work and my employer pays me a monthly fee over and above my salary towards this. Reason being my employer is overseas so can't lease a car in the UK.

Am I likely to loose the car with an IVA even though payments are all covered ?

[kallis3]

If it is HP, then as long as you can keep up the payments on the car, and it is not a particularly valuable one, then you should be able to keep it.