Posted: Thu Oct 04, 2007 12:30 am
This is my first posting after many months of reading post after post on this excellent forum.
We seem to be in such a complicated situation and are going around in circles trying to get to grips with possibilites.
I have so many questions but will try and give some backround first.
We have been in our IVA now for about 15 months - We have run a business for twenty years and over these years we have amassed massive debts - we always managed to keep going but in the last 2 or 3 years it became clear there was no where left to turn to raise the credit to pay for the credit!!
Without going into all the gruesome detail we owe a lot more than anything I have seen on here!!
We entered into an IVA giving a return of 26p in the £. We also have a "4th year" equity clause on our house asking for "the property to be remortgaged before the end of the IVA and 100% of the net profits estimated at approx £10,000, are to be paid into the IVA."
As I said we also run a shop (on which we also have a mortgage) - this was NOT included in the IVA.
We agreed to open the shop for longer hours to meet the IVA payments however this did not prove succesful so my husband has taken on a night job in order to raise the extra income and I have also taken on part time work.
We are both working long hours to enable us to meet the payments - I am not sure how lomg my husband can keep going on this basis as he is working the equivalent of 65 plus hours a week plus paperwork/stock buying etc.
We have an 8 year old child and are in our 40's - Family life has become non existent as you can imagine - We rarely see each other as if he is not working in the shop then I am.
This year the shop has been less profitable than we would have expected - a general trend within the town/area in which we live - we have never seen so many empty/for sale businesses.
To make matters worse for us a multi national pub/restaurant is moving into the town - this will be a very serious threat to our level of trade which has already taken a bashing from other individual similar businesses opening in town and falling numbers of holidaymakers in the area.
I am awaiting surgery that will mean I am unable to work for at least 2 months.
We are seriously doubting that we can sustain the IVA for another 3 and a half years for the above reasons.
We are now desperately trying to look at the various possibilities open to us but it seems so complicated - obviously we are trying to avoid bankruptcy as this would mean the loss of everything we have worked so hard to achieve over 20 plus years and life as we know it!! but to be perfectly honest it is looking more attractive week by week!
The possible options that we have toyed with so far :-
We walk away from the whole lot - declare bankruptcy - lose our home of 20 years and lose our main source of income.
Question 1 - Why was the business premises not included in our IVA when this had been declared to the providers? In bankruptcy how would the business be dealt with as there is approx £40,000 equity in the freehold? Would we be allowed to continue to trade with presumably a payment order applied??
Question 2 - To ourselves!! Would we even want to continue to trade having lost the lovely home we have struggled so hard to pay for over the years - or better off going into rented keeping on 2nd jobs only and claiming available benefits thus having less disposable income but better quality of family life??
Another possibilty -
We attempt to offer a full and final by selling both the house and the shop?
Question 3 therefore :- would we be allowed to do a sort of staggered full and final on the basis that the house and the shop would never sell at the same time - we would obviously have to sell the house first and move into rented accommodation whilst continuing to trade awaiting sale of the business.
Question 4 - Would the IP see the equity from the house as a windfall rather than a % towards a full and final?? And the same again with the sale of the business? - Could that equity also be seen as windfall!!? Thus leaving us having given our creditors the same return they would have got in a 5 year IVA but us still having to declare bankruptcy having cleared up the mess for them!!
Last possibility :-
We struggle on with the IVA as long as possible in the hope that we can make the 5 years and manage to remortgage in the 4th year - working every hour God sends - probably wrecking our marriage in the meantime! Making ourselves ill through overwork and stress and still probably fail due to other cicumstances before the end of the term.
Last question - if we do continue on - our existing mortgage is a self certification mortgage where we were able to borrow more than would be currently considered prudent based on our income level - it is therefore possible that we would not be able to remortgage at a higher level than we are in at present as we are already considered sub prime and paying interest only.
Any thoughts and comments would be hugely appreciated!
We seem to be in such a complicated situation and are going around in circles trying to get to grips with possibilites.
I have so many questions but will try and give some backround first.
We have been in our IVA now for about 15 months - We have run a business for twenty years and over these years we have amassed massive debts - we always managed to keep going but in the last 2 or 3 years it became clear there was no where left to turn to raise the credit to pay for the credit!!
Without going into all the gruesome detail we owe a lot more than anything I have seen on here!!
We entered into an IVA giving a return of 26p in the £. We also have a "4th year" equity clause on our house asking for "the property to be remortgaged before the end of the IVA and 100% of the net profits estimated at approx £10,000, are to be paid into the IVA."
As I said we also run a shop (on which we also have a mortgage) - this was NOT included in the IVA.
We agreed to open the shop for longer hours to meet the IVA payments however this did not prove succesful so my husband has taken on a night job in order to raise the extra income and I have also taken on part time work.
We are both working long hours to enable us to meet the payments - I am not sure how lomg my husband can keep going on this basis as he is working the equivalent of 65 plus hours a week plus paperwork/stock buying etc.
We have an 8 year old child and are in our 40's - Family life has become non existent as you can imagine - We rarely see each other as if he is not working in the shop then I am.
This year the shop has been less profitable than we would have expected - a general trend within the town/area in which we live - we have never seen so many empty/for sale businesses.
To make matters worse for us a multi national pub/restaurant is moving into the town - this will be a very serious threat to our level of trade which has already taken a bashing from other individual similar businesses opening in town and falling numbers of holidaymakers in the area.
I am awaiting surgery that will mean I am unable to work for at least 2 months.
We are seriously doubting that we can sustain the IVA for another 3 and a half years for the above reasons.
We are now desperately trying to look at the various possibilities open to us but it seems so complicated - obviously we are trying to avoid bankruptcy as this would mean the loss of everything we have worked so hard to achieve over 20 plus years and life as we know it!! but to be perfectly honest it is looking more attractive week by week!
The possible options that we have toyed with so far :-
We walk away from the whole lot - declare bankruptcy - lose our home of 20 years and lose our main source of income.
Question 1 - Why was the business premises not included in our IVA when this had been declared to the providers? In bankruptcy how would the business be dealt with as there is approx £40,000 equity in the freehold? Would we be allowed to continue to trade with presumably a payment order applied??
Question 2 - To ourselves!! Would we even want to continue to trade having lost the lovely home we have struggled so hard to pay for over the years - or better off going into rented keeping on 2nd jobs only and claiming available benefits thus having less disposable income but better quality of family life??
Another possibilty -
We attempt to offer a full and final by selling both the house and the shop?
Question 3 therefore :- would we be allowed to do a sort of staggered full and final on the basis that the house and the shop would never sell at the same time - we would obviously have to sell the house first and move into rented accommodation whilst continuing to trade awaiting sale of the business.
Question 4 - Would the IP see the equity from the house as a windfall rather than a % towards a full and final?? And the same again with the sale of the business? - Could that equity also be seen as windfall!!? Thus leaving us having given our creditors the same return they would have got in a 5 year IVA but us still having to declare bankruptcy having cleared up the mess for them!!
Last possibility :-
We struggle on with the IVA as long as possible in the hope that we can make the 5 years and manage to remortgage in the 4th year - working every hour God sends - probably wrecking our marriage in the meantime! Making ourselves ill through overwork and stress and still probably fail due to other cicumstances before the end of the term.
Last question - if we do continue on - our existing mortgage is a self certification mortgage where we were able to borrow more than would be currently considered prudent based on our income level - it is therefore possible that we would not be able to remortgage at a higher level than we are in at present as we are already considered sub prime and paying interest only.
Any thoughts and comments would be hugely appreciated!