Author Topic: Self-employed with CC Debt  (Read 2178 times)

annonuser4

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Self-employed with CC Debt
« on: Oct 12, 2012, 11:01:21 AM »
My wife and I are directors of a limited family business and we have both used cards over the years to pay tax bills and occasional living when we were not earning enough.
I have 40k on cards and my wife has 25K. This amounts to about 1.8k per month for payments at the lowest amount, which I know is not good.

We scalp all we can from the business and sometimes income is down and we end up using cards again. The cycle now means we are in a position where cards are a real burden.
I was wondering what options we have to approach the card companies to ask to submit a lower payment, without effecting the businesses standing. Can they come after out limited company or threaten CCJ should we start to faulter with payments if we approach them first?


James Falla

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Re: Self-employed with CC Debt
« Reply #1 on: Oct 23, 2012, 09:40:33 AM »
Hi annonuser4
If you are running a limited company the status of your personal debts should not affect the company in any way. As such there is nothing to stop you negotiating reduced payments with the debt companies in question in the form of a debt management plan or even considering an IVA to resolve your debt problem once and for all (which might be a better solution given the size of your debts). An IVA would stop further action such as CCJs where a DMP would not guarantee this.
Having said that the only time when the status of your personal debts will possibly affect your company is if you owe money personally to the bank where your company account is also held. If this is the case, alerting the bank to a problem with your personal finances may well prompt them to worry about the status of your business finances and thus possibly withdraw business credit facilities.
 
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Steven Jackson

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Re: Self-employed with CC Debt
« Reply #2 on: Nov 06, 2012, 11:24:42 AM »
Hello annonuser4
There should be nothing to stop you speaking to all of your personal lenders and asking them to accept reduced payments. This is basically the implementation of a DIY debt management plan (DMP). There should be little or no affect on your limited company by doing this. However starting a DMP is no guarantee that any of the creditors will not take further action against you in the form of applying for CCJs. In addition if you are homeowners, the rules on Charging Orders have recently changed. As such if any of your creditors are successful in applying for a CCJ against you they can now automatically apply for a charging order against your property. This change in the rules is expected to result in an increase in charging order applications.
As James has said, I would recommend that you also consider an IVA. If you implement this kind of solution it give you and your property legal protection from further creditor action so definitely worth consideration.
In terms of how either a DMP or an IVA would affect your company, the answer is that they should not. However if your personal bank is the same as your business bank and the company currently uses credit facilities then you need to be careful. Informing the bank of personal problems will automatically worry them that your company is struggling as well..... I would urge you to speak to an expert about this situation  so they can go through the options with you.
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