Tag Archives: debt

All done – Insolvent

Well, the meeting happened today and it’s official – My company is insolvent.   Loads of forms for me to sign but importantly none of my creditors turned up to the meeting, which made it really easy.

There were 4 creditors due, my bank, my accountant and the HMRC (2 debts) and none were interested in attending.  Although that is good news, it kind of shows how you are viewed.  The debt of £24,000 is massive to me but apparently not worth anybody else’s time!

What happens now is that all the forms and reports are sent to the creditors and Companies House, and I will appear in the paper next Thursday.  Coincidentally, I am in London next Thursday so may buy the financial paper out of morbid curiosity.   It is sad though, I worked very hard to set myself up but in the end, the HMRC and family related issues meant I could never carry it on.  Once you find yourself in trouble, you rarely get out of it.

With regards to the timelines, everything will be completed by 31st January 2015.  Any of the Creditors, before that time, can challenge anything they like but as my company has a total asset listing of NIL, the Insolvency Practitioner and I find it unlikely we will see that challenge as it is a waste of time.

I don’t feel great about it at all though, a lot of you will think I should be relieved but not really.   It’s still a form of giving up in my eyes but life teaches you that you cannot fix every situation.  Sometimes you have to stand up and say “I’ve done all I can, help?” and this is what happened here.

For anyone going through this, or planning on Insolvency, this is what it means to me personally.   The Insolvency goes against my company and not me personally, meaning I do need to declare it.   The Insolvency does not touch personal possessions so I won’t lose my home.  Finally, it stops brown envelopes.  The flood of them with the associated threats.

For that peace of mind, the decision has been the correct one.

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It’s done. I manned up.

Hi all

I know you have been waiting to see whether I phoned my parents, and I did.  It took me a while to build up to it but I did it.  It went how I thought it would, the words I expected to see of how proud they are, and want to help.  However, and I knew it wouldn’t, it didn’t stop the shame.   I cannot stop that feeling, just complete humiliation.

I expected my life to be so so different, but it isn’t.  I keep thinking of all the things that went wrong, and what led to this.  But, is this life, you are dealt what you are dealt.  It is just a shame that most of my cards have been rubbish.

Back to this though, my parents will loan me the money.   This means I can go down the insolvency route and stop the HMRC coming at me.   So why do I not feel any relief?  It is hard to explain, very hard actually, that even small victories mean nothing until I pay things off.   I realise my parents will never pressure me, and indeed have stated there is no rush at all to pay it off, but I am just not looking forward to going round.

It may sound irrational, but I just feel if you owe people money you cannot do anything that appears affluent.  For example, a holiday as it looks (to me) like you are using money you could have used to pay people back.  Even if people may not see it that way, but I do.

My point is, I am still trapped.  Not trapped in a situation whereby my house and possessions could be taken away, but by the knowledge that I am not free to live a ‘normal’ life.  It means that that even if on certain paydays I may find myself to be lucky enough to have an extra couple of hundred pounds, I cannot use it for a treat.

In essence, my life remains on hold.  Just with less people chasing me.

Bottled it

So, I bottled it.  I went round to my parent’s place and was all ready to talk to them but the timing was somehow not there.  Normally my kids go and play but yesterday they wanted to play games with Nana!

Ordinarily I get asked questions about how it is going, am I still being hassled by the HMRC, can they help somehow etc.  I had planned my replies to the expected questions but they somehow never came along.  So I will do it tomorrow.

I think I am more comfortable doing it over the phone, which may sound odd to some of you.  But try to look it from my perspective, it is very uncomfortable to ask.  Mentioned the shame element many times, at least on the phone I can hide my face and emotion.  I am very much a closed book and, prior to this blog, barely anyone knew anything about myself or my situation.

I can have everything written down too, to chat over the phone.  Then I don’t get distracted, or side tracked.   I need to just be honest and get it over with.

When you are in debt, and trying to find a way out, you will find yourselves in so many uncomfortable positions.  Meetings that you do not want to be in, multiple forms you do not want to be filling in, your personal and financial life being probed and questioned.  The thing about being in debt is it so much more about just being skint, it is very very intrusive.   But, as intrusive as it is, you are still able to manage who in your inner circle knows.  Other than the dreaded brown envelopes, there is no other way of people finding out unless they have a real reason to look at you.

That is why it is difficult to actually admit to family and friends.   You are almost breaking your own code of secrecy but needs must, I am out of options.

Therefore, tomorrow, I will do it.

If all else fails, go home

Where, assuming you have reached this age, do/did you think you would be at middle age?  Me, I hoped to be settled on a personal and financial basis.  Sadly, that is not the case.

I am out of options for raising the initial funds for the Insolvency, I have tried multiple options and my last option today has not panned out either.  This leaves only one way to go, a humiliating cap in hand walk to my parents.   Please don’t get me wrong, they offer to help me multiple times in a month so the shame is on my part.   Who would actually feel comfortable with asking your parents for a few thousand pounds?

It will be paid back, everyone I have ever borrowed money from has been paid back.  Except for the HMRC of course, but that is a very different matter.  I feel very uncomfortable with borrowing money from family or friends, despite the genuine offer it puts a different pressure on me.

This time it is important, this is not for personal debt clearance or to give me extra money, it is to draw a line under my company and it’s debts.  It looks like, until I clear this debt, that embarrassment comes hand in hand with it.   It is has been going on so long now I forget what it feels like to have wages and have zero to pay out.

I’ll go round this weekend and get it over with.  Believe me, I can’t look any more pathetic than I already look.

bills, bills, bills.

Sometimes, and it is rare, my situation gets to me.  It does take a lot, by definition I am a very strong person.  I handle personal crisis well but occasionally it gets too much.  I can only juggle so many things at any one time, today got a bit too much.

Started last night when I got in from work, my ex was kind enough to leave the usual school letters and bills to be filled in, signed and paid and then to be returned to the school.  Quite why she cannot pick up a pen and at least fill them in is beyond me but I am well used to it.  However, there were a few more than normal.

I had come home with £24 in my wallet, proud I had made it through the week after withdrawing £50.  I figured that would get me though the weekend but no, and you can guess what is coming here, the school forms requiring payment equalled £24.  Totally gutted…my wallet was now empty.  Whatever I try to do, every week I end up with no money.  It annoyed me and just felt a little deflated.

Today I received 2 letters, the first was a fine from my bank for my business bank account going overdrawn.  This was expected as I have ceased trading.  This letter will be dealt with by my Insolvency Practitioner but it was still unpleasant to receive the letter.  I knew it was was bad as it was HAND SIGNED!  Normally bank letters have printed signatures, but not mine.

Onto letter 2.  My energy company is putting up my direct debit by a whopping £46/month.   This is an additional £500/year.  This was my breaking point today, I just feel like I always lose.  No matter how many savings I make, or things I sell, or cuts to spending I perform I somehow always end up back at square one.  I have mentioned this before, once you are at the bottom of the pit then somehow you stay there.   It does seem that you need that lucky win, or lottery win, to pull your out.

I wonder how many other people in debt feel this way.  This never ending drain on your funds?  Perhaps when you are affluent you don’t notice these little things but sadly I do notice them.  I just want a break here, it is so hard keeping everything paid and up to date as a single parent.

It is now only 7 weeks till Christmas too.  Something really needs to happen, financially, and quick.

HMRC just won’t let it lie

Long day today, stuck in traffic and it took a while to get home.  When I did, checked my mail and there it was – a brown envelope.  Avid readers will know I hate them, it takes me ages to open it as it creates fear and brings me out in a sweat.  They are never nice and they are always from the HMRC, so I knew this wouldn’t be good.

What a shock (sarcasm), they have totally ignored the letter from my Insolvency Practitioner and sent me a demand for Corporation Tax, £14663 payable immediately.  We expected this to happen, purely because they know they have threated me before and I have somehow raised the funds to pay them off.  Not this time, I have sent the letter over to my IP for them to deal with.  This was the point of going through business insolvency, to stop this.  One week after the declaration and the HMRC ignore it.

I cannot think of one good word to say the HMRC.  They are like a dog with a bone, they bully and harass you until you break and care not for your personal stories or strife.   They want the money you owe, the money they added on, and the money they will add on when you can’t pay after a month.   It stops now.

Before I started this blog, I read a lot of forums about to stop these threats and the amount of pages of broken souls desperate for some sort of a solution to stop the letters, phone calls and visits.   I felt for all of them, I was lucky that I could pay off such massive amount of money but it did me no favours.

The best advice I have been given is not to pay.  If you are in trouble, do not pay.  Most of us want to pay, including me, as it is the right thing to do.  However if that debt target continues to move then you are never going to catch up.  I thought I was doing the morally right thing but no.  I should have said years ago I couldn’t pay and stopped it there and then.

There are times in your life when right is actually wrong, and this is one of them.

At least I can pass this letter on, legally they cannot threaten me any more.   On a positive note, I found 21p today!  I continue to find small coinage.  Every little helps!

So much paperwork!

It is the Insolvency Meeting Thursday so still wading through all the paperwork I have to complete and provide.  Not a complaint as it is for the greater good, but there is so much information to provide.  Not surprisingly, my accountant has been none too helpful seeing as they will become a creditor.  Informed them what was happening, no reply!  However, I won’t worry as the Insolvency Practitioner will contact them to provide the documentation.

Work has also been the same, lots and lots of paperwork to do.  I am surrounded by paper and pens at the moment!  Also, my printer is low on ink.  But, a busy job is a good job as it means there is lots to do which ensures longevity of employment!

An added bonus tonight though, my daughter refused to go and stay at her mum’s.  This is only the second time this has happened, bless her!   I was all set for yet another night in with the dog, and I get the bonus of my angel!   It impacts my admin but who cares, who can moan when their little girl wants to stay with their dad?

With everything going on, I have noticed how fast time is going.  Somehow tomorrow is Wednesday already and that is another full day.   Sometimes time flying is good but right now I could do with it slowing down a little so I can catch up.

I will print and complete my final forms and statements tomorrow, then I am all prepared.  Just got to sort the payment and I am ready to go.  Keep an eye on those London papers for the Insolvency message soon!

Family Portraits

We have concentrated a lot on debt recently, for good reasons, but this blog is also about divorce.

Half Term next week, so a week off for the kids from school.  When they break up from school they bring home all their projects, PE kits, etc.  Always nice to read through them and see what they have been working on.

My son has always been closer to his mother.  This is totally natural in a boy, also he is quite young.  Admittedly over the last year though, he has definetly become closer to me but I always expect drawings and writings to predominantly feature his mother.   As stated before, whatever the cause of the breakup you must never speak untoward of the children’s mother – as much as you would love to!

Checking through his pictures, his recent project was family.  Instant dread of course, but it was an interesting insight this time.  All the pictures, entitled ‘familee’ (sic) still contain only 3 characters.   We have touched on this before of course here, but this was a specific project.  He has to write as well this time.

My daughter has been quite vocal about the breakup with multiple questions, but my son has always been quiet about it.   But evidently, he is well aware and has many questions of his own.   The difference between this set of drawings and the last is it includes location.  If you check the drawing of the house, it is actually split in two.   One side is my side, one side is his mother’s.  It is actually quite clever.

Above my side is the sun, over hers is the rain.  Interesting isn’t it?

I don’t have the children much this weekend, last night my son gave me a hug and asked if he had to go tomorrow.  I said it was up to him but I can see he knows he has to go, he doesn’t want to upset his mum.

Being the stability and strength for my children is paramount, it is also why I have never let the sceptre of debt interfere in their lives.  I go without so they don’t have to.

I do not give moral advice, but anyone reading this think carefully before doing something you regret.   If you have children, they will be affected.  Not just talking about splitting up a family here, families split for genuine reasons other than a marital affair and sometimes it is unavoidable.   Just let them be children, where fairies and magic exists.  Adult traumas must not intertwine, a child should remain child as long as they can.

The adult world is not a great place to be.

Results of my meeting

Firstly, thank you to all the readers who have sent me messages of support and indeed asking me how the meeting went.  So, here is the summary.

Not sure why I was feeling nervous, possibly as the meeting was in a building that I had worked at 3 times so there was some fear I may see someone I know.  I had all my letters and evidence in a folder and felt prepared but why the nervousness?  In reality, I should have been excited but the wait in the reception room made it worse.  I also wondered if the 2 receptionists looked at me and knew I was another person who couldn’t pay their bills, another loser if you will.  But, I digress….

The meeting was an 85% success.  I cannot include ALL the tax debt, but most of it.  So, basically I can apply for Insolvency and in effect not pay £20,000 in tax debt.  I would need to pay the other £5000 as it counts as ‘personal tax liability’, but I can tackle that better than tackling £25,000.  The cost of the procedure is £4500 as well, which I need to pay up front but that may have been sorted if I can swallow my pride.

The explanation was really clear, my limited company will be wound up and not myself personally and the insolvency is only advertised (is advertised an appropriate word?  shamed would be better!) in the London papers.  I don’t live in London so that is not a problem.  I also received the clarification that it will not affect my job and I did not need to disclose it either.

Moving on to the plan.

I have to provide a mountain of information, all readily available from my accountant.  Interestingly, you need 2 creditors to apply for insolvency.  One is the HMRC, the other will be my accountant as I will no longer be allowed to pay them as the business bank account will be suspended.   I also need to provide a timeline of went wrong, but keep to the facts and resist the urge to state how the HMRC have made my life a living hell.  Some other documents and ID as well are needed, but all manageable.

I also have to type up a board meeting, with minutes, whereby the shareholders agree to wind up the company.  This is purely admin as I am the only shareholder/director so it just for show.

The person I met was extremely helpful, I think she could see how broken I was.  I am not putting this in here to give you all an image and to feel sorry for me either, this really has been a nightmare for me and I have a lost of lot because of it.  Both on a personal and health level.

The summary is that next Thursday I have my follow up meeting, pay the money, sign lots of things and it is taken out of my hands and into the Insolvency Act.   The whole thing takes 3-6 months but in that time the HMRC cannot contact me, cannot fine me and cannot charge interest.  I have handed over all my letters, that was a relief.  I have been hiding them away so I didn’t have to see them.  After that meeting, everything is in motion.

I was surprised how many meeting the team have, but for bigger companies than me.  Would you like to know the main reason these companies have had to ask for advise or apply for liquidation and/or bankruptcy?  HMRC FINES!!!   Oh how I understood, it is largely what made me unable to pay everything off.  I never imagined actual trading companies were in the same boat as someone like me.  Strangely it made me feel better, less like I was being singled out.

I feel a little better, but until I get the official letters I will remain guarded.  The fact is though, I should have done this ages ago.

Lessons I have learnt about debt

When you are desperate to clear your debts, you look into as many options as you can.  And, those options have been repeated by well being comments via this site.   They are all top tips and good advice, however this is what I have found out.

There are many ways to help with debt and financial difficulty, some work, some don’t and some are not applicable sadly.   What I have found out is that is depends on your debt and current situation. The factors that affect how you can get help are your job, the money you earn, who you owe money to and your health.

There are only 2 easy ways out of clearing your debt, and I use the word easy as your debt will be wiped out BUT your life as a future creditor is over.  They are, of course, Bankruptcy and Insolvency.   These 2 options come with drastic consequences but depending on your life situation, it may be a great move for you.  For instance, if you were single with no kids and could start again, is losing your home to clear your debts a bad thing?  Compare that with a family faced with the same option, and the single person can look positively at it.   Insolvency is similar, but costs a fair bit of money to set up.  It is unlikely you will have a spare thousand or 3 to set it up but you CAN include tax debt and it is unlikely you will lose your home.

Tax debt, we have mentioned it so many times, but any money you owe to the Government cannot be included in any conventional debt relief schemes and loans.   I am stating this fact again so that you understand why I could not take up some of the options.

Loans – so many loans available, but in 2 categories.  Unsecured and Secured.   Unsecured is not an option for anyone with bad credit.  It is a NO immediately.  So, secured loans are an option.  The drawback is obvious, you are moving all your debt into a loan directly against your home.  The interest rates are quite high too.  For example, I looked at a £25,000 secured loan and the amount to pay back was a hefty £33,000.  Additionally, you can only borrow an amount that is comparitable with your equity.  So if you have 10K equity, you can only borrow 10K.

Bad credit equals no new credit cards, so no consolidating balances onto different credit cards with lower interest rates.

Bank loans, again if you are honest you will lose.  Sadly, I was too honest for my own good.  Mention tax debt and it is goodbye sir, good luck.  Quite why HMRC debts are ringfenced are beyond me.  Same with mortgage payment holidays or partial payments, mention what it is for and it is a NO.

Debt Charities, wonderful for advice but really geared for smaller debt problems and often solved by re-budgeting or making key changes in your lifestyle.  They do a wonderful job helping people but again, I would say this is for ‘normal debt’.

So what does work?

Well, for me, it looks like Insolvency.  However, there is only one other thing that has helped me, and that was the use of a reputable debt consolidation/management company.  I did my own research, found a good one that I will happily recommend them should anyone ask.  It was the only option whereby I could include most of my debts and debtors and have them all move into a monthly lower payment.  The company got my interest frozen for 12 months and a decent payment plan which meant, importantly, that I was still decreasing the balances.  The cynical will state you pay a fee each month, and you are absolutely right to say that.  I pay £30 month fee, now if you compare that to the combined interest of all the bills which was £136/month then it was worth it.  The extra money left allowed me to pay back 2 other loans.

To summarise, research all options and don’t go with the popular choices.  Not all of them are a fit for individual circumstances, most importantly don’t ‘panic sign up’ to things.  Honestly, if you have a tax debt like me then don’t waste your time on standard solutions, as it cannot be included.

It is a world geared towards the wealthy, if you are down and out you have to fight like mad to recover from it or get really lucky.  That is how I have found it to be.