Hello slipsliding,

If the debts are in your personal names (i.e. they are not in the name of a limited company that you run) then they would count as personal debt rather than business debt. Business difficulties commonly lead to personal debt unfortunately.

If that is the case then Trust Deeds are one of the options that should be considered.

Do you rely on income from the properties being rented out? After you have made mortgage payments (and paid other associated costs) are the rented properties profitable? Will they be profitable after the mortgage costs have increased?

Given the level of unsecured debt it does seem like some sort of prompt action would be wise.

all the debt is in our joint names,at present the rents give us money to live and pay the credit cards.
with recent card jacking we cant afford min payments and when mortgage rate changes we will be 1500 month short at least.
we have appointment with CAB in a week.

Thank you Trust deed expert,
we have tried remortgaging but the drop in property values combined with drop in Loan to House Value means we would need a lump of money to add to the remortgage to make the figures work.
We dont have any secret stash of cash!
we thought we could 'tough it out' through the crunch but mortgage payments and credit cards the rise in rates just puts maintaining payments out of our reach.
Icing on the cake....Our tenents also are paid from a Dubai company!

Sounds like you do need to get some expert advice to assess your options, slipsliding, so your visit to the CAB is a good idea. I am sure myself or Mark would be happy to give you a second opinion if you wish, just click on the appropriate link.

As an aside, are you sure all of the debts are joint? Credit cards are very rarely joint - usually you find that there is only one person liable even though another person may be a second cardholder. It is quite an important point to clarify before you seek advice as the breakdown of the liability for the debts may have a big impact on what your best options may be (and they may be different for each of you!)

Hi slipsliding

Could you advise me why you think it is not personal debt?

Unless there is a partnership agreement or the properties are held via a Ltd company, then the exposure on these falls to you personally.

The loans/credit cards are personal debts. The properties, as they stand are not debts per se, but contingent debts. That means that if you fall behind with payments and they proceed to repossess and there is a shortfall, then the balance remaining is due and payable by whoever is named on the mortgage.

Hope this helps a bit.

Mark

Thanks Trust deed expert,Kevin and Mark for your replies.

Great help and information on this site,Thank you so much!

I dug out credit card agreements yesterday and as you advised, card accounts are either in my name with my wife as additional card holder or in her name and me as additional holder.
We will list them accordingly to see how much our liabilities are biased,I think my wife will have a bigger list and therefore a bigger slice of our debt.
Although i am concerned as we often have problems talking to card companies on the phone and have changed some of mine so my wife is able to talk to them because she looks after paperwork.Would that have made her the one more liable for debt also?
If we proceed to trust deed how will that affect our debt?
Also the flats loan/mortgage is a fixed overdraft and although is not a Ltd company but it is titled as;
.... both our names(a firm)....
This is probably why we have been told this is business debt.(this from a debt 'remedy' company that phoned us).
I spent yesterday on the phone trying to find a remortgage but most are only offering 65% Loan to Value (we don't have any money to make up the shortfall)and yesterday speaking to a property appraiser he thinks our flats will not have increased in value since last December
and values may have decreased in some places in Scotland.
I found several of the mortgage brokers we have used in previous years are now no longer in business.
Will we be required to hand the flats back to the lender if we go to a trust deed.
What happens if we are deemed a business and a trust deed doesnt apply,will we be forced into sequestration?
Worried.

Sounds like you have a partnership, slipsliding. It gets complicated as the partnership itself has a separate legal identity from you and your wife, however you would normally both be personally liable for the debts of the partnership. Essentially therefore it needs to be dealt with both as a business and on a personal basis - the specifics of how this would work depends on how the actual figures stack up really.

In answer to the other question about whether your wife would be liable for the cards where she deals with the companies on your behalf, no she wouldn't normally. She may have your authority to deal with them but that doesn't mean that she is liable.

Sorry this is a little vague - as I said, partnerships can get complicated so it is difficult to give specific advice in this kind of forum.

so we are a business?
who deals with us then?

Hi slipsliding,

A lot of firms (including Kevin and Mark's) that handle personal insolvency and debt also handle business insolvency and debt.

Given the complexity and seriousness of your situation I'd suggest that you contact one of them (or another similar firm of your choice) to review your situation in detail and help find a course of action for you and your business interests.

There should not be a charge for reviewing your options.

Hi slipsliding

Kevin is correct. Looking at the whole scenario, you could both sign Trust Deeds as indivuduals to deal with the personal debt. The main credit card holder is normally held liable for the debt and this won't normally pass to the additional card holder. This takes care of you both as individuals.

If the above were to happen and worse case scenario, the properties were to fall behind in mortgage repayments, then the mortgage companies could repossess and sell. If there were a shortfall, then the mortgage companies could puruse the partnership as a seperate legal entity and attempt to pursue you as individuals. However on a tactical front, in the Trust Deeds for the individuals, I would be tempted to include the mortgage companies as creditors, albeit secured. I suspect that this would then ultimately be a contingent debt and they would require to be creditors under the Trust Deed as opposed to having the power to go for bankruptcy.

It's an interesting technical point, so apologies if this appears complicated and confusing.

Please let me know if you need me to braek this down or expand on it.

Mark