I am posting this for my brother
Age: 32
not married
Annual gross income from employment or profession: 25,000
net income: 6,000 !
Type of employment: architect, one man practice
spending more than he earns
Rough estimate of value of home: 250K
Amount outstanding on your mortgage: 300K
What interest rate are you paying? 6%
Other borrowings – car loans/personal loans etc
10K overdraft
business has 25k overdraft and owes 25K VAT
Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?
Savings and investments: none
Do you have a pension scheme? no
Do you own any investment or other property? 100K in unmortgaged foreign property
Ages of children: 8
Life insurance: none
outgoings: car 200/month (needed for job)
What specific question do you have or what issues are of concern to you?
My brother is 3 months behind on his mortgage which is at 6% as it is subprime. It is interest only and he is in negative equity of 50K.
He owes 4.5K on his mortgage, 10K on overdraft and another 5k in unpaid bills so that's 20K personal debts
His company owes 50K to the bank and the revenue. He has been building up his practice for 4 years and it seems to be doing OK with good word of mouth and I know he is good at his job but it is loss making at this year and last year (he only expects about 25K gross income this year). His rent is double the market rate and he is locked in for the next 9 months.
I worry that his house will be repossessed soon or else the revenue will catch up with him or the banks will call in their overdrafts.
He lives a very frugal lifestyle, never wastes money on personal items and has tiny food bills.
What should he do?
Is it an option to shut the business and leave the revenue and bank short?
Obviously he should sell his investment property.
Age: 32
not married
Annual gross income from employment or profession: 25,000
net income: 6,000 !
Type of employment: architect, one man practice
spending more than he earns
Rough estimate of value of home: 250K
Amount outstanding on your mortgage: 300K
What interest rate are you paying? 6%
Other borrowings – car loans/personal loans etc
10K overdraft
business has 25k overdraft and owes 25K VAT
Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?
Savings and investments: none
Do you have a pension scheme? no
Do you own any investment or other property? 100K in unmortgaged foreign property
Ages of children: 8
Life insurance: none
outgoings: car 200/month (needed for job)
What specific question do you have or what issues are of concern to you?
My brother is 3 months behind on his mortgage which is at 6% as it is subprime. It is interest only and he is in negative equity of 50K.
He owes 4.5K on his mortgage, 10K on overdraft and another 5k in unpaid bills so that's 20K personal debts
His company owes 50K to the bank and the revenue. He has been building up his practice for 4 years and it seems to be doing OK with good word of mouth and I know he is good at his job but it is loss making at this year and last year (he only expects about 25K gross income this year). His rent is double the market rate and he is locked in for the next 9 months.
I worry that his house will be repossessed soon or else the revenue will catch up with him or the banks will call in their overdrafts.
He lives a very frugal lifestyle, never wastes money on personal items and has tiny food bills.
What should he do?
Is it an option to shut the business and leave the revenue and bank short?
Obviously he should sell his investment property.