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24 September 2014

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Programme 3 - Hiten Patel

Hiten Patel with mum Hansa and dad SureshName: Hiten Patel

Lives: London

Occupation: Self employed music mogul

Financial Situation: In debt to the tune of £113,500

Biggest Money Wasters: Ploughing all his time and capital into trying to make his music dream a reality

Watch Lawrence Gold's summary of Hiten's situation

Business dreams
Hiten set up his music studio just over a year ago and had been pouring all his money into it ever since. In the name of research Hiten was out at the clubs most evenings and would regularly spend over £1,000 per month on his “networking” nights.

Hiten had spent thousands on records in the belief that he would hit the right formula to make it big, but all he had to show for it was a record collection valued at up to £45,000 and a collection of Playboy magazines which cost him over £3,000.

Nine years ago Hiten had a near fatal car crash and since then mum Hansa and dad Suresh had been rather complacent with their big spending son. Hiten withdrew cash from their wallet more often than an ATM but the funds were drying up as Hansa had to quit work due to health problems.

The banks were also calling in their loans and Hiten found himself in debt by a staggering £113,500. In a last ditch attempt to get things back on track Suresh moved into the studio with his son and took over the finances for a week

Spend money to make money...
Hiten's answer was that he needed to borrow more money to get out of debt and that until he did that he wouldn't get himself out of the red. However, Bank of Mum & Dad's Lawrence Gold saw the dire state the business was in. Most worrying for Lawrence was that Hiten's business and personal debts had all merged into one and he showed no understanding of where his money was going. Hiten's outgoings were costing him around £2,700, minus most of his bills, yet his income was £0. This added up to an annual overspend of around £33,000.

Suresh decided enough was enough and straight away looked at ways to bring some money back into the business. The expensive record collection was earmarked for sale but Hiten couldn't bring himself to part with his vinyl.

Is Semtex the answer?
To try shock Hiten into action Bank of Mum & Dad organised a visit from one of his heroes, DJ Semtex, a successful hip hop producer and urban DJ, to give his opinion. Unfortunately for Hiten the verdict was a bad one, DJ Semtex said he would never recommend the studio to any of his artists and suggested the business was closed down. They're harsh words but Hiten still managed to dismiss his idol's advice by saying he just needed some more money to make it work.

It seemed Suresh was fighting a losing battle so Lawrence stepped in and set Hiten a slashed down budget. Of course you can't set a budget with no incomings so Lawrence worked out the studio needed to bring in £1,850 per month just for running costs. Add to this the debt repayments and living costs and Hiten needed to earn a further £800 per month. Even at this rate it would take Hiten 10 years to pay off just his bank loans and credit cards, not taking into consideration the money owing to family and friends. So the pressure was on for Hiten to get a job away from his music studio.

Update
Hiten has finally come to terms with his situation and has started working towards clearing his debts up. He has begun to sell some of his beloved vinyl collection; he has got himself a job selling boxing equipment and is working at music festivals on the weekends. He is doing his business accounts weekly and the car has been parked up temporarily whilst the bike gets a dust off as Hiten really starts to watch the pennies.

** Please note since the filming of this programme rules have changed regarding credit ratings. You are now no longer at risk of taking on someone's bad credit rating if they have lived in your house before you, or if they are listed as living at your address. **

Live Chat

Computer Find out what went on during our three live chats when we put your questions to our experts Lawrence Gold, Michael Brill and Lisa Colclough.

Expert Advice

FAQ Get your money questions answered in our Frequently Asked Questions section, or find out where to get more in depth advice.
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Series One

Andrew Barn Champagne lifestyles on a beer budget, wayward spending with increasing debts and the odd temper tantrum as mum and dad took control. It all happened during series one of Bank of Mum & Dad.
Find out more



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