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Zeldazog wrote: »

Oh dear, I've just spent about half an hour typing up a massive history and some questions, and I don't know what I've done wrong, but it's not here.

Not sure I have the energy to type it all again, so will try and cut it short.

Currently p/t employed as well as a self employed artist.

Single parent, not quite surviving on wages from job, plus WTC, CTC & CB. Also get most of rent and council tax covered. Son is 19, still at sixth form, hopes to start Uni in September. Plans on staying at home.

Been robbing Peter to pay Paul for a quite some time, but it's getting more difficult, recent spending seems to have gone up (8 months of year water rates kicked, fixed rate utilities come to an end (need to find new supplier, but only paying about £8 a month more than the cheapest since last month), VM gone up (need to negotiate) , UCAS and exam resit fees for son, food costs must have increased I think. House insurance due soon. Have credit/store card debt of around £7k I think.

Recently tried an annual budget, and averages an overspend of around £25 per week. This doesn't account for saving up for emergencies such as replacement fridge freezer (although does include budgeting for most things I think)

Do not pay myself a wage currently from the business. Up until very recently, it's never turned over enough to do this, any small profits have back into the business. It's been in survival mode as my son as been unwell for the last four years, when it had started to upturn. So he's been my priority, rather than building the business. Started with eye injury, four operations, whilst Mum in another hospital with cancer. Son developed depression, spent the best part of the last three years dealing with overdoses, self-harm and debilitating anxiety issues. He was in Camhs but got put into adult services last year.

I am an artist, and it's not a quick growth business. It can take time to get a reputation, and networking and trust to run workshops and get commissions.

I thought I was breaking even, although some months I have had to use the credit card to pay for the weekly shop.

In terms of the HMRC, the business has made a loss, but actually it pays for itself. Income from business covers it's own rent and overheads, petrol and some car costs. There is a credit card attached to the business current account (HSBC) with about £700 debt on it, monthly payments are covered by the business current account.

I realised a long time ago that I couldn't' maintain this situation, but was stupid enough to keep ignoring it.

I cannot carry on as it is; I got a tax rebate two months ago, £700, that's all but gone, and I haven't been frivolous.

In a few months time, not clear when, the the benefits will change - CB & CTC will stop, WTC will reduce, and allowed income for HB purposes will reduce as I become considered a single person with no dependents again soon. Not sure when this all happens, they made error on CB and said it was stopping in March, even though son was still in full time education. They amended it but didn't give me a new end date.

Recently done two reasonable projects and have a bit of money in the business account.

I haven't yet paid myself a wage from the business, and to be honest, even if I had been able to, it woldn't make a difference to my current situation because of the benefits. For every £10 extra I earn, I would lose £8.50 in HB/CTC and at some point, reduction in CTC/WTC would kick in too. So I would barely have any more money coming in anyway, and certainly not enough to make an impact on my debt issues without it being a seriously big jump.

To enable me to product more goods for sale, and also to run larger and more frequent workshops and therefore to increase the business income, I need to buy a bigger piece of equipment. I have about half the money for this at the moment. I also want to apply for HLF or ACE funding for research and development of the business. ACE requires 10% funding from the applicant, so if I have no money in my business account, I don't know if I would get the grant. The grant would enable me to pay myself a wage for the next year, develop new skills and products and have an exhibition, it would be invaluable to growing my business.

I have done the StepChange Debt Remedy online, and it suggested a DRO as the main option.

I am aware that this could have an impact on credit rating and as a sole trader, therefore also on my business, but I only actually have one credit account for business, which is a small infrequent spend which could be on proforma basis anyway.

About 3 years ago, my Mum lent me the cash to buy a (new to me) car - with the agreement that I could pay it back when I could afford it. She has also funded two Christmasses, which I owe her for. I haven't paid any of these back yet.


My concern was when I was reading the terms of a DRO, that it could be declined if I gave priority to one debt over another - if I paid my Mum back all the outstanding amount as a lump sum, could I fall foul to this? I have been paying at least minimum on all my creditors for all this time, without missing any payments.


Alternatively, and ideally, I'd like to not have to spend the money that is the business saver so that I can re-invest it in the business to buy the new equipment I need.

If I applied for a DRO, would I be required to use some or all of this amount to pay off a creditor or can that money be left alone as essential for business.


I am really worried about doing the wrong thing, I have tried so hard to repay these debts - they are nobody's fault but my own initially, I spent money on cards when I shouldn't have done (a couple of holidays, although in 19 years, me and my son have only had four, one of which was staying at a friends) - so I felt that it was somehow cheating if I applied for a debt solution previously. I am not trying to cheat the system, but this equipment is essential, as would the grant application (buying the equipment could be classed as my minimum 10% contribution to the project).

I have tried for so long to sort this out but I can't remember the last time I slept, if I am not worrying about my sons' mental health, I am fretting over the bank balance.

Please advise. Many thanks


(Sorry for such a long post, although it's not as bad as the last one!)