Can't sleep..

Debt_Free_Chick

You can't do it sweetie. And you should absolutely not beat yourself up - but you have more chance of passing a camel through the eye of a needle

On a serious note .... even if you had no debts, you would be accumulating debt every month as you don't earn enough to live on. Ignore the debts and look at your income, then your normal monthly bills. "Some of us" waste money on all sorts of expense that we could live without. But not you. There's actually not a lot of waste in your budget - there's certainly not £400 a month ..... that's £4,800 a year!!!

Even if you went bankrupt, that would deal with your current debts, but you'd be running up new ones. But you can't get credit when you're bankrupt, so you wouldn't be able to feed yourself. You wouldn't be able to turn on your PC to run your business :eek:

A business that only generates £4,800 a year (and we don't know if that's all profit ..... it almost certainly isn't) simply isn't worth the effort. Assuming you work a 40 hour week (and from what you say, you do more than that), you're earning only £2.60p per hour!!!!!!!!!!!!!!!!! But from what you say, you only turnover £400 a month, so your pay is even less!

Your boyf is no better - but at least he doesn't have the expense of running a business.

Do you want to give us a rough idea of what you do? We might be able to make some suggestions to earn more - although, I doubt we'll get you another £4-500 a month. And .... if we did ... it wouldn't deal with your debts.

How do you feel about bankruptcy?

Debt_Free_Chick

GeorgeUK wrote: »

Hi Shoozles

If you are only getting £400pm as an average income from your business, then i'm afraid this isn't sustainable. You may be able to come back to it at a later date, but as a business this isn't working. Is the £400 after tax or do you still need to deduct from this?

:j :j :j :T

I agree. It's before tax .... and it seems to be before expenses of running the business too. It appears to be turnover, not profit. And not profit after tax ... and NIC!

It may be worth going to a bank's small business advisor to see what they say - you may still be able to do this as a hobby, but please try to take a step back from this. You may find a more hospitable working environment than you were in before which won't make you ill.

Unfortunately, I can't agree with this. These days, a bank "business adviser" only looks to generate more income for the bank. They're mostly spotty-oiks who've never come close to running a business. They just want to sell you an overdraft, loan or credit card and Shoozles needs that like she needs a hole in the head. BusinessLink would be a better bet ....

Opening a seperate bank account with a bank you have no debts owed to is the first thing you should do though.

Not sure why, though As a sole trader, any bank account is just another personal account. It certainly won't make any debts "business debts". If you're a sole trader then all debts are personal. Have I missed something?

Edit: Just realised that I missed a post. If you're suggesting that Shoozles open another account to prepare for bankruptcy, then "yes" I agree. Although it's not a priority at the moment. Even when bankrupt, Shoozles can open a basic account.

Debt_Free_Chick

Shoozles wrote: »

Ok, thank you. Just one more question then I'm off to the job centre.
I need to open a new bank account. When the bank ask why I am opening a new account what do I say?!

Why do you need a new bank account?

Ames

She needs a new account because if she owes money to her bank or any of it's affiliates they can take any money she has, leaving her with nothing for essential expenditure. It's got nothing to do with business vs personal, just her vs bank.

Shoozles

Both payplan and the other company told me to open a new account.
It's because my overdraft is now over the limit and the bank have defaulted me, they can take any of the income straight to pay my debts. I have my business bank account, my personal bank account, and one credit card all with Lloyds. Apparently it is recommended to open a new account with a bank that you have no debt with.

I've just cancelled all the direct debits from my personal account. They were pointless anyway as they always get refused. I need to get a new account, a job, and then set them up again.

gymfiend

Hey Shoozles,
Just mooching the boards and came accross your posts and thought I would chip in with my story. August 07 I bought a house with my OH...I didn't like sharing his house which he paid for and I felt like things would only work financially if things were completely split in that we both owned the house.
So straight out of uni I took on an awful job in a call centre in order to get my mortgage, got that and moved into our shiny new house. December 07 I decided I couldn't cope with the job as I was seriously depressed and hated it, so started my business on eBay. Unfortunately it didn't make me enough money in those start up months, so May 08 I was back looking at temping work. And it's the best thing that ever happened to me.
Not only did I find a job that I love and am still in now, I found that I could make the money I needed to cover all my bills as well as making some cash on the side to cover buying more stock etc so I could grow my business.
So absolutely don't give up on your business is all I wanted to say, take on some temping work as a way of funding both your life and hopefully putting a little toward growing your business each month. Though you may not have as much time for your business, you would find the time you do have more enjoyable and stress free as it's not your sole source of income.
I hope it re-assures you a little & you realise that you can work & have your business to, as it's making some profit it's suceeding in a way xxx

GeorgeUK

Thanks Debt_Free_Chick - my comment about going to the bank was to get advice on the business. Forgot for a sec that it's all about sales and not the customer.

Thanks Ames - that was why i mentioned the new bank account. Got to make sure any income is protected.

Good luck Shoozles. With your work ethic i'm sure you'll succeed. It may take a little time but we'll be here rooting for you and will offer as much advice and support as possible.

Shoozles

thank you so much everyone.

Well I've been out and handed in an application form for a job, and opened a new bank account. I managed to do this online and I was accepted, and I've applied for a new business bank account too, which I have to wait to hear on.

Now it's nearly 3pm and I haven't done any 'real' work, so I'd better get on with it or I will lose customers at this rate..

lauzjp

oh Shoozles, I'm really sorry to hear that you are in such a pickle.

try contacting your local Citizen's Advice as well as CCCS - who can still advise you with a plan of action.

Debt_Free_Chick

gymfiend wrote: »

I hope it re-assures you a little & you realise that you can work & have your business to, as it's making some profit it's suceeding in a way xxx

One of the great things about this Board is its ability to support, nuture and encourage those in dire straits. One of its annoying traits is that it tends to be "too nice" and not to acknowledge that things are, sometimes, completely untenable.

The OP's situation is that her bills (ignoring debt repayments) fall short of her income by £400.

She runs a business .... but she has no idea if she makes a profit. She has no idea of the business's expenses. She doesn't keep even a basic "income & expenditure" account let alone a P&L.

How on earth can you state that "you realise that you can work & have your business to, as it's making some profit ..."? A business that ain't making any profit is NOT a business - it's a hobby and an expensive one, at that. It COSTS money - it doesn't contribute income.

IMHO it is grossly irresponsible to encourage someone in debt to keep on with an unprofitable business, whilst they struggle to earn enough to live.

Perhaps I've misunderstood - if I have, then do, please, clarify your comments. The OP earns the equivalent of £2.60 an hour - LESS THAN THE MINIMUM WAGE!!!!!!!!!!!!!!

How - exactly - is that a success?

Encouraging the OP to "keep going" is not at all helpful, financially.

By all means be supportive .... but let's make sure that the OP can put food on the table to give her the energy to plough her time into something that doesn't earn her a living, eh?