Help & advice for my self employed parents

WorriedAboutMyFolks

My parents have bravely asked for my help in getting them back in the black before their situation worsens.

They're both self employed in the retail industry but earnings are very poor so far this year and they're really struggling to make payments to all their creditors. Here's a rough SOA to get thigs started, I need some advice as to what to do about their credit cards as I think that's where a major part of their problems lie and because they make minimum payments they don't stand a chance of getting back in the black any time soon. I've just become debt free myself after a journey on here under another name so I know all the ways to cut budgets down etc but not sure how it will work since my folks are self employed, they've just been to the CAB who've said they can't help due to their employment status. Where should we start?!

Income:
Dad pension - £500 a month
Joint earnings - anything from about £150 - 1000 a month (depending on time of year and number of events they sell at)

Outgoings:
2nd mortgage - £500 a month
Gas & elec - £80
Water - £20
Council tax - £95
Phone/bband - £25
Mobile - £20 (business mobile)
Car/van insurance - £60
TV licence - £12
Payment protection - £26 (necessary when they took out 2nd mortgage)
Store card - £40
Credit card 1 - £113
Credit card 2 - £90
Food/household - £200 - 300

Debts:
1st mortgage - £4000 due now - endowment which fell short
2nd mortgage - £25000, 5 years left (will be paid off when Dad hits 65 yrs old)
Store card - £700, 16.9%, min payments made
Credit card 1 - £3500, 16.9%, min payments made
Credit card 2 - £4000, 20.9%, min payments made
Overdraft - £1000, as of a couple of days time they'll only be about £400 overdrawn.

Thanks in advance for any help you can offer. Apologies for the rough nature of the SOA, I just wondered if anyone had any suggestions for a starting point for us or if anyone had any experience of sorting out personal debts when self employed.

Cheers folks xx

cirrusmp

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dancingfairy

If you've been on here a while you should know about shopping around - make sure they have shopped around for the car/van insurance and all the household things eg gas/electric/ house insurance etc.
It might be worth going through a more thorough SOA with them if you can - to get a more accurate picture.
It appears that unless they get a good month they can't even meet their basic outgoings before paying any debts back which obviously isn't a sustainable situation.
They need to look at ways to bring more money in - can they take on a part time job/ evening/day/weekend job at all? Can they do any temporary work to fit in with their main job?
As business is so bad they need to look at either making a lot more from the business from branching out/trying to do more publicity etc and get more clients or perhaps one of them would have to consider a part time job or full time job and doing stuff on the business when they have spare time.
I'm sorry there are no easy answers - have they spoken to a business adviser - isn't there business link (or someone that gives free advice to small businesses?) - I think there might be a small business board on here as well for some ideas?

Good Luck
df

SouthCoast

Business Debtline may be able to help:

http://www.bdl.org.uk/

dancingfairy

Have they looked at their endowment being missold at all? I'm not sure on the time frames involved though? And like the OP said check they are not paying PPI as if they were both self-employed at the time it was taken out they would have likely been missold - I don't think it pays out for self -employed people. That's not the only reason they may have been missold though so have a read of Martin's Guide.
Do they have any bank charges they can claim back - they may qualify under the hardship ruling? worth a look?
Not sure whether they can apply for a better credit card? as those apr's seem quite high - maybe they can get another credit card with a good balance transfer rate and transfer the debts across - o.k it won't solve the underlying problem but might help in the short term.
df

dancingfairy

Can they get any help with benefits at all eg council tax or housing benefit or income support? I'm not sure how these work with self-employed people- might be worth looking into?
df

WorriedAboutMyFolks

Thanks everyone. They're about to put a claim in for bank charges although it's only recently they've occured, and they've already looked into their endowment and sadly it wasn't mis-sold.

I've just contacted the CCCS who've said they can help people who are self-employed so I'll give them a ring tonight when I go to see the folks.

My parents have apparently looked at getting a more steady job (shelf stacking sort of thing) but with no luck, I might suggest they try a bit harder to be honest as this would probably be the more sensible way to get out of the hole at least in the short term.

WorriedAboutMyFolks

Just looking at Business Debtline now, thanks for that tip ;-)