IVA for the self employed

Emmzi

Ok..from the figures you give, you are drawing £1500 per month from the business as your salary, and presumably this is supported by the profits you are making, and cashflow available.

The business has no debts other than your personal ones? i.e. tax up to date, VAT in order, etc?

At the moment, you have £905 listed as outgoings - but nothing for food, social life, TV licence, etc in. Can you look at some of the other soas and get it a bit more accurate?

Guessing at £200 for everything else, you have a surplus of £395 (raising to 795 in Jan?). But you need £700 now?.

£395 should be enough to get a DMP up and running, soitmay bedownto
-your preference
-what the creditors will accept

I would visit https://www.payplan.co.uk tolookat the differences between IVA and DMP, and come back with your thoughts :-)

mike1976_2

Cheers Emzi

The £1500 is what i clear after costs and tax on profits (vat and corp). the 1900 would also be after costs and taxes.

ok, so if I add in £10 for tv licence. I have sky at £40. Food would be c.£100.

Are you allowed a social fund as such? Holidays? Drinking? or are these seen as non-essential and do not count.

I had an initial chat with payplan but not the details i have given here.

Would a dmp go ahead on that amount if paying say £300 a month? I know that would take 10 years.

Would I have to pay more into that if income increased? Would it stop me from using surplus cash to expand the business?

Emmzi

DMP could go ahead on that. On DMP you repay all debt, but some interest etc is frozen; so repaying more gets you clear quicker.

You can have a reasonable social fund - you still have to live.

You could expand the business. If I were your advisor I'd want certified accounts to show that's where the money went, though!

Still floored at amount on cards - surely costing you a bomb ininterest??

HAve you asked about a business loan for the business part of it? (Can you isolate which part that is?) Would bring interest rate down and be able to offset interest against tax...

mike1976_2

Thanks for the reply Emmzi. Answering debt problems at 6:30am. That is dedication for you! :beer:

The business is fine. Those debts are purely personal debts:

- £4k from loan which I took out in 2004
- £5k before I left my last job
- £20k in the 18 months since which is for living expenses.

Excellent news about the social fund. How much could I put down for that?

With a DMP how often do I stay in touch with an advisor?

Emmzi

http://www.nationaldebtline.co.uk/england_wales/pdf/self_help_pack/workingout_pbs.pdf

has suggested figures for 'housekeeping' which is a catch all.

DMPs have a minimum annual review, but if you have a change of circumstances, you can ask at any time.

mike1976_2

Thanks again for the reply Emmzi. How do you know all of this? Have you been in a similar situation?

I have called Payplan to have an initial chat about the DMP.

Emmzi

No, I just read the boards a lot! But when I was made redundant I wish i *had* known about DMPs.. would have relived a lot of stress! so I have read up so I won't be as insanely tense at the end of my contracts in future!

I know a bit about business finance 'cos I was a bank manager on the old days (when managers actually got to make decisions, not just repeat 'computer says no..')

If you can track down 'wondergirl' on the boards, she works for CCCS and has a wealth of experience in these areas.

mike1976_2

Thank you Emmzi

How do I track that Wondergirl down? You sound a Wondergirl to me for answering my questions and taking a bit of strain off.

What did you do instead? Iva?

Emmzi

No, I fluked a well paid job. I thought I'd be in a real bind but as it turns out I was only jobless for 2 weeks. Not my dream job - lots of travel, but it's let me pay off all but one loan. I've got savings to pay off the last one as soon as I get my next contract - and then it's onto the mortgage.

I had to cut right back on my spending - probably as well, no room for any more dvds! - and I did some ebaying of rubbish I'd bought for treats. also no foriegn holidays - tent for me! - and more meals in with mates than big beer nights.

You can search the members to find wondergirl, or just post a thread with her name in the title and I'm sure she'll reply!

mike1976_2

Thanks Emmzi

I have c.£10k in the bank at the mo. This is made up of what I borrowed on cards and profits from last year. So I don't need to rush into just yet. That should keep me going til November time.

I just want to know my options at this stage.