IVA and Self Employed

SunshineBear

I have a creditors meeting set for 8th April. Having been on a DMP for too long my DMC recommended I apply. 26 years to repay my debts is too long, I'd be retired if I could afford a pension!

I'm self employed and owe £35k due to my bad management, depression and several major illnessess in the family over the past 10 years.

I don't bank with my creditors and currently dont have any OD or credit card debt on top of the above.

Have any Self Employed on here done IVA's? The main reason for not going bankrupt before now was the difficulty running a small business while bankrupt.

I'm trying not to be stressed, my repayment will be the same as my DMP but over in 5 years.

We can manage the repayments but it will be difficult to live without credit. Even on the DMP the banks throw credit cards and OD's at you. They refuse to lower our existing OD so will have to show self control and not use them.

Praying for good weather and no illness as I work outside and am the sole breadwinner.

Sorry to ramble, maybe more coherant as I post more and read more.

FoggyBrain_2

Best of luck with it all SunshineBear. Can't answer any queries re self employment, as my IVA is based on my PAYE income, although I have a self employment income too (for which HMRC became one of my creditors). IVA's were originally devised for the self employed, so should work out OK for you, once you have got used to the budget.

SunshineBear

Thanks for the reply FoggyBrain. I'm confident that I can live with my budget and have the scope to earn. What worries me is having 3 teenage children. I have banged on about saving money for so long I'm not sure anyone hears me now. Even though we have been on a DMP for 2 years my wife and I have still used the OD and cards, irrisponsible I know but I guess old habits die hard.

It all started with a fridge from Comet as well.

We were doing perfectly fine as newlyweds some 19 years ago. A couple of years in we needed a new fridge, went to comet with cash and was asked if we wanted 0% credit. "Not really" was my reply. Any way I was persuaded. The guy came back saying it had been refused. When I enquired later I was told it was due to NOT having any credit in the past rather than bad credit. A year later the car died. We went to look at second hand ones in a showroom knowing we wouldn't get credit. Low and behold we did, then the avalanch started. The banks couldn't stop.

Then with periods of illness for my OH we relied on it more and more. I suffered from depression didn't work as much and the banks gave me more credit. It's difficult to always do the right thing in the fog of depression!!

It came to a head 3 years ago and after conversations with my major creditor they put me through to a DMC. And so here we are now.

At my age I want to be 'grownup' and only spend what I have and feel we will struggle with it. Pathetic really!

Thats my story. Guess this is cathartic for me.

As the Hot Chocloate should have sang "It started with a fridge..."

SunshineBear

Just to add to that, we rent from the LA have a car worth less than £1k and have never taken a holiday abroad so don't really have anything to show for our years of missmanagement!!

FoggyBrain_2

I know exactly where you are coming from SunshineBear. If only they taught the habits you will learn whilst in an IVA in schools. To be honest, once you get into it, and it IS difficult adjusting at first, life gets simpler all round.

Foxy-Stoat_3

SunshineBear wrote: »

Just to add to that, we rent from the LA have a car worth less than £1k and have never taken a holiday abroad so don't really have anything to show for our years of missmanagement!!

Thats how a lot of people end up in huge debt, with very little to show for it. I'd wager that if you added up the interet you have paid over the 10+ years it would equal to 75% of your debt.

If someone told be that I would be in 5 figures worth of debt starting with a number higher than 5 by the time I was 30, I would of bought a 911 on credit years ago and left it in a garage until the IVA was done !!!!

I think with self employed peoples the IP would want to see your accounts each year, as with normal PAYE fold they want to see all your wage slips for the year.

If you keep your books in order each year, then you should have nothing to worry about.

SunshineBear

Thanks Foxy, I keep my books in good order and can account for every penny earnt and spent through the business. Shame the same isn't true of my personal accounts.

Am I meant to declare the 911 in the garage then??

Carosel_2

Hi SunshineBear
We're going through the IVA process at the moment - my husband is self employed and I'm in full time employment plus we have a new business which we run together. We had our options meeting yesterday and it was very informative and clear. My husband is an ostrich at heart and it is me who usually sorts financial stuff out so I've been in a right state over this!! Foggybrain and others on these forums have been marvellous with advice and support. I feel loads better about the process now - only waiting for our IVA proposals to be accepted by the creditors - hopefully (fingers crossed). Our advisor doesnt think there will be a problem - I see problems where there aren't any! Let people know how you get on - best wishes.

SunshineBear

Apparantly they dont like you having Life Ins!! I have been tod it will have to come out of household expenses or be disregarded in our out goings. Strange when you would have thought that in the event of my death they would normally get their money.

I say normally as my FA who set it up put it in trust so sadly they wont be able to draw on it if I die.

I went food shopping last night, (my OH is recovering from her 7th operation since we married) as i was walking around Aldi I felt guilty that I put a bottle of ale and some chocolate in the trolly.
Is this feeling of guilt normal? I thought I should do without such luxuries!

the_bright_side

I have just had my IVA agreed , and I am now self employed.

I have to supply wage slips including PAYE and Dividends every 3 months and supply books at year end. The only real issue is my PAYE and Dividends are forecast, if the company starts to earn more profit there is a clause that says that I have to give them 50% of any profit at year end but I can’t see how that can be enforced as surely the company has to keep some cash in the bank. Also I think the “Company” would probably invest in stock, land or classic cars before showing a retained profit J

SunshineBear

How much 'working capital' is allowed before it is classed as profit anyway?? Currently I have VERY little.
My accountant knows my situation so will have to ask him on my next visit.