Question about DRO for existing company director

Faldinio

Hi all,

I left work and started a limited company back in April 2012. Since then though, a major client has stopped trading and the work isn't coming as fast as I'd hoped, although it IS getting steadily better.

At this stage however my personal financial situation doesn't have such a rosy outlook, as I have been struggling to meet my own commitments. My company makes enough to cover its costs and then any remaining is paid to me, however the amount remaining isn't nearly enough and so I have been struggling. I do feel that it will get better as it has been doing so, but not in the very immediate future.

I was reading about IVAs and DROs.

My personal situation is this:

Unsecured debts of just under £12,000 to 4 creditors, comprising 2 credit cards, 2 overdrafts, a personal loan and then another debt to my previous employer who kindly wrote to me 6 months after leaving saying they'd overpaid me.

My monthly payments on the debts comes to around £400 and then I have other essentials such as car insurance, fuel etc.
Average monthly expenditure of around £500 yet I have been earning less than £200 a month for the past 4 months.

If I folded the company and tried to get a job, I would have more costs involved (for food, travel etc) and wouldn't earn nearly as much as I used to before leaving my previous job. I'd have to start again at the bottom of the ladder.

I realise that once in a DRO you cannot start a company, however can you remain as a director if you are the sole director and the company is your only source of income?

Would an IVA be better suited? Are there other options?

Any advice would be appreciated.

immoral_angeluk

You cannot b a company director or involved in the running of a company without leave of the court. Having had a case of this recently my experience of the DRO unit is that they will insist the company ceases trading and companies house informed or the DRO would be revoked.
Of course in some circumstances the OR may allow it to continue, but with DROs I'd suspect this to be few and far between. You can be a self employed sole trader with no issues, so long as you are not director of a LTD company.

immoral_angeluk

Also, if your earnings are very low for the past few months, have you considered checking your eligiblity for housing/council tax benefit and/or working tax credits?

Faldinio

That's what I thought after doing more research. I suppose I could become a sole trader, I wish I would have done that to start with to be honest... I'll need to check what implications that would have as well though. I don't think my customers would be that bothered but I will need to check everything else like HMRC and what hoops I need to jump through.

I'll look at working tax credits now - thanks.