DRO - Unusual Circumstances

salmonfish1

I have quite a unique self employed situation where almost all of my work is done "on the road" as a content creator. I get paid for creating marketing content for products which I shoot in outdoor environments. My business and living costs vary a lot from month to month.

My finances have become worse and worse over the course of around 1 year and I'm now missing payments on my credit card and overdrafts (one credit card send to debt collector now).

At the moment the majority of my outgoings are business costs incurred while working abroad. It's left me with almost no actual personal income but I've been able to sustain myself on work costs. I haven't been able to pay my rent while away and have been told that I'm not allowed back to my previous accommodation (parents house) as they are sick of my ability of being able to pay being affected by my cash flow (often not being able to pay). So now I'm faced with homelessness.

I have learned a bit about about the various options available to me and it's looking like a DRO may be best. It's a very daunting thing and the thought that I'm not doing it legitimately (or may be seen not to) terrifies me.

In the financial difficulty I am facing many things about my business have been adversely affected (investment in equipment and website development etc.) and that affects my ability to earn.

One of the things I'm wondering, is if I enter into a DRO and my business costs reduce (there are less location shoots in winter), would it be okay to invest that difference into the business to sort out my website and replace broken equipment, without it seeming like I'm just spending money unnessesarily?

I'm not a ltd company and all of my business and personal finances are managed from the same account.

It's all really complicated and I may have missed some vital information as i'm feeling quite panicked atm, but can provide as much clarity as is needed on anything.

I really appreciate it if you've made it this far in my post, thank you.

Grumpelstiltskin

So you are a self employed sole trader?

You need to separate your business and personal finances.

Is your business viable in the long term?

If not you have to seriously consider closing it and sign unemployed if you can't get a job.

It's time to sit down and work out the way forward.

salmonfish1

Yes I'm a self employed sole trader.

Sitting down and working out the way forward is what I'm trying to do now. Getting straight with my finances is a priority part of that. I will have two separate accounts soon to manage business and personal finances. At the moment I can go through my statements manually and mark which is which.

My business definitely is viable long term but will require some investment in web services and some equipment to keep it so.

Grumpelstiltskin

If your business needs investment and you can't afford it you have to decide how you are going to progress, or if you can progress or do you have to call time on it for now.

salmonfish1

Do you know if it's okay to invest money in my business while going through a DRO?

sourcrates

salmonfish1 said:

Do you know if it's okay to invest money in my business while going through a DRO?

There is a £75 monthly disposable income limit for a DRO, if you have more than that left after all essential bills are paid, you will not qualify for a DRO.

You are allowed up to £2000 in assets, and a car up to the same value.

You must operate within those parameters for 12 months.

salmonfish1

thank you Sourcrates . I think I'm getting a bit confused because I don't have a separate ltd business that pays me a specific wage at the moment. I have essential business costs that I need to cover in order to sustain my business, including paying subcontractors, SEO and web advertising and equipment replacement. Am I okay to pay these essential business costs, and then "pay" myself what is left after that, and that pay be what I work out my disposable income from?

Grumpelstiltskin

I think you need to get in touch with Business Debtline to see if they can help you.

Business debt advice | Free debt help | Business Debtline | Business Debtline

salmonfish1

thanks Grumplestiltskin