I’m self employed but need help with my debts. What can I do?
May 28, 2013
Earlier this year, former Eastenders actress Martine McCutcheon became the latest self employed person to declare bankruptcy, after failing to ensure her financial affairs were up to date. McCutcheon declared herself bankrupt at Kingston County Court back in February, with debts of around £187,000.
Commenting on the news, Una Farrell from debt charity Step Change, warned that the self employed could be at a greater risk of bankruptcy than most. She said: “The self-employed are particularly vulnerable to debt problems as their personal finances are often tied up with their business finances. This means it can be hard for them to realise that they have a personal debt problem before it’s very serious and they are facing bankruptcy.”
With an increase in redundancies as a result of the recent economic crisis, many people have turned to self-employment in order to try and make ends meet. For many, the financial constraints of running a business have led to personal borrowing, which can be extremely damaging when meeting repayments becomes a struggle.
Borrowing money through personal loans and credit cards to support your business is tempting if things become tight, but it’s important to always keep your personal and business finances completely separate.
However, if you’re already in a position where you need debt help, our debt experts at Scotland Debt Solutions are always on hand to discuss your financial concerns and help you find a suitable solution, such as a debt management plan to manage a more realistic repayment of your debt.
Often, debt management plans are only suitable if you have a stable monthly income, such as a monthly wage. For the self-employed, this could be an immediate stumbling block. However, it may still be possible, providing you can deliver evidence of a regular monthly income from your business revenue.
As well as advantages, there are also disadvantages to all debt solutions, all of which should be discussed with an experienced financial adviser before making a final decision. For example, a debt management plan can affect your credit rating, which is something to consider if you often rely on extra credit to fund your business. On the other hand, if you’re already struggling to meet payment deadlines, it’s possible your credit rating has already been damaged.
Debt solutions are often complicated and it’s always helpful to receive a professional adviser’s perspective on what’s best for you. Why not call us at Scotland Debt Solutions today and our impartial, knowledgeable experts can discuss your situation and assist you in taking the first steps to fixing your finances.
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