Help relating to business credit/ dip in profit.

[vickytoria1985]

Hi all,
Myself an dmy partner have been in our IVA since creditors meeting 25th Feb.

When setting up the IVA we had a few problems as I am part time employed and part time self employed but less than 1 years accounts to prove my income.

Now... Included int he IVA are all our personal debts, bank loans, overdrafts, credit cards. However- on reading the self employment section on the site I think we may have had a mis-hap.

I have a business creditcard and business bank account - card £1000 owed, and bank recently slipped to -£80.

My business is not really going too well at all - making less and less each month, Summer months tend to show increase according to other similar traders, but no sign of that from my view!

My first question: Should my business credit card have been included int he IVA originally?

Second question: Should I be looking to replace my self employment with additonal hours at my job? OR get some extra hours and declare them as overtime? I guess the first would mean paying all of the additional money to IVA- where as technically the second would mean i kept 10% of my usual wage then 50/50 split?

While the second option seems financially better - I am not sure if there would be any point to 'flogging the dead horse' that would be my business. ( I am a sole trader originally pulling £340 profit a month - now around £50 per month - with no available finance for advertising etc.)

My way of thinking is that I need to make a decision NOW as for the last 2 months the original £340 income from self employment has been around £50 menaing that we technically cannot make our IVA payments in accordance with our budget! However - we seem to have done so ?????

Please advise as I want everything to be settled so I know where I stand for the next 5 years. I have had enough years of scraping together loose change to pay into bank accounts to cover direct debits, and adding up on a calculator in asda to make sure I dont go over £20 - I had hoped this would end when we started the IVA - but without the £340 from self employment we are heading back to that!

Vicky

[MelanieGiles]

Hi there and welcome to the forum

Yes - your business card and overdraft should have been included in the IVA. Did you disclose these debts to the IP acting for you? If not, you will need to disclose them now, and they can be included into the arrangement, but you will obviously lose the use of the facilities.

With regard to your employment, it would seem a more secure route to get more hours at your employed job if these are available. There does not seem to be much point in running a business if you are only generating £50 profit per month.

[vickytoria1985]

Hi, Thank you for your quick reply -
I had kept telling myself that things would pick up - but without advertising its obviously not going to happen. But i was nto sure what Creditors/IVA IP would think to me just throwing in the towel and taking another job/additional hours?

I asked about the business debt at the time of application, and was told they would be fine left out as I explained that I use the credit card for stock purchases every month as a new business I did not have really any money to make my first ever order of stock and pay for set up costs etc hence the credit card. I gues I may have been mis-informed?

Will i be in trouble when i tell IP about them? What may happen to my IVA? Am i in breech of it?

I am so worried that this is our last chance to solve things and so determined not to slip up and risk bankrupcy.

Also, my expenditure is going to increase a fair bit if I take more hours at work/another job - as I have a 1 year old who currently needs no childcare as I am at home all day - seeing my occasional customer - and work evenings when family are home.

Would it be enought that I am noticing that something needs to be done even if I am unable to create as much 'spare' money as I once did from self employment?

Like I said - I just really dont want this to fail - I know I can get the hours increased from 17 up to 30 in a flash and it would be a new contract too - so definately would get paid for them constantly- not just overtime as and when, I just dont know what the view of IP would be on then having to pay childcare?


Many thanks

Vicky

[David Mond]

Don't worry - your business debts can be included and you should inform your Supervisor (IP) accordingly. Anyway the costs of childcare will also be an allowable expense so don't worry and have a chat with your Supervisor.

[MelanieGiles]

It would have been fine to keep out the credit card, so long as the bank who provides the service were aware that you were entering into an IVA and the other creditors were also made aware of this as well.

If the option of additional hours is not viable, and the business cannot generate sufficient profit to sustain your IVA payments, then you should approach your IP to see if the IVA could be varied for you to pay a lower payment.

[vickytoria1985]

Thank you both for you advice, I intend to call my IP Monday to clear everything up regarding business credit and also to inform him of my intentions to cease trading as self employed and go full time at work.

Before I call I am going to work out approximate figures for my extra hours etc minus the cost of a reputable childcare provider and see how it compares to the original agreement.

Also - I have been told I will need to pay nursery fees 1 month upfront? If i dont get my increased wage until the end of month and my expenses for parking will go up is there any provision to allow for tjis?

Also, I have never worked in the day time before - but will need to wear offic wear - rather than my usual casuals - is there a way that you know of being allowed to purchase some essentials prior to starting work?

sorry for the million questions? I just dont knwo if i am being cheeky when I ask these things to my IP - I would rather know the potential answers before i even ask. HA HA

Vicky

[MelanieGiles]

You can ask about the clothing Vicky - and maybe this could be purchased by missing one month's payment.

[David Mond]

And also to cover for any upfront payment for child care if needed.

And it will be Tuesday you'll ring Vicky - bank holiday today.
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