Hi there Booboo and welcome to the forum
OK - you have taken the first step in recognising that living on credit cannot last forever and that you need to make some readjustments to your financial budgeting. The first step is to list out all of your income and expenditure to see how much is left to offer to your creditors. Is there anyway that you could improve your income by working more hours, or taking on more clients in an attempt to pay your way out of this situation, or do you really feel that you need a more formal solution? If the latter then be aware there are three options for you as follows:-
Bankruptcy proceedings
Individual Voluntary Arrangement
Debt Management Programme
If you do not own any assets of material value, then bankruptcy proceedings are an option for you to follow, but make sure that this will not affect your ability to run your business. I see that you just work on a part-time basis - is this from home or mobile? If so, I cannot see that this would be affected under bankruptcy proceedings, although if you have surplus income you may well be required to make ongoing payments to your Trustee for a maximum three year period. Your animals are unlikely to be affected in either scenario, but do try and keep their upkeep costs as low as possible. How much equity do you presently have in your property, as this will vest in the Trustee and you will either have to find someone to acquire the equity or face seeing your property sold.
In an IVA you make an offer of ongoing payments to your creditors, and will have to face a further equity release during the final year, and to be frank the creditors who will review your proposals will be a lot harsher than the Official Receiver with regard to allowances. An IVA is designed to be flexible over the five year period, but you must enter into it with the belief that you will be able to honour regular payments to your creditors, and this could be difficult to do if you have an erratic income. Perhaps it is now time to find more permanent employment.
A DMP works along similar lines to an IVA, except you will carry on paying until the debts have been discharged in full, and there is no legal protection from the actions of creditors who are also entitled to still charge interest on their debts. As you say your debts are quite high, it is unlikely that this is a sensible solution for you.
In any of these procedures you will need to open a new bank account, if your current account is with a bank to whom you owe money.
As you appear to have lots of questions, and there are some complexities with your case, I strongly recommend that you seek direct advice from an insolvency practitioner as soon as you can. This will cost nothing and you can explore all of the options more fully - but do continue to seek help from the forum members as well.
Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp
See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp
...It might seem a bit "pie in the sky" but I'm a single gal and wondered if I do get a 5 year IVA and meet mr right, what happens regarding joint income? Does the IVA become his concern regarding his own finances? What if I give up work to raise a child? What if I sell my home to buy another together would any "profit" have to go to creditors instead of a new property? Is there any change of getting a mortgage together if I have an IVA?
