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Comments on your SOA:

Elec and gas - very,very high. Is there a reason for this? Are you paying off arrears? Read your meterto make sure you are paying the right amount each month, also check you are with the cheapest provider. Then work really hard to reduce useage - see www.lbym.co.uk for ideas.

Groceries - v.high for one person only. How much of this is petcare? You should be able to reduce your food, toiletries, cleaning stuff etc to at least £100 pcm without a problem. Again, see the lbym website for ideas.

You are missing:

Landline
Mobile
Internet
Car MOT
Car Parking
Ents/going out
Christmas/birthdays
Buildings/contents insurance
Life/pet insurance?
Clothes, haircuts
Savings for void periods with no lodger


I also assume that you are saving for your tax and have that under control?



Re. the payments to your creditors, you need to offer a pro rata amount. So you need to work out a fair proportion, based on the amounts outstanding, to offer each creditor. Let us know if you need help with the maths!

If you do this, your credit record will be tarnidhed even further, and I would doubt you could get a business loan. However, with £55k debt already, taking on another £30k seems madness at the moment. Take some time, get the debts sorted, then grow the business.

I agree with all of freda's comments. No-one will lend your 30k unsecured when you have that level of debt vs income.

How much is your house worth? How big is your mortgage?

manzanilla

Hi Sheallaidh,

Thinking about your business enterprise:

There is a specific board for people running their own business.
http://boards.fool.co.uk/Messages.asp?bid=51109

I've also found a link to a your local business club. This might be a useful (albeit with an annual subscription of £25). It looks like they do regular monthly meetings on lots of useful stuff on VAT, Finance, Marketing etc.

http://www.businessclub.uk.com/site%20pages/history.html

Also, your local authority has a section on business that might be worth a look through.

http://www.southribble.gov.uk/section.asp?catid=350

If you're under 30, the Princes Trust might be able to help with your business. The provide low interest loans, and sometimes grants.

http://83.138.128.154/Main%20Site%20v2/14-30%20and%20need%20help/start%20up%20in%20business.asp

Best of luck. Keep us posted

pete

Landline - Paid by the business.
Mobile - Paid by the business.
Internet - Paid by the business.
Car MOT - Last MOT was £25 - not one due for 11 months. Almost impossible to calculate this.
Car Parking - I don't park where I have to pay.
Ents/going out - I am not going out at all, with one exception that I will cover in a minute.
Christmas/birthdays - I can't afford to buy people presents at the moment.
Buildings/contents insurance - I don't have either.
Life/pet insurance? - I don't have either.
Clothes, haircuts - I don't buy any new clothes.
Savings for void periods with no lodger - A luxury I cannot afford. Besides, I have had the same lodger for the last 3 years and she is unlikely to be going anywhere soon.

[i]Elec and gas - very,very high. Is there a reason for this?[/i]
Yes, I am paying off arrears on the electric.

[i]Groceries - v.high for one person only.[/i]

My groceries amount is £50 per week - and this is what I consider my spending money. I divide it up between, food, toiletries, cigarettes, pet food, eating out (very rare), anything else that might cost me any money.

[i]I also assume that you are saving for your tax and have that under control?[/i]

Err... no. the taxman currently owes me £200, and I made a loss last financial year on the business so the taxman will actually owe me even moer money when i eventually get around to doing my tax return.

My house is worth somewhere between £125,000 and £140,000.

My mortgage balance is about £102,000 with a £1000 penalty if I change mortgage before July 2007.

Re. the payments to your creditors, you need to offer a pro rata amount.

Erm, it doesn't say that on the fool page about it... grrrr.

Okay so I will calculate it pro rata.

With £55k debt already, taking on another £30k seems madness at the moment.

I disagree on the grounds that I know how rapidly the business would grow if I could get this investment into it. I'd probably be out of debt in 12 months.

This is a revised table of offers based on pro-rata as you suggested... does this look right?

Account	CCJ?	Balance	Monthly Payment/Offer
AA Personal Loan*	No	"£12,500.00"	£169.28
Egg Credit Card	No	"£10,060.38"	£136.24
Royal Bank of Scotland Current Account Overdraft	No	"£9,000.00"	£121.88
Virgin Credit Card	No	"£5,834.95"	£79.01
Morgan Stanley Card	No	"£3,493.45"	£47.31
Citibank Credit Card	No	"£3,425.95"	£46.39
Royal Bank of Scotland Credit Card	No	"£3,193.87"	£43.25
Mint Credit Card	No	"£2,853.56"	£38.64
Black Horse Car Loan*	No	"£2,500.00"	£33.85
Hitatchi Capital  New Computer	No	"£1,532.64"	£20.75
HFC New Cooker	No	£650	£8.80
Totals		"£55,044.80"

Sheallaih,

One thing that hasn't yet been mentioned - If your account where your salary gets paid is with any of the creditors above, it would be a good idea to open a new basic account with a different bank so that your money doesn't get frozen or filched ... Co-op and Nationwide seem to be the favourites on the boards.

Good luck with sorting out your debt.

M x

Err... no. the taxman currently owes me £200, and I made a loss last financial year on the business so the taxman will actually owe me even moer money when i eventually get around to doing my tax return.

but in an earlier post (and your SOA) you say you are taking £400 a month out of the business - i'm not an expert on self employment but strongly expect that if your business is making that much profit you will be expected to pay tax on it somewhere along the line, and you really should try to be setting it to one side now.

I disagree on the grounds that I know how rapidly the business would grow if I could get this investment into it. I'd probably be out of debt in 12 months.


I don't mean to sound like a pessimist (although I am Scottish) but you don't "know", you have forecast. You may have based your forecast on perfectly reasonable assumptions and things may work out exactly as you planned, but then again they might not. In terms of personal finance, that's why Fools recommend that a budget should include an emergency fund. In terms of your business, you obviously can't put away that emergency fund from your personal money and you do not have room to manouver your way around business loans while you have so much personal debt.

BTW, I second Manzanilla's point about the tax. Unless you've worked out that the tax on your estimated earnings will be completely offset by what the taxman owes you then you need to start looking in to how you will pay this.

Well, I know I wont be due to pay any tax until financial year ending 2007 - and I have until January 2008 to send in my return, and I am fairly confident that I will be in a better position to pay it by then.

Well, I know I wont be due to pay any tax until financial year ending 2007 - and I have until January 2008 to send in my return, and I am fairly confident that I will be in a better position to pay it by then

Used saved up TAX money to pay down debt is very risky since it means future buisness HAS to be good.

You also seem to be running a business while claiming to be unable to work for your regular full time employer. Does your contract of employment have any "no work" or "must inform" clauses?

My employer has been aware of my business since shortly after it started (since they actively monitor all of their employee's eBay accounts).

I have had no choice in continuing with the part time business, for financial reasons - however the work is a lot less stressful and shorter hours than my job - and can be continued while my sleeping schedule is compeltely screwed - which it has been for some time.

Debt2GoGo:- I have opened a current account with alliance and leister and am in the process of transferring my direct debits and pay to this account.


With reference to the part time business:

In the last quarter I have made just under £4500 profit.

There is a rolling bank balance in the business... unlike my personal finances, I seem to be very good at controlling my business finances.

It is from this cash flow amount that I feel confident I can pay my tax when it comes due, if my personal side is not sorted in time.

I'm surprised that your employer is aware of this part-time business and happy about it. They have paid your salary for 6 months as you are too ill to work but in reality this has allowed you to pursue another part-time job so it shouldn't be a surprise that you're insisting you return to work. If part of the problem is stress then would they allow you to go back onto the out-of-hours call-out, which you seem to be relying on, as this is only more stress for you? They've obviously managed without you so far.

I do think that you are being too complacent with regards to the tax due on the business, you must make provision for this and put money aside for it regularly. The Inland Revenue are the worst people to owe money to and they do still make people bankrupt. Keeping money back for tax is not only sensible, its good business practice.

You've had some good advice from people on here with lots of experience and knowledge, please take the time to read it. You certainly cannot increase your borrowings now to fund the business.

Padders

They have paid your salary for 6 months as you are too ill to work but in reality this has allowed you to pursue another part-time job so it shouldn't be a surprise that you're insisting you return to work.

I have been doing my part time business for 12 months... being off ill had absolutely nothing to do with that, and I am not sure that it's fair of you to make those assumptions!

I am not sure I understand why the business loan is such a bad idea.

It will allow me to pay off these debts much, much faster than I would be able to otherwise.

Perhaps I have understated too much... I have 2 employees, as well as myself, I have around £20000 worth of stock, in an 1000 sq ft warehouse.

Technically I suppose it's a full time business.

Anyway, I already have lots, and lots of deals lined up for as soon as my brand launches (at the moment I am using generic packaging). More than 200 pet shops nationwide have agreed to stock my products, and I have a distributor in Northern Ireland who is already making regular large (and increasing) orders, and will put more effort into selling the product once the new brand is launched.

I already have the logos and designs made and the bags quoted and ready.

In addtion to making the product infinately more marketable, the packaging is actually reducing the cost of the product, as the discount for using my own packaging is more than the cost of the packaging itself.

The only thing stopping me from taking this step right now is the fact that I have to outlay for the packaging and a minimum order of stock.

Conservatively, I could probably do this for less than £10,000... which I should be able to save up in the next 6 months (at the current rate, not counting any growth).

I was hoping for a little more than the bare minimum in order to add a little for marketing, and to be able to give up work and afford to pay myself enough out of the business each month to cover my debt payments and comittments. This is not an unreaslistic goal, and I do not feel that the risk of doing this now, rather than waiting for 6 months, is very significant. I KNOW I can shift volume, I have the infrastructure and contacts in place to do it, as well as the drive to continue negotiaing deals and selling.

The main concern of mine is that the deals and customers I have set up, will go away if I cannot deliver within the next couple of months, which is why I really do not want to wait 6 months until I have saved enough up.

Does this make things any clearer, and does it change your advice in this matter at all, or is it still a bad idea?

This makes things a lot more complicated as we thought you were runnning a little part-time business from your spare bedroom or garage. Clearly its grown bigger than that. There are other more experienced business experts on here who will probably be able to help better but I would have thought a business loan would require collateral of some sort ie property. We're just trying to help you from over-reaching yourself financially both personally and business. There are lots of people on here who have had both successful and failed businesses and made mistakes like mixing their business and personal finances. Both sets of expenses/debts must be kept entirely separate.

I think you need to be quite careful here because your boss has obviously been very tolerant here but his goodwill won't go on for ever. A lot of bosses would not be so tolerant.

Padders

Whether or not you agree that a business loan is a bad idea, it is vanishingly unlikely that a bank is going to lend it to you because of the quantity of debts that you have.

If your business was in a limited company AND if the deals which you have lined up are in the shape of signed orders AND if you have taken sensible steps to protect your products (trademarks and urls rather than patents I would guess), then it is possible that you could secure funding but from private investors rather than a bank. And it would be on two big conditions: First it would be in exchange for equity, not as a loan. And you would be talking about more than 50% of the equity because no sensible investor would be prepared to leave you with a controlling stake in your business because of the mess of your personal finances. So this would mean giving away over half of the future profits that you will make.

The second condition would be that the money went into the business and stayed in the business. So the only income you would get from the business would be by way of taking dividends, which would mean that your investor also got cash at the same time. You would not be allowed to draw the sort of salary that would let you pay off your personal debts. Do you ever watch Dragon's Den? This sort of proposal would have the dragons rolling in the aisles with laughter.

But you are a sole trader and not a limited company. (BTW If your business really has the potential to grow a lot, this is a serious mistake. I know it costs a bit to set up a limited company, but it is a step that has to be taken if you want to employ people and have lots of contracts eg for warehouse space and manufacturing.)

It sounds like you have a great idea for a business. But that does not mean that you have much of an idea about how to run a business. (Sorry if this seems rude, but there isnt much point in not telling it how it is.) Re-read foolstop's post several times and print it out. You need to think of imaginative ways of developing your business, because you aint going to get a wonderful big loan.

So what can you do about improving your debt situation?

Well your SOA is going to improve. The electricity arrears will get paid off (when?). Your gym membership will be cancelled in January.

Why is your gas so high? I heat an 4 bed house with kids who generate immense amounts of wahing with football, rugby, hockey kit for less than that? Unless you are paying off arrears here, you should be able to save on this. Never do a wash unless it is full. turn down the thermostat on your central heating a couple of degrees and get used to wearing jumpers in the house.

My groceries amount is £50 per week - and this is what I consider my spending money. I divide it up between, food, toiletries, cigarettes, pet food, eating out (very rare), anything else that might cost me any money.

That is still a lot of money for someone who has a big ambition which could make her rich and let her do full time a job which she loves rather than one which causes her stress. Are you prepared to pout your future self ahead of your current one? You talked about selling stacks of stuff which sounds as though you are. But that also means cutting back hard on your spending money. Think supermarket own brand economy ranges, beans on toast, baked potatoes etc, no alcohol (that will help with making you feel better as well). Cut out the cigs (paying for a gym membership and smoking!!! I know which one has the biggest impact on your health, and it isnt the gym!). So aim to cut this £200 bu at least £50 a month.

I have not been given sufficient time to claim from my insurance to cover my salary (the processing time is 6-12 weeks)

er what insurance? This isnt mentioned on your SOA. Do you have PPI on any of the cards? If so, you should probably cancel it straight away - it is incredibly expensive, see http://boards.fool.co.uk/Message.asp?mid=9543922&sort=username. PPI will probably not pay out if you are off sick for any form of stress related reason. And it certainly wont if you are still running a business whilst you are sick.

Hitatchi Capital HP . . £1,532.64 . . . £68.96
HFC New Cooker HP . . . £650. . . . . . £27.00

Are these Hire Purchase debts, not loans? If so, you need to check the T&C. It depends how long you have had them, but you may be able to hand back the items and stop paying. You often cant make a reduced offer to HP contracts because they will just reposses the items concerned, sometimes still leaving you with a debt to be paid off. Check the T&Cs!

You have a new computer listed. First 1500 is an incredibly large amount to spend on a computer. Secondly, was this really for the business? Are you accounting for this properly? Are you VAT registered so you can claim back the VAT?

Your lodger - does the £400 include bills? If so, it is incredibly cheap. Could you raise it to £450?

I expect you thinbk a lot of these comments to save £10 here and £50 there are missing the big picture which is that your business is going to make you rich. But it wont if you dont look after the pennies!

manzanilla

Perhaps I have understated too much... I have 2 employees, as well as myself, I have around £20000 worth of stock, in an 1000 sq ft warehouse.

... so are you deducting tax and NI from your employees wages and passing it on to the Revenue ? You really CAN'T afford to be complacent about dealing with the taxman, especially as it now appears it could affect the lives of people other than yourself. As other posters have said they are one of the few people who can - and will - bankrupt you if you donlt pay what you owe them.

I am not sure I understand why the business loan is such a bad idea.

It will allow me to pay off these debts much, much faster than I would be able to otherwise.

Sound like you want to transfer the personal debt into the business.

Hmm... It sounded to me like Sheallaidh was planning to invest in the business, and so grow it faster, be able to draw more of an income, and be able to repay her personal debts faster.

Sheallaidh has also said, repeatedly, that they have kept their personal and business finances separate, and that the business finances are in pretty good condition. I know that, in the face of such large personal debt, many would be cautious (and rightly so). But if the business outlook is as sunny as suggested, taking on more business debt (not personal debt) could be the most effective way to raise the cash to clear both.

So it may be possible to get a £10K loan from your business bank to set up the new packaging. You would of course need to put the business case to the manager and convince them it was viable. This in itself is a reality check! But I can't see how trying to get a business loan and failing would put you in a worse position than you are currently in. I think it is reasonable to do the minimum now to change the packaging, then review in 6 months time with regard to marketing, giving up full-time work etc.

How about making Plan A and Plan B. Plan A is where you can get extra funding for the business - Plan B where you cannot. If the business case is as strong as you think, your bank will be happy to loan you the cash or extend your business overdraft. If the business case is not so strong, you won't be able to get the money up-front for the business, and you'll need to look again at all the suggestions other posters have made.

All the very best whatever you decide!
Maggie.

Hmm... It sounded to me like Sheallaidh was planning to invest in the business, and so grow it faster, be able to draw more of an income, and be able to repay her personal debts faster.

Sheallaidh was proposing £30k and investing £10k in packaging some on marketing and some to pay wages(before it was making the money) which is an indirect way of transfering the debt into the business especialy if the business loans have a long term.

Since the current business could raise the £10k in 6 months(thats whats been said) then all that is needed to accelerate the process is a £10k 6 month loan not £30k.

Having £20k tied up is stock is also an issue for what appears tobe primeraly a distribution business.

foolsstop - can we discuss that off the board? I have already given out more details about my business than I am comfortable with to be perfectly honest.

Manzanilla

I have just registered for VAT and as an employer, I was in the process of looking into going limited, but I was under the impression that it'd be easier to get a business loan as a sole trader. I would be willing to secure the buiness loan on my house... at the end of the day I beleive the risk is worth the potential reward. Looking at this lot right now, if I were to pay £800 a month towards it, it'd take over 7 years to pay off. To be frank, I would rather go bankrupt and lose my house, than be LBYM for the next 7 years.

This isnt mentioned on your SOA. Do you have PPI on any of the cards?

I have no PPI on any of my cards, I never take it out.

Are these Hire Purchase debts, not loans?

No they are loans to the best of my knowledge.


You have a new computer listed. First 1500 is an incredibly large amount to spend on a computer. Secondly, was this really for the business? Are you accounting for this properly? Are you VAT registered so you can claim back the VAT?

First: Not for this computer it isn't... if I had bought it froma manufacturer it'd cost over £3000.

Second: I use it for business, but no, the primary reason for the purchase was to play computer games on, which is my one hobby and passion.

I am not sure where I stated that I considered it a business expenense?

Your lodger - does the £400 include bills? If so, it is incredibly cheap. Could you raise it to £450?

My lodger pays £330 a month, and yes, this includes bills.

I do not understand why you consider this cheap? She doesn't rent a house from me... just a single room... and this is expensive compared to other rooms for rent in the local area.

I expect you thinbk a lot of these comments to save £10 here and £50 there are missing the big picture which is that your business is going to make you rich. But it wont if you dont look after the pennies!

No I don't think that, I am grateful for any and all advice, even if some of it sounds more like berating/judging than helping! :p

URRZZ

I wasn't at first, but I contact the Inalnd Revenue recently and registered as an employer - I also gave the correct start dates for both my staff, and if I have to backdate the Tax/NI I will.

I recently bought Sage Accounts and Sage Payroll to help me with this.

maggiethomas

Hmm... It sounded to me like Sheallaidh was planning to invest in the business, and so grow it faster, be able to draw more of an income, and be able to repay her personal debts faster.

Yes exaclty! Finally someone who gives me an ounce of credit!

How about making Plan A and Plan B. Plan A is where you can get extra funding for the business - Plan B where you cannot. If the business case is as strong as you think, your bank will be happy to loan you the cash or extend your business overdraft. If the business case is not so strong, you won't be able to get the money up-front for the business, and you'll need to look again at all the suggestions other posters have made.

Something I haven't mentioned.

My best friend is my business manager, and he's said that if I can put up 1/3 of the amount I am looking to invest, it will be a lot easier for the bank to say "yes".

My family are willing to temporarily loan me this 1/3 amount, in order to secure the loan, if I can.

At first my personal finances and my business finances were all mingled up, I spent a lot of time and effort to separate them earlier this year.

While they were mingled, I estimate that I invested probably £20K into the business.

Sheallaidh was proposing £30k and investing £10k in packaging some on marketing and some to pay wages(before it was making the money) which is an indirect way of transfering the debt into the business especialy if the business loans have a long term.

Since the current business could raise the £10k in 6 months(thats whats been said) then all that is needed to accelerate the process is a £10k 6 month loan not £30k.

The £30k figure was before I seriously thought about the bare minimum I would need.

Having thought about it some more I realise I need the following:

Around £7000 for stock (minimum order is one ton on self-packaged stock). I have a lot of lines, and this is the cost of the first stock order if I put only the 12 most popular products into my own packaging. I could further reduce this figure by choosing to only put, say, 7 of the most popular products into my own packaging.

The cost of packaging itself is incredibly cheap, in relative terms. the cost I had originally worked out included two different sizes of bags... however, on further consideration, there is no reason why I couldn't get only one size of bag (the smaller size) and reduce the current 15kg bags to 10kg bags. This would more or less halve the cost of the packaging - in fact, I could go for a slightly more expensive type of bag, which has a much smaller minimum quantity. Either way I can probably reduce the cost of one lot of packaging to about £3000.

Hang on let me do some calculations.... (long pause).

Right, having thought about it some more, at least 4 of the lines would be better left until spring... as they sell a lot faster then.

So, with the 8 most popular products that will continue to sell all winter, the intial cost of the stock in my own packaging will be £4352.70. This is enough to allow me to put it in the shops, but not so much that I run the risk of being stuck with stock I can't shift very fast.

The most important thing is to get the bags here... as soon as possible - once they are here I can get one ton of product here, and another ton there. In fact, if I had the bags I could probably put together enough sample bags to showcase the product in various places and get more orders.

So... for £7500 I could take a huge step forward.

I might not even need a loan for that amount.... I could probably risk taking it directly out of my cash-flow - or some of it at least.

Having £20k tied up ins stock is also an issue for what appears tobe primeraly a distribution business.

Why is this an issue? That's the equivalent of about 2.5 months at the current rate, but we are growing all the time!

Oh crap.

I just opened my mail.

Amongst other things, I read this:

Dear XXXXX,

Following some investigation and in accordance with the Disciplinary Policy and Procedure, I am writing to request that you attend a disciplinary meeting to be held on Tuesday 3rd October at 12pm in the Ground floor meeting room, a representative from UK HR and myself will be present at the meeting.

The purpose of the meeting is to discuss the following:

<LI>Your potential breach of Code of Business Conduct in relation to conducting outside employment during office hours</li>
<li>Your claiming company sick pay whilst conducting outside employment</li>
<li>Your potential breach of the Use of Corporate Assets Policy</li>
<li>Your breach of the Electronic Communications policy</li>
<li>Your breach of mutual trust and confidence</li>

As a result of the meeting a disciplinary sanction may be imposed, which may include termination of your employment.

Please note that you should bring to the meeting all company owned equipment, including your laptop computer and security pass. There is no requirement for you to attend the office prior to this meeting.


What the &^*% am i going to do now?

What the &^*% am i going to do now?

Don't panic there is not a lot you can do about it now.

You need to think carefully, our resident HR expert(mel, may be able to help but not sure if she is on-line try this board. http://boards.fool.co.uk/Messages.asp?bid=51373

I think you need to take each point in turn, and see if you have any grounds to challenge them.

Have you kept the company informed or not, ok they new about it but did YOU inform them or did they just find out.

If the company has a written IT policy and you have been using the computers to do stuff they will probably have records.

They almost cetainly have evidence of the working while sick.

My reading of this is they have decided to terminate your employment and it may be best to just go and hope they don't try to get any money back. You probably should get representation or be able to take someone to the meeting but Mel is the best person to advise on this.

If they do decide to terminate then you will need to gen up the benifit situation and be ready to send a new SOA to all your creditors to get them to freeze payments.



If you want to discuss some of the business stuff off board then I am fine with that. (just use the E-mail this reply to author at the bottom of the reply screen REMEMBER to untick post to the boards.

Oh dear, I was a bit worried something like this might happen. I'm not sure what you do now but I'm sure Manz or Freda or someone will have some practical advice. I'm also fairly sure that one of the regulars on here either currently works or has worked in HR so maybe they could help too. However, have you had any previous disciplinaries for any other offences?? If not then its probably going to be quite difficult for them to sack you (my boss always moans thats its really hard to get rid of anyone these days even if they are useless at their job).

Padders

I agree with foolstop's suggestions. Mel is the expert here.

FWIW I think you are going to be sacked. If you can possibly get away with resigning instead, that would be preferable in case you ever need a reference from them. Your aim must be to hope they dont decide to reclaim the sick pay. I assume you have sick notes from your doctor? You should also emphasise that although it is your business, you do not play a day to day roll and all the packing and distributing and whatever is done by your full time employees. You said that your employer was well aware of your business, I hope that is accurate.

I think you need to put on ice all decisions about loans for your business until you know what your work situation is.

Because you are going to be dismissed for misconduct, you will not be able to claim Job Seekers Allowance

manzanilla

You should also emphasise that although it is your business, you do not play a day to day roll and all the packing and distributing and whatever is done by your full time employees. You said that your employer was well aware of your business, I hope that is accurate.

This is entirely true!

Sheallaidh,

The letter you've received is very similar to the one my colleague received, and the disciplinary meeting lasted about four minutes; basically he went in, got the boot, and was escorted off the premises immediately. You have to assume the worst in this situation, and start planning for your exit now. If you know you are going to be sacked and can resign instead, grab that option; telling potential employers you were sacked from your last position is not good.

I think you do have options open to you, you could:

1. Work full-time on your business
2. Continue working part-time on your business and take another part- or full-time job to supplement your income.

Going with the business will be choosing the riskier path, but offers higher rewards. From your descriptions it sounds like quite a little goldmine.

Working part- or full-time will provide you with stability and predictability of income, which at the moment you do need in order to keep your head above water.

Just a couple of other thoughts:

unlike my personal finances, I seem to be very good at controlling my business finances

Managing your finances, whether in your personal life or in your business, is essentially the same thing. It's just applied in different arenas. If you can successfully control the money in/money out equation for your business, then you are certainly capable of doing the same thing for your personal finances.

I think you really need to do two things:

1. Think carefully about what your plan of action will be.
2. Work your plan - now! You don't have time to waste.

If you can run a successful business while also battling stress/depression then you've obviously got some talent - just think carefully, work hard, get support from fellow Fools, family, friends and your GP and you can get through this!

Good luck and all the best,
Derek

However, have you had any previous disciplinaries for any other offences??

I was verbally warned about 12 months ago for a small timekeeping issue... that's the only telling off I've had in three and a half years.

Because you are going to be dismissed for misconduct, you will not be able to claim Job Seekers Allowance

I don't think I would be able to claim anyway, due to the business.

From your descriptions it sounds like quite a little goldmine.

Well it is doing well, but to be fair and completely modest about it, it's no accident... I have worked my self sick getting it to work - and that's been as well as a full time job for most of the time.

I think you do have options open to you, you could:

1. Work full-time on your business
2. Continue working part-time on your business and take another part- or full-time job to supplement your income.

These are the same options I came up with. I think I have invested too much in the business to let if fail now due to my own stupid self. Did I mention that most of this debt is a direct result of a 15 month relationship I had with someone, who basically took me for everything he could get his grubby little hands on... all the while charming me and convincing me to spend more than I could afford to (mostly on him). I feel so stupid about that, I know it's my own fault, but... oh well this isn't a board about life history or social problems, so I wont go into details.

If you can run a successful business while also battling stress/depression then you've obviously got some talent - just think carefully, work hard, get support from fellow Fools, family, friends and your GP and you can get through this!

My family keep saying the same thing... it's hard to believe, I never take compliments well... but thank you, so much, this gives me encouragement.

Hi Shea,
The overall situation seems salvageable, and in the long run it could be a lot better than that *if* the business is so good. Sorry to sound so suspicious about ..... ahemm ... certain things!
Will post more tomorrow.
All the best, zeph

Both of my employees are part time and earn around about £400 per month. Even if I punt them both and take the money out it's still £400 short of my salary. I could probably cost cut a little and increase this... but the more I take out of the business, the less I can re-invest in it.

That £800pm is on top of the £10k profit and there is also the savings from the person who has been running the business while you were sick.

Some lateral thinking and I think you could possibly do this but try not to focus only on expanding you are in survival mode first another 6 months makes little difference if there is real chance of success.

Do you think the idea of selling my houes to family is a bad idea?

I don't see what it gains except a load of costs, if the family want to support you they would be better off cutting the costs of the other debt by just lending you the £20k at the same rate as the mortgage which is what they would be doing by buying the house off you.

I still think there may be room in the working capital to do this, since as I understand it, it is same products different packaging, so you only need to raise £3k for the branding of the main lines. I am sure you could do this by running down the stock levels. But this would need more information on the life cycle of the products, but 2.5 months stock is a lot I would be looking for ways to reduce this to release capital.

On the work front, reading the posts you are saying the work load of running the business and the full time job has contributed to the stress/sick so they could argue that if you had NOT been running the business you would have been ok. From what you have said It will be worth defending so you may be able to come away with a comprimise/layoff which could help.

On the debt front this still needs some thought but I guess everyone is distracted from this for the moment.

On the work front, reading the posts you are saying the work load of running the business and the full time job has contributed to the stress/sick so they could argue that if you had NOT been running the business you would have been ok. From what you have said It will be worth defending so you may be able to come away with a comprimise/layoff which could help.

Well, to be fair, the stress of all the debt was/is the primary contributing factor - please bear in mind that I am still not well, and I only got my doctor to agree to sign me fit for work on the grounds than not getting paid and a worsening financial situation would cause much more stress than going back to work.

To be honest though, work was easily the second most stressful thing - and a close second at that. They treat me like crap, repeatedly, for over three years. The final straw was when they told me I was being hired out to another part of the company, with no idea where it would be, or what I would be doing - and safe in the knowledge that I would have to work 5 days in the office (at the time I was working 1 day in the office and 4 from home).

On the debt front this still needs some thought but I guess everyone is distracted from this for the moment.

I think the situation hasn't changed much in this respect. The way I see it, I need to take enough out of the business to cover what EDS were paying me, so I can still make a reasonable offer to the creditors.

Perhaps I should take a little less, and see how it is responded to?