Half of self employed debtors unable to repay debts

The CCCS centre, which specialises in dealing with the personal finances of the self employed, has helped over six and a half thousand people this year.

However, only 1,600 were in a position to enter into a debt management plan (DMP) and repay their debts as over half of callers had a deficit budget and therefore no money to start repaying their debts.

This is very similar to 2009 when only nine percent of people calling the centre were in a position to enter a DMP and half of callers could only be recommended to increase their income.

CCCS says that a large proportion of those contacting the centre are from the service industries such as hairdressing, gardening and taxi driving. Providing services that people are likely to cut back on when tightening their belts, this category of self employed are particularly vulnerable in an economic downturn resulting in many being unable to repay their debts.

While many self employed are struggling with debt, ironically some people are finding self employment to be the solution to their personal debt problems. One man who had contacted the charity for help with debt problems because he had lost his job retrained as a plumber which allowed him to earn enough money to enter into a DMP and start repaying his debts again.

Geoff Waugh, head of the CCCS Self Employed Centre, comments:

"The economic difficulties of the past few years have meant that a lot of people are carrying out work that they would have previously paid other people to do. This has left many self employed people without work and unable to maintain their debt commitments.

"The personal finances of the self employed are often complicated, with little distinction between their personal and business finances. It is therefore particularly important that anyone self employed who is struggling financially should seek help as soon as they realise they have a problem. At the very least we can help with ensuring enough money is set aside for everyday living costs."