New research shows that many self employed people are unable to repay their debts.

Companies are reporting that many of the self employed are not in a position to enter into a Debt Management Plan (DMP) and repay their debts as over half of callers had a negative surplus (the difference left over when deducting household expenditure from your income) and therefore no money to start repaying their debts.

DebtFC says that many of the self employed people contacting them are from the service industries such as hairdressing, building trade 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 woman who had contacted the DebtFC for help and advice with her debt problems because she had lost her job started a small cleaning company which allowed her to earn enough money to enter into a Debt Management Plan and start repaying her debts again.

The credit crunch has resulted in a lot of people 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.

Entering into a Debt Management Plan or Scottish Protected Trust Deed when you are self employed can often be complicated, depending if you are a sole trader or have a limited company or a partnership. It is important that anyone who is self employed and who is struggling financially should contact DebtFC on 0800 007 5307 or email info @debtfc.co.uk for free debt advice and help as soon as they realise they have a problem.