Self-employed face greater risk of bankruptcy

 

Singer and former EastEnders star Martine McCutcheon was this week declared bankrupt. The 36-year-old filed for insolvency at Kingston upon Thames County Court after being unable to meet debts of £187,000.

The bulk of the debt – some £149,000 – was owed to HM Revenue & Customs with another £30,000 owed to Lloyds Bank. The actress, whose last acting job was in Midsomer Murders, became the latest self-employed person to come a financial cropper because of not being up-to-date with red-tape and tax matters.

However, Ms McCutcheon is unlikely to be the last this year, a debt charity pointed out yesterday. "The self- employed are particularly vulnerable to debt problems as their personal finances are often tied up with their business finances," warned Una Farrell of the Step Change debt charity.

"This means it can be hard for them to realise that they have a personal debt problem before it is very serious and they are facing bankruptcy."

Money matters can end in disaster for the self-employed as they often resort to propping up their businesses with personal loans. That leaves them in serious personal financial difficulty if the business struggles or fails.

"It is therefore crucial that anyone who is self-employed and struggling financially, or even just worried about their finances, seeks professional advice on how to deal with their finances,"advised Ms Farrell.

StepChange offers a specialist free advice service for the self-employed.

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