I’m self employed – Is an IVA right for me?
Declaring yourself bankrupt while running your own business is often viewed as the final straw for most businesses, and for good reason as the financial consequences can be near impossible to recover from. Unfortunately, bankruptcy is the only option for some people due to their individual circumstances but if you’re struggling with debt and you can still afford to make reduced payments to your creditors then entering into an IVA could be the lifeline you need.
As a self-employed business owner entering into an IVA means you will only pay your creditors what you can realistically afford each month and they won’t contact you for any further payments for the duration of the agreement which is normally 5 years during which time any interest and charges are frozen. Your only obligations during this period are to maintain your single agreed monthly repayment and to inform your insolvency practitioner should your financial circumstances change.
During this time you will normally be able to continue utilizing credit agreements with your suppliers and your business should not suffer from any effects of the IVA, your details will be placed on the IVA register. Your insolvency practitioner will be able to give you further advice on the implications of this.
At the conclusion of the agreement, any remaining debt will be written off meaning you will be debt free and in a position to start to obtain credit and build up your credit rating. Once the IVA has concluded and you have made all of your agreed payments your creditors will not contact you again regardless of how well you and your business progress.
The majority of self-employed workers who complete a tax return and have debts they are struggling to pay to amount to over £7000 owed to two or more creditors could be eligible to benefit from an IVA. This often gives small business owners the breathing space they need to develop their operations without the financial constraint they have been burdened with and continue to reach their potential.
No matter how big or small your business is- before you throw in the towel there may be alternatives and entering into an IVA is certainly one of them that you should explore by contacting us today!