Can the Self Employed do an IVA?
Yes - You can do an IVA if you are a 'Sole Trader'.
The pressures of self-employment
Being self employed is one of the most rewarding experiences a person can have.
There's nothing quite as rewarding as establishing a profitable business and facing up to the day to day challenges of making it a success.
But the financial pressure that comes with being self employed can be extreme and, when circumstances conspire against you, it can be all too easy to find yourself facing a financial black hole of debt.
Cash flow is incredibly important to any size business, but never more so than to the self employed sole trader.
So, when trade slows and turnover is down, the financial pressure increases. As every self employed person knows, the business expenses still need to be met, irrespective of trading conditions and it's down to the trader to keep everything covered.
Business debts and personal debts
In truth, a sole trader's business debts are also their 'personal' debts because, in the eyes of the law, they are one and the same thing.
So any credit facilities being used by the business, such as overdrafts, credit cards or loans are actually debts of the individual.
So how could an IVA help you if you are self employed, running a small business and struggling to maintain your debt?
Getting help through an IVA
Well, an IVA will be able relieve you of the financial burden of your debt, whilst enabling you to continue trading where other solutions may not.
IVAs are designed to assist people experiencing serious financial problems and the self-employed are no different.
Creditor approval
Seeking creditor approval is usually very straightforward and success rates are very similar to IVAs proposed by employed people.
Creditors will allow a business to continue trading, so long as it's still a viable business. After all, they stand to benefit most because an IVA will recover more debt than bankruptcy.
But to ensure the business still has the strength to succeed, a cash flow forecast will usually be required.
Self-employed IVA summary
An IVA provides a sole trader with the ideal opportunity to reach a new agreement with their creditors that enables them to continue trading whilst protecting their business.
A new 'affordable' repayment is agreed and set to run for a predetermined term of normally 5 years.
The new agreement replaces all existing contractual obligations to the trader's unsecured debts, including business loans and overdraft charges.
On completion, the trader is considered debt free with all outstanding debts being legally written off by the IVA.
Whilst the IVA is in force, the creditors must freeze interest on the debt and cannot take any legal action to recover the debt.
Would you like our help?
So, if you're self employed and struggling to maintain your monthly contractual commitments, then an IVA might be the solution you have been looking for.
For a confidential chat about how an IVA might be able to help call IVA.info on 0800 088 7502.
Or complete this form and we'll contact you at your preferred time.
