Individual Voluntary Arrangements (IVAs) And the Self Employed
There are now as many as four million self employed people working in the UK. These people have the difficult task of trying to run both their business and personal finances at the same time. Often business and personal finances merge together and many self employed individuals find themselves experiencing from major debt problems.
If you are self employed and you are struggling with debt or cash flow problems then you should consider the options that are open to you. For all small businesses the basic initial options are the same. These are to find ways to cut business costs, seek out new revenue flows and to attempt to refinance or extend credit agreements. In situations where this is not possible then self employed people should look at some form of debt restructure.
One such debt restructure option obtainable in the UK is an individual voluntary arrangement. Individual voluntary arrangements (IVAs) were introduced specifically to help individuals and the self employed to restructure overwhelming debts without resorting to bankruptcy. An IVA will bring together all your debts and consolidate them so you make one regular monthly payment at a more affordable rate. This payment is made for a fixed period of time, usually five years, after which any remaining unpaid debt is written off.
For self employed people in debt the advantage of entering into an IVA agreement is that it will allow you to gain control of your finances, keep your business going and avoid the risk of bankruptcy. During the IVA you are protected from any legal action by your creditors to reclaim the money you owe and any interest being charged on the debt will be stopped.
To qualify for an IVA you will usually need to have meaningful debts of £15000 or more. If your debts are lower than this then you may instead want to consider a consolidation loan or a debt management plan.