Applying for a Self-Employed IVA

A self-employed IVA will put an end to the worries you have about being in business debt. While you repay an affordable amount every month, you can continue to trade – and at the end of the arrangement (usually five to six years), your creditors will write off the remaining unsecured debt.
It’s a fresh start for you and your business.

When you apply for a self-employed IVA, this is what you can expect:

We’ll go through your business debts and personal situation, including your income, expenditure, assets and creditors, via either phone call or email conversation. We’ll then establish a forecast for the next twelve months and your IP will then draw up a proposal.
This proposal will then be presented to your creditors, showing that your business is viable and your IVA is likely to succeed.
Within two to three weeks, your creditors will decide whether to accept your IVA (the vast majority of IVA cases we put forward to creditors are accepted). If they accept it, you are protected from creditors taking legal action to chase you for your debts, while still being able to continue trading.

If the proposal is not approved or you change your mind, then our team can help you find another way to deal with your debts.

After the first twelve months, your Insolvency Practitioner (IP) will review the progress of your IVA with you and check whether you have had any change in circumstances that affect your payments. This type of review will happen every twelve months. You and your creditors will also receive an annual report as a record of how your IVA has been running.
Shortly before it comes to an end, we will review your arrangement to make sure you’re on track to complete your IVA on the expected date.
After 60 months, (this could be longer in certain cases), your final payments will be made to your creditors and your IP will confirm that your arrangement has been fulfilled. Your IVA will be removed you’re your credit file six years after the date from which you started it, meaning that it’ll improve once the IVA has finished.

Need to know more? You can find answers to some of the questions we’re frequently asked about self-employed IVAs.
Remember, your IP will be there to support you throughout the duration of your arrangement, so feel free to get in touch at any stage.
Good luck!

FAQs

How would a tax rebate be treated in a Self-Employed IVA?

If you’re due a tax rebate for either a tax year prior to the approval of your Self-Employed IVA, or for the tax year in which your Self-Employed IVA was approved, HMRC will – in many cases – either send the rebate directly to your Supervisor or offset it against the outstanding balance on your HMRC account.

What if I lease my business premises?

You may still be able to trade from leased premises if you enter a Self-Employed IVA.

However, there are a couple of things you’ll need to do:

Read the lease agreement carefully. In some cases, the lease may state that it’ll be terminated if you enter an IVA or bankruptcy. If your lease does state this, discuss your financial situation with the landlord of the property, and ask whether they’ll actually use their right to terminate the lease if you enter a Self-Employed IVA. If they agree not to terminate the lease, it’s important to get confirmation of this in writing.
Check that you aren’t in arrears with payments under the lease agreement, as this could result in the landlord not allowing you to keep the property.

There will be an allowance in your cashflow to make your lease payments when they fall due – plus repayment of any arrears – so the landlord can see that you intend to keep up with your payments.

Even if the above termination clause is in your lease agreement, the fact that you’re taking action to deal with your debts may convince the landlord to ignore this and allow you to continue trading from the premises.

What if I can’t afford payments?

Payments can be adjusted monthly based on your business cashflow. If you struggle, contact your Supervisor as soon as possible as they may be able to arrange a payment break or reduction.

What is the Insolvency Register?

Your name will be listed on this public register during your and for three months after your IVA completion, but it’s primarily accessed by creditors and lenders.

How does the IVA affect my credit rating?

Your IVA will stay on your credit file for six years, affecting your ability to borrow. After completion, it will be marked as complete on your file.