Self-employed IVA

A self-employed IVA (Individual Voluntary Arrangement) is a legally binding agreement between you and your creditors that helps you avoid bankruptcy while repaying a portion of your debts over a set period – usually five to six years. If you keep up with your agreed repayment schedule, any remaining unsecured debt will be written off at the end of the IVA term.

For self-employed individuals, this type of arrangement offers a practical alternative to bankruptcy. It enables you to continue trading without the restrictions bankruptcy can impose, allowing you to retain essential business assets, like tools, equipment and stock.

You’ll make one affordable monthly payment to an Insolvency Practitioner (IP) who will distribute the funds to your creditors. This means no more interest, no more threats of legal action and no more letters or calls chasing payments.

Throughout the IVA, your personal and business debts will be covered under the same arrangement, and your essential living costs – like food, housing and family needs – will still be accounted for. The goal is to help you regain control while keeping your household and business running.

Get advice now

How do I apply for a self-employed IVA?

Your IP will work with you to prepare a forward-looking cashflow forecast for your business, usually covering the next 12 months. This helps to demonstrate that your business is viable and capable of generating enough income to support a regular, reduced repayment plan.

From this, your monthly income (after tax and business expenses) will be used to calculate what you can afford to contribute to your IVA after covering your personal living costs. IVA payments for the self-employed can often be tailored to reflect fluctuations in income. For instance, if your business is seasonal – like gardening or tourism – your payments can flex month-to-month, if the overall annual amount agreed is paid.

Advantages of a self-employed IVA

• You can continue trading and using suppliers and business credit.
• Essential business assets such as stock, machinery and tools are protected.
• Payments can be structured around your cashflow.
• Interest and charges on your debts are frozen.
• You’ll make one manageable monthly payment.
• Set-up and management fees are included in your payment.
• Legal action from your creditors is halted.
• Your home is protected from being sold.
• You’ll have dedicated support from an IP throughout your IVA.
• You’ll often repay less than the full amount owed.

Things to consider with a Self-Employed IVA

• An IVA will be recorded on your credit file for six years, which can impact your ability to obtain credit.
• Your name will appear on the Insolvency Register (which is publicly accessible).
• IVAs generally last between five and six years.
• You may need to open a new bank account that’s not linked to your business creditors.
• Only unsecured debts can be included.
• If you default (miss a payment) on your IVA, you could face bankruptcy.
• IVAs are only available if you live in England, Wales or Northern Ireland.

Will my IVA be approved?

Once your Proposal is ready, your IP will submit it to your creditors. If at least 75% (by debt value) of the voting creditors agree, the IVA will be approved and becomes legally binding on all creditors – even those who voted against it.

If your IVA’s rejected, you won’t be left without support. Alternative solutions will be explored with you to find the best possible path forward.

Managing your IVA

From day one, you’ll receive dedicated support to help you navigate the IVA process. Your IP will explain everything clearly and support you in working out your income and expenses.

Don’t worry about planning five years ahead. Your IVA will include an annual review, where your IP will assess your financial situation and adjust your plan if your circumstances have changed.

Unlike standard IVAs, self-employed IVAs offer more flexibility around access to credit. You may still be able to use credit to keep your business running – particularly if you have upfront expenses and get paid later, such as in consulting roles or contract work. Any credit you need should be discussed and approved as part of your plan.

Do I qualify for a self-employed IVA?

If you’re self-employed and struggling with unsecured debts, a self-employed IVA could be suitable. We have a dedicated team of IVA specialists who can assess your circumstances and recommend the most suitable option for you.

This solution isn’t available in Scotland, but other debt options are. If you’re self-employed in England, Wales or Northern Ireland, and sell goods or services, you may be eligible. Here are a few examples of professions that often qualify:

• Construction Industry Scheme (CIS) workers
• Buy-to-let landlords
• Hairdressers and beauticians
• Gardeners and landscapers
• Florists and shopkeepers
• Accountants and bookkeepers
• Childcare providers
• Freelance creatives and designers

If you’d like to speak to someone about a self-employed IVA, contact us online or call us on 0800 316 1833 for a confidential conversation.

Get advice now

Self-Employed IVA client reviews

More Information On Self-Employed IVAs

• Pros And Cons Of A Self-Employed IVA
• The Self-Employed IVA Process