Sole Trader Insolvency - An IVA may be a solution
Many businesses in the UK are now incorporated, but a huge number of people are still working on their own, in small self contained businesses, doing anything from running a sandwich shop to a web design company. To be a sole proprietor is to accept all the risk in the hope and expectation that the rewards will follow. There will be no hiding behind a limited company if decisions go wrong. Any debts incurred will see the proprietor as personally liable. The sole proprietor may find him or herself in need of advice and assistance as much as the next person. Indeed it is often found that it is this arrangement more than any which sees the entrepreneur put more and more of his or her own money into a venture, as the risk and rewards end up at the same table. If a sole trader finds themselves in trouble financially, it is not the end of the road. Insolvency Professional help hundreds of traders each day ring fence their debt, enter arrangements to pay back what they can afford and move on with their businesses, unfettered by debt but with the freedom and space to clear the liabilities they have built up. They use a mechanism called an individual voluntary arrangement. Many of those reading this will have heard of this in the context of consumer debt, but an equal number will not realize that this solution was designed for the small business owner. way back in 1986 as a way to avoid what was then a punitive bankruptcy regime. The creditors are now all geared up to clearing IVA's through their sausage machine system and so it takes a special skill to prepare and get a sole trader IVA accepted. The IVA is in essence an offer in the form of a formal proposal put forward by the debtor to his creditors whereby he undertakes to make a financial payment each month usually for 60 months. This money will be collected by his insolvency practitioner and then distributed each year after the IP has taken his fee. At the end of five years assuming all payments have been made, the balance of any debt owing to the creditor is written off. For an IVA to be approved 75% by value of those creditors who vote, need to approve the arrangement. Some arrangements can therefore be approved by a single creditor voting in favor for a small amount of debt, if other creditors choose not to vote. At this point everybody is bound whether they have voted in favor or not. If you have business issue as a sole trader, and you do not where to turn for advice and you think that an Individual Voluntary Arrangement may suit you, speak to an Insolvency Practitioner. Information provided by Steve Thatcher of Help With Debt (UK) Limited a total debt solutions company. You can find more information and full contact details at http://www.helpwithdebtuk.com, alternatively email Steve at sthatcher@helpwithdebtuk.com or call on 01162171406. Steve is experienced in putting IVA's together About Author Steve is a qualified solicitor who specialises in debt solutions for businesses and companies alike. From pre-pack administrations to walk through bankruptcys he is always free to talk to. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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