Self Employed IVA
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Self employed IVA is a specilist in self employed and sole trader debt help. Our advisors have helped many people who have found themselves with outstanding debt by providing specilist advice.
You can rest assured your in safe hands when it comes to speaking to our trained advisors, they will examine your situation and provide you with the best advice. If it is best advice to take out a debt solution we will help set up and process this plan from this start to finish.
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Self Employed IVAs Explained
Being self-employed is one of the most rewarding experiences anyone can have. There is nothing quite rewarding like owning a profitable business and facing up to the day to day challenges off making it a success. However, financial pressures that come with being self-employed can be very stressing, and when circumstances conspire against you, you may find yourself being a huge debt.
Cash flow is essential for any business, especially to the self-employed sole trader. Thus, when trade slows and turnover goes down, financial problems increase. It is highly advisable that as you face these financial challenges, you take action as early as possible to protect your business.
The sooner you take action and choose an appropriate debt solution, the sooner you can prove to people you owe money to that you are taking the matter seriously. You should consider setting up a Self-Employed IVA. In this article, we will discuss all the essential details you need to know Self Employed IVA.
What exactly is Self-Employed IVA?
A Self Employed Individual Voluntary Arrangement is an important debt solution that allows you to continue running your business and avoid bankruptcy and ultimately pay back your proportion of unsecured debts.
Individual Voluntary Arrangements (IVAs) were introduced by the 1986 Insolvency Act as an alternative to bankruptcy. They were meant to help people whose income or assets might be vulnerable to the bankruptcy process. For this reason, self-employed IVA is an ideal debt solution for people who are self-employed. Self-employed IVAs work in the same way as an IVA for an employed person.
It prevents your creditors from taking any actions and allows you to resolve your financial issues in a structured manner. An IVA also enables you to avoid the increasing interest charges as all interests and charges on your debts are frozen so that the amount you owe does not increase.
Rather than struggling with unaffordable debt payments to many different creditors, an Individual Voluntary Arrangement allows you to make a single affordable payment and you will be allowed a reasonable sum each month for your basic needs.
You will need to work with a qualified Insolvency Practitioner (IP) to draw up the terms of your Individual Voluntary Arrangement. You will be required to make regular monthly payments at an agreed level to your IP, who acts as the supervisor of the IVA. The IP will then make all payments to your creditors.
Once you enter a self-employed IVA, your creditors cannot contact you directly and they have to deal with your Insolvency Practitioner. In most cases, a self-employed IVA enables you to be debt free in just 5 years, allowing you to stabilise your business and concentrate on maintaining profitability and revenue.
A Self Employed Individual Voluntary Arrangement also protects your property and other assets that could have otherwise been sold to pay back your debts in a bankruptcy.
An IVA prevents your unsecured creditors from taking action against you, such as raising and enforcing a County Court Judgement (CCJ), if you were to fall into arrears with your payments. It also protects you from your creditors contacting a debt collection agency or adding interests and charges to your already existing debts.
Self Employed IVA
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Benifits Of Self Employed IVA
Is a Self-Employed IVA Ideal for Me?
If you work for yourself and sell goods or services, you may be classified as a sole trader. A bespoke or Self-Employed IVA is ideal for anyone who works for himself or herself and completes a self-assessment tax return. The following are some of the occupations that may qualify for a self-employed IVA:
- Freelance designers
- Childcare providers
- Buy-to-let landlords
- Construction Industry Scheme (CIS) Workers
If you qualify for a Self-Employed Individual Voluntary Arrangement, you should also fulfil the following criteria:
- You must be living in England, Wales or Northern Ireland. Residents of Scotland do not have to apply for an IVA, instead, they should for a similar debt solution known as a Trust Deed
- You must owe at least £7,000 in unsecured debts
- You must have at least two separate debts
- You do not want to deal with your creditors directly.
- You must have sufficient income to make your monthly repayments to your creditors
It is important to note that Self-Employed IVAs are very flexible. Therefore, if you do not meet all of these requirements, you may still be able to get an IVA. Contact a professional debt adviser to help you through the process.
How Can I Benefit From a Self-Employed IVA?
When compared to other types of insolvency, such as bankruptcy, a self-employed IVA is less restrictive. It allows you to continue controlling your business finances, while ensuring you have a peace of mind and a more positive financial future.
In short, a self-employed IVA is a clear and straightforward way to pay back your debts with regular, affordable payments. Just like the IVA for employed people, a self-employed IVA is legally binding between you and your creditors.
It helps to avoid the effects of bankruptcy or liquidation by you paying back a portion of your unsecured debts over a specified period of time. Once this period comes to an end, usually about years, and provided that you stick to the terms of the IVA, your creditors will agree to write off the outstanding balance of your unsecured debts. In most cases, a self-employed IVA will cancel a huge amount of your unsecured debts and work to prevent further demands from your creditors..
What Types of Debts Can be Included in My Self-employed IVA?
Debts that Can Be Included into your Self-Employed IVA include:
- Unsecured debts that have a CCJ or attachment of earnings in place
- National insurance, self-assessed tax, Pay As You Earn (PAYE) as well as HM Revenue and Customs
- Council tax of the previous years and current year if in arrears
- Debts from friends and family members
- Debts that had been previously secured against an asset that has been repossessed, such as shortfalls of vehicle HP and properties.
- Unsecured debts, such as credit cards, store cards, overdrafts, credit unions, doorstep loans, payday loans, catalogues, charge cards and other unsecured loans.
- Arrears from utility supplies, such as water, gas and electricity
- Arrears from service providers, such as landlines, mobile phones and digital TV
Your insolvency practitioner will inform you which debts you can and cannot include in your self-employed Individual Voluntary Arrangement.
How Much Will My Self-Employed IVA Cost?
There are many different fees and costs that will be involved your self-employed IVA process. Your Insolvency Practitioner will not charge any upfront fees for setting up your IVA. Instead, the charges will be added to your agreed monthly payments when your self-employed IVA becomes accepted. Here are the three major types of fees and costs involved in setting a self-employed Individual Voluntary Arrangement:
- Disbursements: These refer to the payments made to third parties involved in setting up your self-employed IVA. They cover essentials, such as registration fee that come with being added to the Insolvency Register.
- Supervisor Fee: These are actual fees paid to your person who supervisors your self-employed IVA. In most cases, supervisor fees are usually set at 15 percent of payments into the self-employed IVA. The fee covers the on-going costs of your IVA.
- Nominee Fee: These are fees that are paid to cover the cost of putting together your IVA proposal to creditors. An IVA requires a specialist, a qualified Insolvency Practitioner, to set it up which is why there is a cost. The nominal fee largely depends on the practitioner you use and who your creditors are.
It is important to note that the amount of money you will pay into your IVA will be calculated by subtracting all your monthly basic expenditure, such as food, rent, travel costs, utilities and insurance. Other priority debts, such as court fine arrears, council tax arrears and mortgage arrears are also deducted from your monthly income. Your monthly income here refers to all your wages, investments, benefits etc. You will never be asked to pay more than what you can realistically afford.
What Happens to My Self-Employed IVA if My Circumstances Change?
However, you need to keep your insolvency practitioner informed about your circumstances. For instance, if you get a large amount of money during the term of your self-employed IVA, you will be required to pay all your debts in full including your self-employed IVA fees.
Similarly, if your financial circumstances change and you cannot afford to raise money to pay your agreed monthly repayments, you should notify your insolvency practitioner. Your insolvency practitioner will create a new repayment plan depending on what you can realistically afford.
Does An IVA Affect My Credit Rating?
A Self-Employed IVA will remain in your credit files for 6 years. This means it lowers credit rating as it will appear on your credit records for the six years after its implemented.
These are just some of the most of the essential details you should know about a self-employed. It is important that you work with a highly qualified debt adviser so you can be sure that your self-employed IVA is a success. Contact Us today for more information.
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Self Employed IVA understand the difficulties involved in being self employed, we understand how quickly things can unexpectedly change. Self Employed IVA are here to provide you with free & impartial advice. You can use our free eligibility checker to find the best solution for you.
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