Just when the business challenges are starting to make sense, personal difficulties can overtake you. Individuals may face financial difficulties arising from business activities. We are happy to help with that too as part of our focus on business rescue and insolvency. Business related personal insolvency can arise, for instance, where creditors of a limited liability company have been personally guaranteed.
One option is an individual voluntary arrangement (“IVA”) – this is a formal arrangement with creditors that legally binds on all creditors if 75% of those creditors voting upon your proposals agree. The arrangements can offer a flexible approach and are ideal when all stakeholders want to work together to find a solution. IVA proposals need to be made via a Licensed Insolvency Practitioner and are often based on monthly contributions, however they can involve one-off settlements for a better realisation of assets.
Once approved an IVA may last for a period of up to five years (shorter if not a monthly contributions based IVA). The Licensed Insolvency Practitioner (now called a Supervisor of the IVA) will monitor the debtor's compliance with the terms of the IVA with annual reports being sent to creditors often with an annual dividend payment. Failure to comply with the terms can lead to IVA failure and subsequent bankruptcy.
Individual voluntary arrangements are not suitable for everyone and it is important that you take independent professional advice based on your own personal circumstances. Be very wary of so called IVA factories/specialists that can end up selling you the product they have on the shelf regardless of your individual needs.
We understand the impact that such pressures can bring. The extent of the impact may depend on how the debts have built up and we can help with an assessment of your individual circumstances. Financial problems often have a big effect on personal relationships especially when the size of the problem comes as a surprise to one or both partners. Much of the information provided in the 'services for business' sections is relevant for the individual in business too.
If you need advice regarding individual voluntary arrangements please do not hesitate to contact Scott Earrey, our personal insolvency specialist, on freephone 0800 331 7417 who can provide you with some free and confidential initial advice.