www.iva.co.uk

Somewhat complex but my son-in-law's business has collapsed. He personally owes me £100,000 but I will probably write off half of it. I imagine that other creditors will amount to something in the order of £20,000. Once the sole trader business is gone he will be unemployed. His wife earns on the region of £60,00 pa and they have no property.
we remain on good terms and I will hang in to support them through this. I can't really afford to discount the £50,000 and up to now I have received interest on the loan equivalent to losses from bank investment.

An IVA is one way of dealing with it, and the fact that you are a creditor would potentially help get it through.

What form are the payments likely to take - Third party payments from his wife (I assume your daughter) or from assets of the business?

Ian

yes, from my daughter, and hopefully in due cours from her husband once he has found work - the business has no appreciable assets

Given the magnum of your debt compared to the other creditors, an IVA might be possible, but do be aware that there are two stages of voting under such proceedings and the second stage would discount your claim. If more than 50% of the remaining creditors reject the proposals there will be no IVA regardless of your position.

How much do you feel that your daughter-in-law would be able to contribute to an IVA, and are there other assets such as equity in a property which should also be taken into account?

Thanks for this additional information Melanie - I hadn't realised there were 2 stages - nevertheless, would I be right in thinking that the statutory agencies would generally be compliant, which could probably swing the 50%.

We have been advised to cease trading now given that monthly losses are in excess of £3,500. This brings into question our landords position because this would presumably be a break in lease and just the rent is £1000, and with 2 years or more to run they may be able to show a considerable claim against the business - what is the lease position following an IVA?

I will check with my daughter what could be afforded but at a guess maybe £750/m over 5 years.

The Amounts due to landlords in an insolvency is a complex issue.

Technically the landlord can claim for the residue of the lease, which is the starting point. However, he should also attempt to find a new tenant as soon as possible. as he has a duty to mitigate his loss so far as that is possible. So the amount the landlord can claim will to a some degree depend on how difficult it is to re-let.

Ian