Newbie considering IVA as Sole Trader

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AgentJ
Posts: 3
by AgentJ » Tue Nov 21, 2017 5:15 pm
Hi

This seems like a fantastic forum where I can see lots of help and support offered.

After speaking to a really helpful IP for over an hour today, I’m now considering applying for an IVA to avoid bankruptcy. Lots of things to still think about...

I would like advice please on what information is included in the letters sent to creditors, which I understand includes my employees. I’m not concerned about the creditors I owe money to, but rather what my employees find out about.

I can’t seem to find any information about the IVA process regarding treating employees as creditors online, or any example letters.

I know this sounds like a minor concern in the bigger scheme of things, but if I am to carry on trading I’m concerned they may either find another job (a sought after profession in our area), tell people I’d rather didn’t know, or both.

Any advice would be appreciated please.

Many thanks
redboxtree
Posts: 90
by redboxtree » Wed Nov 22, 2017 3:17 pm
If you are a sole trader ALL the liabilities are YOURS - including any outstanding money to employees.

If you had been a Ltd company it would have been different.

If you go into an IVA then your credit rating will be trashed and your IVA will be public knowledge as you will be listed on the Insolvency Register.

You will also have to consider changing your bank account unless it is clear that it is linked to an established business.

Any employees would need to make a decision linked to how they are paid and whether you personally could guarantee their wages.
AgentJ
Posts: 3
by AgentJ » Thu Nov 23, 2017 8:02 am
redboxtree wrote:
If you are a sole trader ALL the liabilities are YOURS - including any outstanding money to employees.

If you had been a Ltd company it would have been different.

If you go into an IVA then your credit rating will be trashed and your IVA will be public knowledge as you will be listed on the Insolvency Register.

You will also have to consider changing your bank account unless it is clear that it is linked to an established business.

Any employees would need to make a decision linked to how they are paid and whether you personally could guarantee their wages.



Thank you for this. I am at the stage of deciding between bankruptcy and an IVA, so my credit rating will be trashed any way.

If I am made bankrupt then my business will close and my staff will lose their jobs.

If I decide (& am accepted) on an IVA, I just wanted to know what details/financial information is sent to my employees?

Many thanks
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jonathah
Posts: 26
by jonathah » Tue Nov 28, 2017 4:19 am
Your IVA will only be public knowledge if anyone knows where to look and has reason to do so.
Your bank account should remain unaffected if in credit.

I work both employed and freelance in a specialist sector and apart from reducing my debt the IVA has had nil effect.

If you employ people and your debts are business related then it would be worth going with a local insolvency practitioner/business recovery specialist rather than (no disrespect!) seeking advice on internet forums or dealing with IPs who are more attuned to dealing with what one might call consumer insolvencies.

Good luck and don't sweat. All problems are ultimately solvable.
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Foggy
Forum Expert
Posts: 24130
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by Foggy » Tue Nov 28, 2017 12:50 pm
I agree with Jonathah regarding the need to seek out an IP well versed in self employment, as the application of the terms of an IVA do vary to those in PAYE employment and there are unique problems to be catered for.

Regarding who gets details, again, as said, only those who know about the Insolvency Register will see any reference to you being in an IVA. However, anyone deemed to be a creditor will get chapter and verse of all of your financial details as included in the proposal.

Bank accounts: Some banks will prefer you were on a basic account, others will leave you be but with no overdraft facilities. There are a couple prone to closing accounts of those in an IVA - HSBC and First Direct. A few others do it randomly (sometimes mistaking an IVA for BR).
AgentJ
Posts: 3
by AgentJ » Thu Nov 30, 2017 8:15 am
Thank you for all your replies and helpful information.

I have actually been in touch with an IP who says the my creditors will be my employees and landlord as a minimum.

My business suppliers are on a cash basis and my business rent is paid up in advance. I am exempt from business rates and have no business debt (overdraft, loans etc) apart from the HMRC one. So apart from my staff and HMRC, are my suppliers and landlord still classed as creditors, to be contacted?

I asked the IP for a typical template letter sent to creditors or a redacted copy of an actual one (so that I can prepare for damage limitation if I am to continue trading) but haven’t received one. I could really do with this if anyone can help?

Thanks again.

J
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