Whether you're a freelancer, consultant, or running your own small business, staying on top of your finances is crucial. One tool that can be incredibly helpful for the self-employed is an Individual Voluntary Arrangement (IVA). In this article, we'll explore what IVAs are, how they work, and how they can benefit those who are self-employed.
An IVA is a formal agreement between you and your creditors to pay off your debts over a period of time. This can be a lifeline for those who are struggling with debt but want to avoid bankruptcy. One of the key benefits of an IVA is that it provides legal protection from your creditors, meaning they cannot take further action against you as long as you stick to the terms of the arrangement.
For the self-employed, IVAs can offer a way to manage debt while still keeping your business running. When you enter into an IVA, you work with an insolvency practitioner to come up with a manageable repayment plan based on your income and expenses. This plan typically lasts for five years, during which you make affordable monthly payments towards your debts.
It's important to note that not all debts can be included in an IVA. Debts like student loans, court fines, and child support payments are typically not eligible. However, unsecured debts like credit cards, personal loans, and overdrafts can usually be included. This can provide some relief for self-employed individuals who may have accumulated debt while building their business.
Another advantage of IVAs for the self-employed is that they can help to protect your business assets. Unlike bankruptcy, which can result in the sale of assets to pay off debts, an IVA allows you to retain control of your business. This can be vital for those who rely on their business as their primary source of income.
Entering into an IVA is a serious financial decision, so it's essential to seek advice from a qualified professional before proceeding. An insolvency practitioner will assess your financial situation and help you determine if an IVA is the right option for you. They will also guide you through the process of setting up and managing the arrangement, providing much-needed support and expertise along the way.
In conclusion, IVAs can be a valuable tool for the self-employed who are struggling with debt. By providing a structured repayment plan and legal protection from creditors, IVAs offer a way to manage debt while still keeping your business afloat. If you're a self-employed individual facing financial difficulties, speaking to an insolvency practitioner about the possibility of an IVA could be a step towards a more secure financial future.