An IVA to help you with Business Debt

Business IVA

It is not only individuals who are struggling with accumulated unsecured debt that might seek for IVA as a solution, but also business professionals. They constitute a separate criteria, given their field of occupation, so the IVA arrangement itself will come on different terms and conditions.

A business generally must generate profit in order to be able to stay alive. But when it isn’t generating profit, and is only accumulating debts, company directors must immediately look for a way to save their business. And because all evil must be taken out from its roots, dealing with the debts is the number one problem. Once debts are being paid back, the company arrives at a shore and then with some administrative adjustments here and there, it can get back on track generating profit.
Business IVA

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It may sound simple, but it is not. However, if you, as a company director respect all the terms and conditions imposed by a business IVA, you will successfully get rid of your accumulated debts. The most important thing is that you recognize early enough the signs of financial failure, and don’t wait until it is too late, until bankruptcy seems to be the sole viable solution.

Some other steps which might go along an IVA, but which implemented without any debt management solution are not effective, are:

Company re-structuring. You should ask for expert opinion, employ a money manager to draw up your financial status and see what you can change
Reducing unnecessary costs of the company
Sometimes, even reducing the workforce is something which on the short run will help.

However, seeking immediately for an IVA program is the most effective of all. A business IVA is similar in many respects to an IVA which is undertaken by individuals. Insolvency practitioners will represent your case, negotiating with your creditors, in order to obtain certain discounts and facilities, and to accept your repayment schedule.

Main characteristics of an IVA:

You must be able to demonstrate that the proposal is sustainable financially, that you have the necessary resources in order to make the repayments or the full and final settlement through the IVA
¾ of the creditors (which is the great majority!) must give their consent, for the IVA to take place. If creditors consider that you cannot make proof of the necessary resources in order to make the repayments, they might reject the proposal. If so, your next step might be insolvency, or bankruptcy.
Insolvency Practitioners involved in cases of Business IVA, many times will also need to have another expert collaborating with him, given the fact that business financial issues are by far more complicated than simple individual unsecured debt.
You need to keep in mind that IVA’s constitute legally binding agreements; therefore, once you have entered such a program, you must do your best and keep up with all the terms and conditions.
If you keep up with every single payment, the Insolvency Practitioner will not put as many restrictions regarding your company’s needed financial actions. For example, if you comply with the rules, you might get eligible for yet another loan your company needs so much, sooner than you can imagine.
Unlike in the case of bankruptcy, where your company gets advertised in the newspaper as being insolvent, with an IVA the matter stays solely between debtor and creditors, and this is also something stated within the terms and conditions of the IVA process.