If you are in an Individual Voluntary Arrangement (IVA) and you’re asking Can I start working for myself? there is nothing that prohibits you from doing so, but there are some points that My IVA Adviser would like you to be aware of.
The issues will be practical ones, and this article explains some of the pitfalls.
Anyone currently using the IVA debt solution should think long and hard about the consequences of self employment.
To many, even those without debt, the thought of being their own boss is tempting, but the reality could be quite different from the dream.
Being in an Individual Voluntary Arrangement (IVA) does not exclude you from being self employed, but you must be aware of the pitfalls and how they may affect your IVA.
Probably the most important thing to remember is that your monthly contribution into your Individual Voluntary Arrangement (IVA) must not be reduced.
If you are changing from the security of a regular wage to a self generated income, the potential for income fluctuations and therefore IVA payment problems will be increased, and if you cannot maintain your regular monthly IVA contribution your Individual Voluntary Arrangement (IVA) will be in danger of failing.
Another pitfall is that the terms of your Individual Voluntary Arrangement (IVA) state that you cannot obtain credit or a loan when in an IVA.
This means that any enterprise you undertake must be financed through means other than credit. This may affect how you try and start your business, unless your idea can flourish without large start up costs.
Presumably the reason for starting your own business is to attempt to be successful and, therefore, reap the benefits of that success as a financial gain.
If your new venture is a fabulous success you might generate extra income, and in this case you would be expected to increase your IVA monthly repayment so that the creditors can recover more of their debt.
This is not normally a problem, because the majority of people in an Individual Voluntary Arrangement (IVA) only ever want to repay as much of the debt as possible, but it is, nevertheless, a point to be borne in mind.
If you are currently in an Individual Voluntary Arrangement (IVA) and are thinking of starting your own business take enough time to consider the points above, make sure you are properly prepared and be realistic with your expectations.
If you are not in an Individual Voluntary Arrangement (IVA) but need further advice on how to deal with your debt call one of our experienced IVA specialist on 0800 088 7503 or download any of our free IVA guides specially designed to answer your questions about your concerns.
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