Updated: 4th March 2020
I’ve been experiencing some personal debt issues recently and have a number of creditors hounding me for repayments that I simply can’t afford at the moment. There are a million other expenses piling up, and the stress has gotten to be too much. I am strongly considering entering into an IVA so that I can gradually escape this debt and all of the problems that are coming with it. I know that when you file for bankruptcy you’re not allowed to be the director of a company, but can I be a company director if I have an IVA?
I really want to get my personal debt issues taken care of, but at the same time I won’t even consider this option if it means I’ll lose my position as company director. After all, I can’t repay my debts if I no longer have a reliable source of income. I’m really interested to see whether this is a suitable option for me, and I look forward to your answer.
One of the main benefits of an Individual Voluntary Agreement (IVA) is that, unlike bankruptcy, a director does not have to resign or lose his or her position as a director to resolve their own personal debt issues. This means the director is able to continue serving as they would normally while the IVA is in effect.
Some companies choose to include a provision in their terms of employment which states that entering into an IVA is immediate grounds for dismissal, so a director working for such a company could not have an IVA without losing their position. Also, if you are a salaried director, or if your income is based on the company’s drawing of dividends, you’ll need to produce records of the company’s financial information to prove that it is able to support your personal income during the IVA.
However, if for any reason you’re unable to continue operating as a company director, your IVA cannot stop you from becoming the director of another company unless, of course, the hiring entity at that company refuses to hire you because you have an IVA. The good news is, this is highly unlikely as so many people do have personal debt and are in an IVA.
13th October 2021
The Bank of England has said it anticipates that rates of corporate insolvency will increase in the coming weeks following the removal of restrictions on winding up petitions.Read More