IVA vs Bankruptcy After Business Liquidation — Advice Needed

[Louis04]

Hi all,

I'm looking for advice and personal experiences from anyone who's been through either an IVA or bankruptcy, particularly after a business has entered liquidation.

I’ve had two businesses - one retail and one e-commerce - both of which have recently gone into liquidation.
While they were technically separate businesses, they were connected: the e-commerce store was the online arm of the physical retail shop.

Unfortunately, I had personal guarantees on some of the business debt, and with both now closed, I’m left with over £100k in combined personal and business (PG) debt.

I have no assets to help with this debt ( I rent my house, I do not own a car, and I have no savings), and no dependents - it’s just myself, my partner, and our dog. I’m currently self-employed in a new business that I hope to rebuild from, but things are very tight financially.

I previously attempted an IVA in December when only one company had gone under, but it failed due to two creditors (iWoca and Capital On Tap) holding majority votes and rejecting it. Now the 2nd company has entered, which has triggered a couple more PGs, which now overrule their majority.

I haven’t made any repayments since December, on the advice of an advisor, and thankfully, creditors have been fairly quiet - I think they understand the situation.

My Questions

• How does bankruptcy affect your future compared to an IVA?
  In a few years, once this is all over I would like to be able to eventually buy a house, maybe a car - nothing lavish, just maintain some stability. What has the long-term impact been like for you if you chose one route over the other?

• What do people think is the better option - IVA or bankruptcy - in a situation like mine?
  I’m trying to weigh up if the IVA is really better or just delays the inevitable.

• Would asking the creditors who are rejecting my IVA applications (iWoca and Capital On Tap) to force and pay for me to go bankrupt be a better option for me, or worse?

• Has anyone been through either process? What was it like, and would you do it again or differently?

• How much "better" is an IVA really compared to bankruptcy in the eyes of lenders, landlords, or future opportunities?
  I hear it’s “less severe” — but does it actually make a difference?

If anyone’s been in a similar position, I’d be hugely grateful for any advice or insights on how either route impacted you and what you’d suggest I do.

Thanks in advance.

Louis

 

[Lisa Thomas]

My Questions

• How does bankruptcy affect your future compared to an IVA?
  In a few years, once this is all over I would like to be able to eventually buy a house, maybe a car - nothing lavish, just maintain some stability. What has the long-term impact been like for you if you chose one route over the other?

Your credit rating will be damaged for 6 years, regardless of which option you choose.

• What do people think is the better option - IVA or bankruptcy - in a situation like mine?
  I’m trying to weigh up if the IVA is really better or just delays the inevitable.

I can't see how an IVA is suitable in your circumstances. You have no assets to protect and payments in an IVA last up to 6 years, whereas Bankruptcy is only 3.

• Would asking the creditors who are rejecting my IVA applications (iWoca and Capital On Tap) to force and pay for me to go bankrupt be a better option for me, or worse?

There is no guarantee they will pay to do that, plus you will then be in limbo, waiting for that to happen. Assuming Bankruptcy is the right option for you, it's probably best to get on with it - the quicker you do it, the quicker you'll be released (after one year if you cooperate and don't breach any conditions)

• How much "better" is an IVA really compared to bankruptcy in the eyes of lenders, landlords, or future opportunities?
  I hear it’s “less severe” — but does it actually make a difference?

Can't see that it makes much difference to the creditors - all they care about is getting some money back, so it depends on what you are offering in each procedure.

I recommend you take insolvency advice from Stepchange: https://www.stepchange.org/

But always happy to offer a second opinion if required. Feel free to dm me.