www.iva.co.uk

Does having an IVA prevent someone from starting her own business as a private limited company? Would she need to reveal details of her IVA to his business partner and/or any proposed lender?

Hi deborah_w

People who are Bankrupt are not allowed to be Directors, or be involved in the Management of a Limited Company, but no such restriction applies to someone in an IVA.

Failure to disclose to a Lender that you are in an IVA would be a really serious mistake, and might be construed as "obtaining credit by deception" - a criminal offence.

When the Lender carries out credit checks as they will, and finds you on the Insolvency Register (as you are in an IVA), that would be the end of your firm's finance application, almost certainly the end of your business partnership, and also the end of the business itself.

Don't even go there !

John is absolutely right - you need to be open about this as it will undoubtedly come out. Whilst you will be a director of a company, a number of the creditors (particularly the company's bankers) are likely to want some form of guarantee. Assuming you are already in the IVA this could be bad from 3 fronts:

1. The guarantee debt will be outside the IVA and the bank (and anyone else for that matter) will not be bound by it.

2. The granting of the guarantee may itself be breach of the IVA

3. If you are already in an IVA, the banks guarantee will be worthless (as all your assets are presumably in trust for your IVA creditors)

If you are not already in an IVA, then your entire financial situation (including your game-plan) can be approached on an holistic basis and the proposal drafted accordingly. If the IVA is already in place, there are significant legal and technical difficulties.

If you haven't already pushed either button (directorship and IVA) then there is likley to be more that can be done. In that case I can only recommend a face to face meeting with an IP.

Hope this helps

Ian