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Coping with debt
Key points
- Personal insolvencies increased each year between 2015 and 2019.
- An individual voluntary arrangement is an alternative to bankruptcy.
- Creditors in the second quarter of 2020 seemed to give individuals more autonomy to alleviate debts during lockdown.
- HMRC will insist that capital gains tax on the sale of assets is treated as an expense of the IVA.
- Crown preference is reintroduced in December 2020.
There is no doubt the coronavirus pandemic has presented enormous challenges to businesses and investors. The profitability of many sole traders and trading partnerships has been adversely affected by the pandemic to the extent that many which were previously profitable are expecting to make losses in the current year and perhaps into the future before favourable trading conditions return. Further with the coronavirus job retention scheme coming to an end many employees are facing an uncertain financial future. The most severely affected...
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