Sole Trader and Unlimited Liability Partnership Insolvency Options

Running a business with personal liability brings an extra dimension to resolving financial challenges.

The crossover of personal and business finances in to one needs an experienced and qualified head to lay out the insolvency options available.

The principal insolvency options are laid out below.

Informal Arrangements

The amount of and number of creditors (those parties owed money) will impact on the potential of negotiating a deferred settlement.

The level of any specific security held by any one creditor will also impact on the scope for negotiation.

Business Individual Voluntary Arrangement

Provided by the Insolvency Act this is a blanket solution for all unsecured creditors, both personal and business, to be repaid over a deferred period. This will often include a reduced payment amount.


An old fashioned solution that takes all, non-essential, assets both business and personal to use to turn to cash and pay whatever they’re worth to creditors.

Creditors who are specifically secured (e.g. a mortgage lender) against individual assets will receive payment from their secured assets before any asset sale proceeds are available to the unsecured creditors (e.g. HMRC or trade suppliers).

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