For Sole traders: business debt

Sole traders, like limited companies, can face financial problems and even business debt, such as at the loss of a major customer or a bad debt. At Moorhead Savage we appreciate the effort that goes into building up a business and have specialists who understand and can advise sole traders.

The financial affairs of a sole trader can be more complicated than those of an individual in employment therefore we suggest taking professional advice as to the full implications before deciding on a course of action.

The main options available are:

If you would like further information on business insolvency or business debt or would like to discuss your options please call 01709 331300 or email


If you are a partner in a business, you effectively wear two “hats” – you are responsible for the debts of the partnership as well as looking after your own private financial matters. In a partnership, the partners are personally responsible for the affairs of the business, unlike in a limited company, where the owners and directors have limited personal liability for the debts of the business.

If the partnership is experiencing financial difficulties, you may be threatened personally with a county court judgement or, in the worst case scenario, bankruptcy, in respect of the business debt. If you are having personal money problems, action taken against you may in turn affect the partnership. In many cases, if a partnership is having financial problems, the knock-on effect means that the partners often have personal debt problems as well.

A partnership’s financial problems can be addressed in various different ways, depending on the particular circumstances. If the partnership business is basically viable but has accrued debts which it just can’t afford to repay, a voluntary arrangement with creditors may be an option, allowing the business to continue, with the debts ring-fenced and properly dealt with. Voluntary arrangements can take the form of either a Partnership Voluntary Arrangement (PVA) which just deals with the business debts, or the partners can each propose an Individual Voluntary Arrangement (IVA) which can then be linked together to deal with all debts, both business and personal. A partnership can also be liquidated or placed into administration.

If you are a partner in a business and would like advice on how to cope with financial problems and business debt and business insolvency, call us on 01709 331300 or email and we will arrange a free, impartial consultation where we can discuss your options, without obligation.