Money Advice, Debt Advice & Debt Help
My home information pack (Hips) business is in trouble

My home information pack (Hips) business is in trouble

Home information packs (Hips) are no longer required to sell a home and as a result thousands of people may lose their jobs or see reductions in their income. We consider the options for people whose livelihoods have been affected.

On the 21st May 2010, the requirement for a seller of a property to provide a home information pack (Hip) was suspended.

The move was widely applauded by estate agents who suggest that the requirement for Hips was helping to hold back recovery in the housing market. One of the claims was that the requirement which could cost around £600 prevented people putting their property on the market just to test the water.

However, the sudden change has affected the incomes of many thousands of people. It has been estimated by the Association of Home Information Pack Providers that up to 10,000 could be financially affected by the cancellation of the scheme.

There are over 3000 trained Hips home inspectors, many of whom are self employed for whom there is now no need for the service they provide. The fact that these people have now lost their jobs is worrying enough. However, many borrowed thousands of pounds to pay for training and to start their businesses. These debts remain outstanding and are now at risk of default.

We consider your options if you find yourself in this situation.

Dealing with Hips debts

If you are self employed and have borrowed to pay for Hips training and to set up your business, you are unfortunately personally liable for the debts.

Finding a job with a salary high enough to cover your debt repayments could be a tough call in the current job market. One way to ease this problem is to consider a debt management solution.

A debt management plan (DMP) or individual voluntary arrangement (IVA) can be used to significantly reduce the amount you are required to pay towards your debt each month.

If for example you know your monthly debt repayments can be reduced from £500 to £150 this may open job opportunities which you would have previously ignored because the salary did not pay you enough.

Limited company problems

If you set up a limited company to provide Home Information Pack services, it is also likely that you will remain personally liable for any money that the business borrowed.

Over the past few years, it has become virtually impossible for a small business to obtain an overdraft or bank loan facility without the company directors giving personal guarantees that the debts will be repaid.

Even if you have a loan under the Enterprise Finance Guarantee (formally the Small Firms Loan Guarantee Scheme), you will have had to provide a personal guarantee.

In the same way as if you had been self employed, the monthly payments towards these debts can be reduced to a more manageable amount using a debt management plan or IVA.

If you have debts as a result of setting up a Home Information Pack business it is likely that you will need to take swift action to try and secure alternative employment.

One of the issues of trying to secure a new job and income when there are debts outstanding is that you are restricted to considering jobs that pay enough to cover all of your outgoings.

If you are facing this type of challenge, introducing a debt management plan or individual voluntary arrangement to reduce the amount you are required to repay each month towards your debts can considerably widening your options.

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