An informal business agreement is between you (personaly) and your creditors for paying back you debts. You pay back the debt by the amount you can afford.
Personal insolvency is where an individual, as opposed to a company, can't pay their debts as they fall due, and that can arise for a number of reasons such as illness, redundancy or sole trader business issues. When this happens and a person has assets, ultimately their creditors could force a realisation of those assets.
In the situation where a person has a house and there's some equity in it, then their creditors could ultimately force a sale of that property. So it's very important that as soon as a person owing money realizes they have difficultie. Your creditors can be very sympathetic, so long as they are approached as early as possible.
Due to coronavirus the goverment has made it easy to apply to HMRC for Time to Pay for any HMRC monies due. The more information you provide HMRC, like business plans and cash flow the more likely they will accept and give you more time.
Understanding the terms of an informal debt solution is key before entering into any repayment plan.