Personal Insolvency and Recovery
As with all financial problems, early identification of the problems usually gives a wider choice of recovery options.
The options are:
Informal Arrangements
Bankruptcy
Individual/Partnership Voluntary Arrangements
Informal Arrangements
In some cases it is appropriate for an individual to come to an informal agreement with their creditors.
However, this option should always be exercised with caution as usually the arrangement offers no protection for an individual against creditors changing their minds and taking action outside the informal agreement. Interest on debts usually continues to run and an individual can discover that no headway has been made in reducing their overall levels of indebtedness.
As licensed insolvency practitioners, it is very rare that we would get involved in setting up this procedure although we are happy to give a view as to whether it is suitable for you in your individual circumstances and point you in the right direction for further assistance.
Bankruptcy
We appreciate that personal financial problems will rate highly as one of life's most stressful situations and we aim to give clear advice to help you understand that your 'worst case scenario' i.e bankruptcy, usually reduces the burden of your financial worries.
When a person becomes bankrupt because he cannot pay his debts, his Trustee in Bankruptcy takes control of his assets, with certain exceptions, and the Trustee's job is to sell or realise his interest in these assets to create a fund to distribute to creditors.
There are many areas to consider including what will happen to your home, how long will bankruptcy last and what personal restrictions will you face whilst bankrupt. All these questions can be addressed by consulting one of our insolvency practitioners.
You may also find the following websites useful to gain background information on this procedure.
R3 WebsiteInsolvency Service Website
Individual/Partnership Voluntary Arrangements (IVA/PVA)
An IVA or PVA is a Court based alternative to bankruptcy. It is a legal process that gives an individual protection from their creditors.
The aim of an IVA is to provide a better outcome than bankruptcy.
The IVA is an individually tailored contract that binds both you as a debtor and your creditors. The procedure is extremely flexible and allows you to remain in control of your assets.
To ensure an IVA can be successfully implemented it is essential to take advice at the earliest opportunity.
Please contact us to ascertain whether this procedure is an appropriate route for you to take.
You can also obtain further background information from the above websites.
We would particularly recommend that you read the leaflet 'Is a Voluntary Arrangement Right for Me?' available on the R3 website.
“ Interest on debts usually continues to run and an individual can discover that no headway has been made in reducing their overall levels of indebtedness ”