Insolvency

Individual Voluntary Arrangements (IVA's)

Individual Voluntary Arrangement (IVA)

An Individual Voluntary Arrangement, or what is more commonly known as an IVA, was introduced by the government as a legal alternative to bankruptcy and a solution for people with problem debts.

An IVA may be a good solution for you if: –

 You have unsecured debts of £10,000 or more;
 You are unable to manage your monthly debt repayments without relying on credit;
 You owe money to 2 or more creditors (in some cases this may be only 1 creditor);
 You wish to avoid bankruptcy and protect your home.

An IVA is a private, legal contract between you and your creditors.

An IVA allows you to clear your debt at an amount you can afford, without any reliance on credit. This is usually over a fixed period of 5 years but can vary depending on your circumstances.

Once an IVA is set up and approved, all interest and charges are frozen, threats of legal action stop, and you no longer have the worry of hassle from your creditors.

Each IVA is unique and depends on your individual circumstances. Your monthly payments are determined by things like your monthly income, monthly living expenses, number of debts and your living situation.

For your IVA to be accepted, creditors representing at least 75% in value of the creditors who vote must agree to it.

Once your IVA is approved it is legally binding, your assets are safeguarded, and you are protected from any further court action. This will rely on you keeping to the terms of your agreement.

An IVA with Arthur Boyd & Company will allow you to look forward to a debt free future.

Bankruptcy

Bankruptcy

If you have unsecured debts of £5,000 or more, you may be thinking about the possibility of bankruptcy. Bankruptcy is a debt solution for a person who is unable to pay their debts as they fall due.

How you become bankrupt

You can declare yourself bankrupt or your creditors can petition for your bankruptcy.

Filing your own bankruptcy petition

If you live in Northern Ireland, England or Wales bankruptcy may be an option if you have unmanageable debts of over £5,000.

Northern Ireland

If you live in Northern Ireland you can make yourself bankrupt by submitting an online application and paying the bankruptcy fees. You can do this at https://www.nidirect.gov.uk/articles/bankruptcy

England and Wales

If you live in England or Wales you can make yourself bankrupt by submitting an online application and paying the bankruptcy fees. You can do this at https://www.gov.uk/apply-for-bankruptcy

What happens when I am bankrupt?

When you are bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). At the end of the bankruptcy period, most debts are ‘discharged’ (cancelled).

Bankruptcy usually lasts for about one year, however the effects of Bankruptcy can last much longer.

I am unable to manage my debts, is bankruptcy my only option?

Bankruptcy is a serious matter and is normally only considered as a last resort. However, for an individual with no means of repaying their debts, or who has little or no assets, bankruptcy can be the best option. Bankruptcy can enable a person or business to have a fresh start.

Alternatives to bankruptcy

• Informal agreement – if you have not done so already, you should contact your creditors and attempt to agree a repayment timetable;
•Individual Voluntary Arrangement (IVA) – a legal alternative to bankruptcy. An insolvency practitioner can negotiate a repayment plan on your behalf;
• Debt Relief Order (DRO) – available to an individual with debts of £20,000 or below and with little or no assets.

A Debt Relief Order is a formal insolvency process suitable for people who cannot pay their debts and who have no assets, a low income, no other access to debt relief and no prospect of their situation improving.

If people do have assets, or there is a possibility of an improvement in financial circumstances, a DRO is not an appropriate solution.

If you are in financial difficulties and you or your creditors are considering petitioning for your bankruptcy, contact Arthur Boyd & Company today for confidential and impartial advice on the options that may be available to you.