If you find yourself in financial difficulties you will have a few options in order to resolve you financial problems. You could agree with your creditors on the extension of time for repayment of your debt or you could declare yourself bankrupt. There are a number of collective and enforcement insolvency procedures which will deal with your situation and may help you get out of your financial trouble.
Collective insolvency procedures
Individual Voluntary Arrangement (IVA)
An IVA is a type of a collective insolvency procedure which will help the debtor agree with his creditors on some terms in relation to repayment of his debt. IVA will help the debtor avoid being made bankrupt. Generally an interim court order will be issued by the court which will approve this arrangement. Such an application for an interim order will stop the creditors from exercising any action against the debtor without the consent of the court e.g. peaceable re-entry. The order will last 14 days and during this time it will be decided how to implement the proposals and whether to call the creditors’ meeting. The court must think it is appropriate in all the circumstances. It is the debtor who applies for this interim order and he will also have to prepare statements of his affairs and proposals for arrangements. The application for an interim order will protect the debtor from any action which could be taken against him by the creditors. If a debtor does not require such a protection, no interim order will be required. The meeting will then take place and the creditors will vote whether to approve suggested arrangement or not. As soon as they agree to it, this will be binding on them. The proposals will then be implemented by the supervisor of IVA so called nominee. He may also apply for the court’s directions in relation to implementing the suggested proposals.
Post bankruptcy fast-track IVA
It is possible to apply for IVA even if the debtor is bankrupt. This is a different procedure involving appointing Official receiver as a supervisor of the IVA.
For more information on:
- Arrangements other than IVAs
- Enforcement insolvency procedures