You can consider writing to all your creditors to see if a mutually acceptable agreement can be made regarding payments. It is advisable to include a timetable of when payments are to be made.
Debt management is a form of informal arrangement. This is where a debt management company deals with your creditors on your behalf. They will negotiate repayments and their own fees, which you will have to pay.
An IVA is basically a contract between the individual and his/her creditors to repay a given sum over a time period. An IVA is a legally binding arrangement managed by an insolvency practitioner over a fixed period, usually 60 months.
The decision to implement the IVA is taken at a creditors meeting, organised by an insolvency practitioner. As long as the creditors voting (in person or by proxy) in favour of an IVA represent 75% by value, the arrangement is legally binding on all creditors.
For individuals running their own business, an IVA can give you time to consolidate your position and spread payments over a period of time. This enables the business to continue trading and hopefully return to profit.
Bankruptcy should always be seen as the last resort in solving any debt issues. The consequences of becoming bankrupt can mean you lose your house. It can also prevent you from pursuing certain careers and, for example, prevent you from becoming a company director for a period of time. Having said that, the severity and stigma of bankruptcy has lessened over time, and it is now far more acceptable than it used to be.
Individuals running their own business can petition the courts to wind up the business – in other words, they can go bankrupt. The term bankruptcy can only apply to individuals.
If you face difficult financial problems, take advantage of our knowledge and experience and call us for a free consultation.