Individuals, including sole traders, often face financial difficulties as a result of a business failure, relationship breakdown or redundancy.
We can help assess an individual financial position and based on the circumstances, advise on the best way forward. There are numerous options including informal negotiation with creditors, Debt Relief Orders, Debt Management Plans, Voluntary Arrangements and Bankruptcy which all have benefits and pitfalls
A bankruptcy order may be obtained by any creditor owned more that £5000. A debtor can bankrupt himself by filling in the relevant forms at the County Courts. The debtor's assets are then sold and the money is distributed - after the Insolvency Practitioner's costs, to creditors. Some assets, unless they are very high value, are exempt. These include tools of trade, pensions, ordinary household contents and possessions - including a car. In most cases, bankruptcy ends after one year or less. After this, the slate is wiped clean. However, the repercussions can be long lasting. Even once discharged, a bankruptcy record will remain on your credit file for at least 5 years - making it difficult to obtain things such as a mobile phone contract, let alone a bank account or mortgage. Please contact us if you are worried about your circumstances - we can help you come to the decision that will help you sleep at night.
IVAs were introduced to provide an alternative to bankruptcy. The types of debts dealt with by IVAs can include personal loans, credit card balances and other forms of "buy now, pay later" unsecured loans. An IVA is a legally binding contract between a debtor and their creditors. It allows a person to make a formal proposal to settle a debt within a reasonable and fixed period of time. The contract is typically for 5 years.
An Insolvency practitioner will help put the proposal to creditors and negotiate an agreement. The debtor will have to disclose full details of their financial circumstances. If more than 75% of the creditors accept the terms of the proposal, it is binding on all the creditors.
Creditors can put forward changes to the proposal but the debtor can decide whether or not to accept them. Any interest and debt charges will be frozen and creditors are not allowed to demand additional payments. The debtor will make monthly payments, usually a minimum of £200, to the Insolvency Practitioner based on what it is agreed the debtor can afford. Once the final payment is made, any remaining debt is legally written off.
John Harlow and Lynda Butcher are licenced in the UK as Insolvency Practitioners by the Insolvency Practitioners Association. When acting as Receiver, Administrative Receiver or Administrator, John Harlow acts as agent only, without personal liability and when acting as Administrator, the affairs business and property of the company are being managed by him. Lynda Butcher holds a non-appointment taking licence.