There are two types of insolvency process applicable to individuals:

• Individual Voluntary Arrangement
• Bankruptcy

Individual Voluntary Arrangement (‘IVA’)

An IVA is essentially a contract between an insolvent individual and his or her creditors which allows the individual to delay or compromise the payment of his or her debts.

An IVA is highly flexible, and can be adapted to meet the needs of any person, whether a sole trader or in employment. In essence, an IVA will replace the terms of the person’s existing contracts with his or her creditors (eg to make a minimum credit card payment each month) with new terms as set out in the IVA proposal. For example, the proposal might require the person to pay a fixed monthly sum into the arrangement for a period of 3 years so that creditors receive a minimum dividend of say 75p in the £.

We can carry out a review of your affairs to ascertain whether an IVA is appropriate for you. We can then assist in the drafting of the proposal and in obtaining the support of creditors.

Bankruptcy

There are times when bankruptcy is the most appropriate way forward for a person who is in financial difficulties, as it enables a fresh start to be made without the burden of debt.

A creditor owed at least £750 may present a bankruptcy petition to the Court, and if the debt remains unpaid at the date of the Court hearing, the Court may grant a bankruptcy order in respect of the person.

Once a bankruptcy order is made, a trustee will be appointed who will realise the bankrupt person’s assets and distribute the proceeds to creditors.

We are regularly asked by creditors to take appointments as trustee in bankruptcy in order to locate and realise assets falling into the bankruptcy estate and to maximize the return to creditors.