Other Debt Solutions
Our aim at debt-simple is to provide advice and assistance to all your debt worries. There are different causes of debt and there are also other debt solutions depending on the level of your debt.
We have strategic partnerships in place with professional bodies to help find the right solution for you, whether it’s an IVA/Trust Deed or advice on Bankruptcy.
What’s an IVA and Trust Deed?
In England, Northern Ireland and Wales, Individual Voluntary Arrangements (IVAs) are a formal alternative for individuals wishing to avoid petitioning for their own bankruptcy.
The IVA was established by the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's unsecured creditors via an Insolvency Practitioner. The proposal is presented to the debtor's unsecured creditors versus the debtor opting to petition for bankruptcy. The aim of an IVA is to help you clear your debts at a reduced level over a fixed term, usually over a period of 5 years. Through the duration of the IVA you won't receive any further contact from your creditors, plus all interest and charges will be frozen.
Creditors (normally) take a commercial decision at a creditors' meeting called to consider the IVA proposal and vote on a poundage basis. To be approved, a majority of 75 per-cent of the vote is required where connected parties (such as family) vote and then, of those voting in favour, 50 per-cent must be unconnected.
In Scotland there is a similar procedure to the Individual Voluntary Arrangement called a Protected Trust Deed (PTD). The Trust Deed, although similar to the Individual Voluntary Arrangement in many ways, lasts only for 3 years as oppose to the normal 5 year period that constitutes the vast majority of IVA's. Trust Deeds are an alternative to bankruptcy in Scotland which is referred to as Sequestration.
What about Bankruptcy?
Bankruptcy is a legally declared inability or impairment for an individual to pay their creditors. Creditors may file bankruptcy for a debtor in an effort to recoup a portion of what they are owed. In the majority of cases, bankruptcy is initiated by the debtor (the bankrupt individual).
In the United Kingdom (UK), bankruptcy (in a strict legal sense) relates only to individuals and partnerships. Companies and other corporations enter into differently-named legal insolvency procedures: liquidation, Administration (insolvency) (administration order and administrative receivership). However, the term 'bankruptcy' is often used (incorrectly) when referring to companies in the media and in general conversation. Bankruptcy in Scotland is referred to as Sequestration.
A Trustee in bankruptcy must be either an Official Receiver (a civil servant) or a licensed insolvency practitioner.
Following the introduction of the Enterprise Act 2002, a UK bankruptcy will now normally last no longer than 12 months and may be less, if the Official Receiver files in Court a certificate that his investigations are complete.
For free advice on the best solution for you contact us
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