Alternatives to bankruptcy
If you become unable to pay your debts, or you are likely to become unable to pay your debts in the near future, there are alternatives to bankruptcy. One of the alternatives to bankruptcy is to instruct an insolvency practitioner to set up an Individual Voluntary Arrangement (IVA) with your creditors. The insolvency practitioner will look at your assets and liabilities and will make a proposal to the court. The insolvency practitioner will also suggest whether it is necessary to call a meeting of creditors. If a meeting of creditors is called, and the meeting approves the proposal by a majority of over 75% then the debtor will be bound by the agreement. The IVA will be overseen by the insolvency practitioner who prepared the proposals and if the debtor fails to comply with the arrangement, then it will become possible for the insolvency practitioner, or any creditor, to petition for bankruptcy.
Entering into an IVA has benefits for both the creditors and the debtor. The debtor will not be subject to the stigma of bankruptcy, or the accompanying bad publicity. In addition, the debtor will avoid the disabilities and disqualifications that come with being declared bankrupt. The creditors, on the other hand, will be more likely to recover a higher percentage of the debt owed to them and will do so much more quickly than if bankruptcy proceedings are commenced. An IVA will only be possible if the debtor has the means to make a reasonable offer to their creditors, and will not be suitable in all cases. The alternatives to bankruptcy can be explained to you by an insolvency solicitor.
If you would like to obtain legal advice on the alternatives to bankruptcy, Caven can put you in touch with a local specialist Insolvency Solicitor free of charge. So, if you have any questions or would like our help in finding local Insolvency Solicitors please call us on 08001 221 2299 or complete the web-form above.
- Last Updated on 02/03/2010