Personal Insolvency

A private individual may find that he or she are overstretched with credit cards, loans, store cards, etc and can no longer cope.

Why not try our free on-line personal solvency calculator? It’s free, the results are not recorded anywhere and we only contact you if you complete our insolvency enquiry form.

A director may have offered personal guarantees for a company’s debts, which he is unable to meet.

A sole trader or partner may find that he is unable to meet payments to his creditors.

To contact us either:

• Call 0161 817 6100 and speak with Jeremy Oddie or Julie Beavis or Paul Palmer
• Call Geoffrey Weisgard at our Chester office on 01244 323051
• Complete our Insolvency Enquiry Form
• Fax us on 0161 817 6102

Where there are a limited number of creditors (for example, a single bank) it may be possible to reach an informal agreement to pay part or all of the liability over a period of time.

Informal debt management plans can assist some circumstances, but they offer no guarantees:

• Creditors are not obliged to accept any offer, even if some of them agree, others may not
• Creditors can still take legal action against you
• Creditors do not have to freeze interest
• Time spans are increased so the debt problem is often not resolved, just extended

It is quite common to find that there are many debts that are just too difficult to manage.

There are two formal options available to individuals, a voluntary arrangement or bankruptcy.

Individual Voluntary Arrangements ("IVA") or Partnership Voluntary Arrangement ("PVA")

An IVA and/or PVA is a binding legal agreement with creditors, supervised by an Insolvency Practitioner.

The aim is to provide a rescue plan to aid your financial recovery and help you get back on your feet by regaining control of your finances. The benefits are a structured, yet flexible, approach to finance that will provide:

• Debt Forgiveness - a significant percentage of your debt being written off dependent on your circumstances
• Interest Frozen – allowing you the opportunity to deal with the past with out worrying about additional creditor charges
• Protection – preventing creditors taking any recovery action of their own
• Peace of Mind – all creditors have to deal with the Supervisor and not you, meaning that you will not have to answer their letters or telephone calls – just pass everything to us
• Reduce Outgoings – you only offer to pay what you can afford to pay
• Opportunity – to make a fresh start, having regained control

The terms of the arrangement are agreed by the creditors. Provided that 75% (by value) of creditors who choose to vote at a meeting accept the proposals, all creditors are bound by law.

The meeting is often only a"paper" meeting where no one actually turns up in person, usually each creditor sunmits his vote using a proxy. This way you may not have to meet your creditors face to face.

You offer to make an affordable monthly payment (usually for a period of five years) which is based on full disclosure of all income and expenditure. You are allowed to make payments in your routine expenditure to allow you to maintain a basic standard of living – it is only your surplus income that is assessed.

If you own a property, it is common for some, or all, of any equity in your property to be offered up to the creditors – this normally occurs during the fourth year. It is not intended that the property is sold and we can point you in the direction of a variety of mortgage advisors who are experts in dealing with people who have credit problems.

As the monthly payments and equity introduction is collected, the Supervisor will agree all creditor claims and distribute dividends to creditors, usually annually.

The Enterprise Act 2000 was introduced a streamlined IVA process, which no longer requires a Court Order (if your circumstances do not require one).

An IVA can even be used as an exit from bankruptcy and lead to the bankruptcy being annulled or cancelled.

If you are a trader, either on your own or in partnership with others, an IVA or PVA will provide the opportunity to continue trading and get your business back on its feet without fear of the business being closed. Voluntary Arrangements can work for partnerships too.

The IVA must offer a better return to your creditors than the alternative, usually bankruptcy.

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Bankruptcy

Where you cannot make an arrangement with your creditors or have no alternative bankruptcy can still provide debt relief.

Almost all of a bankrupt’ s assets fall under the control of a Trustee in Bankruptcy, including a matrimonial home. A bankrupt will be allowed to retain basic domestic goods (and in practice this means all domestic goods, including a car, unless these assets are of particularly high value) and tools of his or her trade (if a trader).

Unless the bankrupt is able to agree with the Trustee in Bankruptcy that his share of the matrimonial home is to be purchased by a spouse or other family members, the Trustee can apply for the repossession and sale of the property.

An undischarged bankrupt is subject to certain limitations; for instance, he may not act as a company director or obtain credit for more than £500 without disclosing his bankruptcy status.

An individual with bankruptcy debts over £20,000 had to wait three years before obtaining a formal discharge. The Enterprise Act 2000 has introduced a shorter discharge period for "no fault" bankruptcies (that is, where the bankruptcy followed an honest business failure or circumstances changed beyond their control to) of twelve months or less.

If you are already in bankruptcy, we can assist with negotiations with your Trustee in Bankruptcy about:

• Your Home
• Your pension policies (for bankruptcy petitions pre-dating 29th May 2000)
• Any other asset that may be claimed by the trustee
  

It may be worth considering a Voluntary Arrangement as an exit route from bankruptcy. This will often allow for the bankruptcy to be annulled.

Annulment of a bankruptcy means that it is as if the bankruptcy never existed and, combined with a Voluntary Arrangement, can be cost effective to both you and your creditors.

Recent legislation has also introduced a "fast track" voluntary arrangement whereby a bankrupt individual can seek agreement, via the Official Receiver, with creditors for a simplified voluntary arrangement. Subject to the approval of creditors this can result in an annulment or cancellation of the bankruptcy.

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Get Help, Act Now

Whatever your circumstances are, we can evaluate your circumstances and provide you with expert advice to help you regain control of your finances and provide you with some debt relief.

The initial consultation is FREE and we try to provide you the best solution to the problems you face.

To contact us either:

• Call 0161 817 6100 and speak with Jeremy Oddie or Julie Beavis or Paul Palmer
• Call Geoffrey Weisgard at our Chester office on 01244 323051
• Complete our Insolvency Enquiry Form
• Fax us on 0161 817 6102
• Write to us at: Mitchell Charlesworth, 6th Floor Brazennose House West, Brazennose Street, Manchester M2 5FE or 24 Nicholas Street Chester, CH1 2AU
  

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