avoid bankruptcy with an iva
the proven way to clear debts forever
Bankruptcy in the UK (excluding Scotland where different legislation applies) can be avoided by entering into an Individual Voluntary Arrangement (IVA) . Even if a debtor has recently been made bankrupt then there are some circumstances where an IVA can retrospectively get the personal bankruptcy annulled. An Alternative to Bankruptcy in an IVA and wilfully stopped making the agreed payments or failed to disclose to creditors some material fact in his Proposal e.g. hiding assets then a bankruptcy will normally follow.
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An IVA to avoid Bankruptcy
An IVA proposal can be started at any time during a debt period. Even if the debtor has already been declared bankrupt by the Courts an IVA Proposal can still be made. The current bankruptcy legislation now asks the Official Receivers Office to try to determine whether an IVA is preferential to bankruptcy; however in practice the Bankruptcy Courts are so busy with applications that the debtor is always advised to seek independent debt advice.
In trying to get the bankruptcy overturned the debtor must engage a specialist e.g. an Insolvency Practitioner to prepare an interim Proposal to the Court. The Proposal often needs to be delivered in a short timescale so that the Official Receiver can decide whether to affirm the bankruptcy or hold the final bankruptcy decision until a fuller Proposal can be delivered to the Court.
A specialist IVA Insolvency Practitioner will be able to determine, the likely prospects of an IVA succeeding for any given set of debt circumstances. Basically an IP will always give you the best IVA Debt Advice.
Bankruptcy following IVA failure
Of the 40,000+ IVAs approved during 2006 around 20% are likely to fail at some point during the average 5 year period that an IVA normally lasts. Many IVAs in danger of failure, normally becuase of non payment of agreed monthly instalments, are capable of variation by the acting insolvency practitioner, with creditor approval, providing it is in the overall interests of the creditors. The Insolvency Practitioner acting as Supervisor of the IVA can apply for a Variation Order, at any time to stop the IVA agreement failing.
Depending upon all the facts of the IVA, if a debtor ceases payments or otherwise contravenes the terms of the IVA, then the Supervisor is duty bound to advise the creditors. The Supervisor can also recommend an application be made for bankruptcy against the debtor. The creditors are only likely to agree to the application for bankruptcy if there are sufficient assets to pay the creditors a reasonable and worthwhile dividend. A creditor's petition for bankruptcy normally costs about £1,600 and they do not often “throw good money after bad” unless prospects of asset recovery are good. It should also be noted that there are a small class of creditors, including HM Revenue and Customs which may apply to make a debtor bankrupt irrespective of asset recovery.
If you would like to speak with an Insolvency Practioner for immediate advice and help then complete the Instant Advice - Call Back Request form on the right of this page.