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Individual Voluntary Arrangement (IVA)

This is a good alternative to bankruptcy.

You enter into a legally binding agreement with your creditors (people you owe money to), which enable any debts to be frozen and no further added interest on those debts. Once this has been agreed by your creditors they are not able to take any further legal action against you to recover outstanding debts. The arrangement will be worked out by taking your income and basic monthly outgoings into consideration and paying back creditors a proportionate amount of what they are owed , from the surplus. This is a formal binding arrangement which is agreed with your creditors. Not all creditors may agree, but a 75%majority vote (by value of the amount owed to them) will secure the arrangement. Even if some creditors do not vote they are still bound to it.

Administration order

If you’re total debts are no more than £5000 and one of your creditors has obtained a County Court Judgement against you, the court, on your application may make an administration order. You would then pay the court weekly or monthly, who would then in turn would pay back creditors on your behalf, retaining a 10% fee. Details of how to apply for one of these orders are available at your local County Court.


You can only be made bankrupt by an order of the court. This happens when you yourself or usually a creditor, makes an application to court. Once the order is made your assets will be frozen by the official receiver (an individual from the courts insolvency service), who will usually appoint a Licensed Insolvency Practitioner, to be your trustee. It is then the trustees’ role to realise your debts, including the sale of any assets, including your share in the matrimonial home and car for the benefit of creditors. Your bank accounts can be closed and the bankruptcy is advertised

You are usually released from bankruptcy after a year, although in some cases the administration of the bankruptcy can take longer.

The bankruptcy will show on your credit report for a minimum of five years, so it will be extremely difficult to get credit during that time. It will remain on public record, so it may in the future affect your chances of renting a home or getting a job.

The start of your journey out of debt starts with a free confidential consultation.

There is no obligation or upfront costs, just a friendly advisor who can take you through your options.

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