There are many reasons why people get into debt such as credit card or store card debt or even debt after a death in the family. Some callers have debt arising from divorce, separation or single parenthood. For this reason we provide dedicated advice on these situations.
Corporate voluntary Insolvency The circumstances of your company will determine which process is most suited to your requirements. It is imperative that the best course of action and process is taken to ensure the best outcome is achieved. Our insolvency practitioners can advise you further on: - Administration - Receivership - Company Voluntary Agreement (CVA) - Liquidation
Personal voluntary Insolvency It is important to note that each of the options below can adversely affect your credit rating. However, this should not necessarily be a factor in deciding which course of action is the most appropriate and our recovery and insolvency experts are here to guide you through the process and explain every step of the way. - Debt Management Plan (DMP) - Individual Voluntary Agreement (IVA) - Bankruptcy - Debt Relief Order (DRO)
Many people believe that bankruptcy and insolvency are the same thing but there a few differences between the two terms.
What is Insolvency? Insolvency is simply where you are unable to pay back your debts when the payment is requested and have no way of obtaining money. Unlike bankruptcy, insolvency is not a legal process and merely describes the debt and financial problems that have occurred. It is a term that is also often used in relation to a business that is in debt and cannot afford to keep going.
If you are insolvent then it is important to remember that you do not have to declare bankruptcy. These days there are a number of other methods for taking control of your finances and paying your debts. You should however make sure that you tackle your debts now whilst you have the chance before bankruptcy does become an issue.
What is Bankruptcy? Bankruptcy is a way of dealing with any debts that you may have if you are unable to pay them back. It is generally seen as the last resort as it will mean selling off any assets that you have and does come with a number of possible consequences to your career and your credit rating. Generally it will be your creditors that petition for your bankruptcy but you may also do this yourself if you wish.
It is important to remember that bankruptcy is not an easy way out as it can have some detrimental effects so you should keep this in mind if you are thinking of declaring yourself bankrupt. By being declared bankrupt you will mark your credit rating for around 6 years. This means that if you apply for credit you will most likely be declined or face high repayments.
You will not be able to keep your bankruptcy a secret and should expect the details to be listed in your local newspaper which can cause embarrassment. Any equity that you have in your home could be used by the Court to go towards your bankruptcy and there is a risk that you could lose your home.
Bankruptcy is a formal court procedure which you can start or which one or more of your creditors owed at least £750 can start. Your assets (with certain exceptions) are sold to help pay your creditors. However, you can usually keep your personal belongings, the contents of your home and your tools of trade (which may include your car) unless they have a high value. I search financial blog for advice and read on - Pros and Cons of an IVA.
If you have surplus income after meeting your essential household and personal expenses, you will have to make payments out of your income for up to 3 years.
Your assets and income are dealt with by a licensed and regulated insolvency practitioner or by a government official called the official receiver. Bankruptcy usually lasts for 1 year, and once you have been freed (discharged) from your bankruptcy, you are released from your debts (with certain exceptions).
• Debts are written off, with certain exceptions applying • Creditors can't take further action unless the debts are secured on your home or other property. • It allows you to make a fresh start after only a year. • You may be able to avoid having to sell your home if your spouse, partner or a relative can buy your share of its value after debts secured on it have been paid.
What is Bankruptcy? Bankruptcy is one way of dealing with debts that you cannot pay. Bankruptcy proceedings eventually free you from overwhelming debts, however any assets that you have may be sold and the proceeds shared amongst your creditors. Bankruptcy lasts for twelve months, after which time you can make a fresh start.
What are the effects of Bankruptcy? - You will have to report to the Official Receiver and provide him with details of your financial affairs - The Official Receiver will effectively own all your assets and look to realise their value for the benefit of creditors - You will usually have to close your bank account - You are unable to obtain credit exceeding £500 without disclosing your bankruptcy - The Bankruptcy Order is registered with credit reference agencies for at least six years - Your employment may be affected depending upon what job you do - You cannot be a company director or hold public office
If you apply for credit, it may be refused and you won't always know why.One of the reasons could be that a county court judgment (CCJ) has been made against you. A CCJ is made because someone you owed money to: - took legal action in the county court against you, and - the court decided that you owe the money, and - the person applied to court for a court order saying you must pay themoney.
CCJ Removal As soon as a CCJ is made, it is usually entered in the Register ofJudgments, Orders and Fines. When a creditor is deciding whether to lend you money, they will usually check on your financial situation with a credit reference agency. The credit reference agency will hold details of your CCJ, taken from the Register of Judgments, Orders and Fines. This may be thereason why credit was refused.
It is possible to get a CCJ removed in some cases. But dubious credit repair companies make promises they can't keep. It's a criminal offence to lie to a court to try to get a CCJ removed. There are some options to remove a CCJ from the register or have the information on it corrected. These include: - Paying the CCJ in full within a month If you do this, details of the county court judgment are removed altogether from the register. - Paying the CCJ later You can get a certificate of satisfaction, in which case the CCJ is marked as satisfied on the register (but stays on it). Anyone who checks it will know that you have paid what you owe. - Judgment set aside You can apply for the judgment to be set aside in some cases. - Wait six years The register holds details of CCJs for six years. For them to be removed, you have to wait for this time limit. - Amend details If your details on the register are wrong (e.g. the amount of the CCJ is wrong) contact us once you've searched the register. We will check with the court, and we'll let you know what they say.
If you do not deal with a statutory demand within 21 days of receiving it, the creditor will take this as proof that you are unable to pay the debt and can then make you bankrupt.
It is vital that you act quickly when you receive a Statutory Demand if you are to avoid the creditor bankrupting you or applying for a Winding up Petition.
In today's testing economic climate creditors are increasingly resorting to Statutory Demand more quickly than ever before.
Often the use of Statutory Demands is inappropriate and in many cases they can be set aside by the Court. This will prevent a creditor from taking any formal insolvency process against you.
You could try to set aside the statutory demand on one or more of the following grounds.
- You have a claim against the creditor which is equal to or more than the debt. - The debt is secured against property that is worth the same or more than the debt. (Your creditor does not have to accept an offer to secure the debt). - The whole debt or the unsecured part of the debt is below £750. - The debt is disputed and the court believes there are reasonable grounds for dispute.This might include where the creditor has waited too long to pursue the debt, or the debt is regulated under the Consumer Credit Act 1974 and there is no signed agreement. - You may be able to argue that you can apply for a time order under the Consumer Credit Act 1974 instead.
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.
The Insolvency Act 1986 essentially governs issues relating to personal bankruptcy and Individual Voluntary Arrangements and all administrative orders relating to company insolvency.
The Insolvency Act 1986 is an important piece of legislation that cover the IVA procedure. An individual voluntary arrangement (IVA) is a legally-binding agreement that allows you to repay your creditors by making a reduced monthly payment at an amount you can afford. This usually lasts five or six years, and at the end of this time your remaining debt is written off. You make one affordable payment to us each month and we distribute it fairly amongst your creditors. During your IVA creditors are not allowed to contact you or increase your debt in any way.
The Contents of the Insolvency Act 1986 - Part I - Company Individual Voluntary Arrangements -Part II - Administration Orders - Part III - Receivership (ss 22-72H) - Chapter I - Receivers and Managers (England and Wales) - Chapter II - Receivers (Scotland) - Chapter III - Receivers Powers in Great Britain as a whole - Part IV - Winding Up of Companies Registered Under the Companies Acts (ss 73-219) - Chapter I - Preliminary - Chapter II - Voluntary Winding Up (Introductory and General) - Chapter III - Members Voluntary Winding Up (ss 91-96) - Chapter IV - Creditor' Voluntary Winding Up (ss 97-106) - Chapter V - Provisions Applying to both kinds of Winding up - Chapter VI - Winding Up by the Court (ss 117-162) - Chapter VII - Liquidators - Chapter VIII - Provisions of general application in winding up - Chapter IX - Dissolution of companies after winding up - Chapter X - Malpractice before and during Liquidation; Penalisation of companies and company officers; Investigations and prosecutions (ss 206-219) - Part V - Winding Up Unregistered Companies (ss 220-229) - Part VI - Miscellaneous Provisions applying to Companies which are Insolvent or in Liquidation - Part VII - Interpretation for first group of parts - Insolvency of Individuals - Bankruptcy - Part VIII - Individual Voluntary Arrangements IVA - Part IX - Bankruptcy (ss 264-371) - Chapter I - Bankruptcy Petitions - Bankruptcy Orders - Chapter II - Protection of Bankrupt's Estate and Investigation of his Affairs - Chapter III - Trustees in Bankruptcy - Chapter IV - Administration by Trustee - Chapter V - Effect of Bankruptcy on certain rights, transactions etc. - Chapter VI - Bankruptcy Offences - Chapter VII - Powers of Court in Bankruptcy - Part X - Individual Insolvency: General Provisions - Part XI - Interpretation for second group of parts -Miscellaneous matters - Part XII - Preferential debts in company and individual insolvency - Part XIII - Insolvency Practitioners and their qualifications (ss 338-398) - Part XIV - Public Administration (ss 399-410) - Part XV - Subordinate Legislation - Part XVI - Provisions against debt avoidance (England and Wales Only) - Part XVII - Miscellaneous and General - Part XVIII - Interpretation - Part XIX - Final Provisions - Schedules - Schedule B1, on the new administration procedure after the Enterprise Act 2002
An IVA lasts 5 years or more. An IVA will typically last for 5 years, which may be extended or failed at any time by the supervisor if the circumstances arise. This could mean you facing the possibility of bankruptcy some years down the road after the IVA has been put into place.
That is why it is important to be absolutely sure that an IVA is suitable and can be completed with confidence. A lot can happen in five years, such as job loss.
How long does an iva last? In some circumstances, if you are able to offer your creditors a lump sum in settlement of your debts, an IVA can last for less than 5 years. This can either be via a windfall, third party assistance or more commonly by sale or remortgage of a property.
Full and Final Settlement IVAs are where a lump sum is offered to creditors in settlement of a debt upfront. These tend to last no more than three months.
An IVA can last longer than five years if you need to make up for missed or reduced payments or if your proposal states that the IVA must be extended if you are unable to release any equity at the end of the fifth year.
Please note that bankruptcy has more than financial and legal consequences so it is important to read and understand the following:- - If you are a sole trader then usually your business will be closed and any employees dismissed. - Whilst you are bankrupt or subject to bankruptcy restrictions - If you are in a partnership at the time of your bankruptcy then the partnership will automatically dissolve upon the making of your bankruptcy order - Reputation could discourage former and potential associates. - Bankruptcy offences, which are punishable by imprisonment or fine or both - Previous transactions being reversed or altered. - Bankruptcy restrictions order, which prolong the restrictions of bankruptcy for between 2 and 15 years.
- An income payments order is a consequence that means you will still have to contribute to your bankruptcy debts for a period of 3 years - Bank accounts for bankrupts are difficult to obtain free of charge. Visit the bank accounts page for more information. - At the date of your bankruptcy you will lose control of your assets. - You risk losing assets of value, including your home. Go to the bankruptcy and home page for more information. - The bankruptcy order will remain on your credit report for six years making future borrowing difficult and expensive. When you apply for a mortgage you will usually be asked if you have ever been made bankrupt. - Some professions, licensing bodies, associations and legal acts prohibit individuals who have had a bankruptcy order made against them or currently have a bankruptcy restriction undertaking or bankruptcy restriction order in place.