Creditor Portal

Insolvency Solutions for Individuals

INFORMAL

If you are experiencing financial difficulty or creditor pressure, it may be possible to agree payment terms on an informal basis with your creditors. You may require some assistance to make these arrangements and the best way to approach these. Please feel free to contact Michael Royce to discuss this further.

INDIVIDUAL VOLUNTARY ARRANGEMENT (“IVA”)

An IVA is a formal agreement between the individual and its creditors and is an alternative to bankruptcy (or a Debt Relief Order). This may be appropriate when the individual is experiencing cash flow difficulties to effectively ring-fence the historic debt to allow the sole-trader business to continue trading or allow the person to continue in employment. The agreement will be for a set period of time and paying a certain amount of money into the IVA through a monthly contribution and / or a lump sum.
 
An IVA can protect the individual’s assets such as their property, however, it may require the individual to provide funds in consideration of their share of the asset if there is positive equity (i.e. through a remortgage of their property).
 
Proposals are drafted and sent to the Company creditors outlining what contributions the Company is proposing to pay over a period of time and what creditors expect to receive and when. Creditors are then asked to vote whether they accept or reject what is proposed in the IVA. In order for an IVA to be agreed, 75% of the individuals Creditors have to agree to the content of the proposals – if the creditors agree to the terms of the IVA, this is binding on all creditors irrespective of whether they agreed to the IVA or not.
 
The IVA can give an element of debt forgiveness thereby writing off a percentage of the amount owed to the individual’s creditors.
 
An IVA has advantages and disadvantages to other insolvency procedures, and a few are identified below:
 
If you wish to discuss proposing an IVA, please do not hesitate to contact Michael Royce to arrange a meeting to discuss this further free of charge.

Advantages

• The Individual maintains control of their assets and they can propose that certain assets be excluded
• The costs of a IVA are significantly lower than a Bankruptcy
• The Individual is able to continue running their own business or employment 
• Stops any legal action taken by creditors once the IVA is accepted (if there are urgent requirements to stop court action, an Interim Order can be obtained to stay this action)
• You can propose an IVA if you are Bankrupt which, subject to being approved, would get the Individual out of Bankruptcy

Disadvantages

• Individual’s will no longer be able to obtain credit other than stipulated in the IVA proposal
• The IVA is registered on a central register which credit reference agencies undertake searches
• IVA’s do affect your credit rating
• If the terms of the IVA are not adhered to, the IVA may fail and result in the Individual being made Bankrupt

Need help with your debt? Call today on

07921 577752

DEBT RELIEF ORDER (“DRO”)

A debt relief order may be appropriate if you meet the following criteria:
• you are unable to pay your debts;
• you have debts of £20,000 or less;
• you do not have surplus income after expenditure of more than £50 per month;
• you don’t own your home;
• your assets are worth less than £1,000 (some assets are not included)
• you don’t own a motor vehicle worth £1,000 or more (if your car is specially adapted because you have a disability, this is not included)
• you haven’t had a DRO in the last six years and aren’t going through another formal insolvency procedure, such as bankruptcy or an individual voluntary arrangement;
• you have lived, had a property, or worked in England or Wales in the last three years.

If you wish to discuss a DRO, please do not hesitate to contact Michael Royce to arrange a meeting to discuss this further free of charge.

BANKRUPTCY

There are two main ways to be made Bankrupt, the first is an individual can make themselves bankrupt via an online application form through the Insolvency Service. The second is by a creditor that is owed at least £5,000, they can petition for an Individual’s bankruptcy petition.
The Official Receiver will automatically be appointed as the Trustee with all the Individual’s assets vesting in the Trustee. It is possible that an Insolvency Practitioner from the private sector be appointed as Trustee at a later date.
 
Before applying for Bankruptcy, it is advised that you seek independent professional advice as there may be an alternative solution. In this case, please do not hesitate to contact Michael Royce to arrange a meeting to discuss this further free of charge.

Advantages

The main benefits to a bankruptcy are as follows:

• The individual will normally receive an automatic discharge at the first anniversary of the bankruptcy
• Writes off all the individual’s debts (except certain debts, see disadvantages).

Disadvantages

The main negatives are as follows:

• It affects the individual’s credit rating
• It may result in an income payment agreement / order lasting 3 years
• The automatic discharge of the bankruptcy order may be suspended if the individual does not co-operate with the Trustee
• You are not able to act as a director of a limited company
• You are not able to carry on in certain professional positions
• Certain debts such as Student Loans, Court fines and debts owed under family court proceedings are not included or written off

COMPANY VOLUNTARY ARRANGEMENT (“CVA”)

A CVA is a formal agreement between the Company and its creditors. This may be appropriate when the Company is experiencing cash flow difficulties but has a viable business model. For example, the Company experiences a large bad debt which impacts on the businesses ability to meet its own liabilities, the CVA would give the company breathing space to defer the payment of its own liabilities – this may also give some agreed debt forgiveness (partial write off with the Company’s creditors agreement).

Proposals are drafted and sent to the Company creditors outlining what contributions the Company is proposing to pay over a period of time and what creditors expect to receive and when. Creditors are then asked to vote whether they accept or reject what is proposed.
If the required number of creditors accept the proposal, this will be binding on all creditors.

A CVA has advantages and disadvantages to other insolvency procedures, and a few are identified below.

If you wish to discuss proposing a CVA with the Company’s creditors, please do not hesitate to contact Michael Royce to arrange a meeting to discuss this further free of charge.

Advantages

• The Company maintains control of its assets
• The costs of a CVA are significantly lower than an Administration
• There are no investigations undertaken by the Supervisor of the CVA
• If the company has a particular licence or agreement in place that the company is unable to transfer or buy-back such as an Operators Licence in the haulage trade, the CVA enables to continue the business with no interruptions or delays
• Directors remain in control of the business
• Stops any legal action taken by creditors once the CVA is accepted

Disadvantages

• Suppliers may withdraw credit terms and may cause the company issues in obtaining credit in the future
• A CVA does get registered at Companies House
• If the company suffers a loss during the period, the CVA propose is rigid and may not offer an element of flexibility to amend the terms which will ultimately lead to its failure and probably be wound up

ADMINISTRATION

Administration is a process available to insolvent companies in order to provide protection from its Creditors whilst a plan outlining how to restructure or sell its business and assets is formulated. Protection from Creditors is particularly useful and necessary in a situation whereby a company is being proactively or aggressively pursued for payment of a debt from one or more of its Creditors. A common reason for a company to enter Administration is if Creditors are threatening or have issued a Winding up Petition or is otherwise being pursued aggressively through the Courts by Creditors.
 
If you wish to discuss the administration process, please do not hesitate to contact Michael Royce to arrange a meeting to discuss this further free of charge.

PRE-PACKAGED ADMINISTRATION

In certain circumstances it may beneficial for the business to be sold immediately after the appointment of an Administrator in order to secure the continuation of the business which may include securing employees’ jobs. A sale of the business is normally pre-agreed and completed by the Administrator on appointment.

A marketing campaign should be undertaken with the assistance with agent’s advice to achieve the best value possible for the business and its assets. The business may be sold to connected or unconnected parties.
 
As creditors are not normally consulted on this procedure, the Administrator has to ensure that the creditors interests are not prejudiced.
 
If you have received a winding up petition or are concerned that your business is or becoming insolvent, please do not hesitate to contact Michael Royce to arrange a meeting to discuss the options available free of charge.

Request a callback or contact Michael today!

This form is currently undergoing maintenance. Please try again later.

Privacy Policy

Complaints Procedure

M.R. Insolvency and M.R. Business Solutions are trading names of MRNB Limited
MRNB Limited
PO Box 95
Heckmondwike
WF16 6AU
© 2024 All rights reserved. The content on this website is owned by us and our licensors. Do not copy any content (including images) without our consent.