Alternatives To Bankruptcy

What Are The Alternatives To Bankruptcy?

Before you take any action to apply for your own bankruptcy, you should seek expert advice about bankruptcy and the alternatives to going bankrupt that are available to you.

The Insolvency Service and the courts cannot advise you on specific insolvency problems; for example, whether you should go bankrupt.

Alternatives to bankruptcy:

• Individual Voluntary Arrangement or IVA
• Debt Management Plan
• Trust Deed
• Debt Relief Order or DRO
• Informal Arrangement
• Administration Order

Individual Voluntary Arrangement or IVA

This is a formal and legally binding arrangement between a Debtor and their Creditors. To propose such an arrangement you will need the services of a licensed Insolvency Practitioner or IP. Proposals to creditors can be based on a lump sum offer or regular monthly payments. If 75% (in value of debt) of those creditors who vote agree, then the arrangement is legally binding on all concerned. Regular payment IVAs normally last for between three and five years.

Check now to see if you qualify for an IVA

Debt Management Plans

There are several agencies that will act on your behalf to negotiate reduced payments with your creditors.

Check now to see if you qualify for a Debt Management Plan

Trust Deed

A trust deed is a legally binding arrangement to deal with your debts in Scotland where you make reduced payments over 4 years. At the end of this time, your unsecured debts are usually written off.

Check now to see if you qualify for a Trust Deed

Debt Relief Order or DRO

A debt relief order (DRO) is a way for you to have your debts written off if you owe less than £20,000 and have very few assets.

Check now to see if you qualify for a Debt Relief Order or DRO

Informal Arrangements

You may be able to come to an “informal” arrangement with your creditors to repay what you owe. It can be difficult to get everyone to agree to such an arrangement.

Administration Order

If you owe less than £5,000 in total to two or more different creditors and have at least one County Court judgment against you then this Court monitored arrangement could be a good option. You will need to obtain Form N92 from your local County Court Office.

• Last updated 15 January 2016

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