While creditors would prefer debtors to honour the terms of their original contracts and repay their debts in full and on time they recognise that in the real world some borrowers will fall by the wayside and threaten to default. In such a scenario, creditors want to maximise the amount that they can get back and minimise the time that will take.
(more…)Debtors in the UK who are encountering financial difficulties and who may be insolvent usually opt for one of the three principal solutions of Bankruptcy, an Individual Voluntary Arrangement (IVA) or a Debt Management Plan (DMP).
(more…)While creditors differ in how they view and treat Debt Management Plans, it is probably fair to say that creditors generally look on a Debt Management Plan (DMP) as the lesser of at least two evils. They would obviously prefer that debtors repaid their debts in full. However, if it is a straight choice between a DMP and bankruptcy, the DMP is a clear winner as far as creditors are concerned.
(more…)Many citizens of member states of the European Union (EU) are blissfully unaware of certain unexpected benefits that EU membership conveys in relation to personal insolvency. These benefits are rooted in the principle of the free movement of labour for EU citizens within the EU and are particularly relevant for those who find themselves overburdened by debt and threatened with aggressive insolvency proceedings in certain member states of the EU.
(more…)One of the anticipated benefits of membership of the European Union (EU) is the expectation that Europe-wide legislation will in due course be harmonised so that all twenty seven states will have compatible legislation particularly where it affects the rights of citizens.
(more…)Did you know that there are now twenty seven countries in the European Union (EU) all with their own personal insolvency legislation? The mind boggles at the volume, variety and complexities of laws and regulations which this must entail.
(more…)The IVA process has three principal parties involved. First there is the debtor who is insolvent; secondly there are the creditors from whom the debtor has borrowed money which he (or she) cannot now repay (in full at least); finally there is the Insolvency Practitioner (IP) whose role includes acting as an honest broker between the debtor and the creditors. For an IVA to succeed, each of these three parties must work together with the others in honest and transparent relationships.
(more…)There are many available options for people who are struggling with debt. Debt management comes in many different forms, and can be hugely helpful with troublesome debts. However there are situations in which you need to use the law to protect yourself from bankruptcy, in which case using an IVA may the better option.
(more…)If you are unable to pay your debts as they fall due or have fallen behind in your payments to creditors then you can understand what harassment by creditors is. It often starts with reminder letters and overdue letters and if you are unable to make the repayments they require the chasing is ramped up to emails, texts, phone calls and even personal visits to your home or to your place of work or both. Creditors often contract out the more unsavoury parts of the hounding to debt collection agencies.
(more…)Recently published figures estimate that the cost of rearing a child from birth to twenty one years of age can be up to £200,000. When someone in an IVA becomes pregnant the prospect of trying to sustain the IVA during the pregnancy and especially after the birth of the baby can be a daunting one.
(more…)The work of an insolvency practitioner (IP) is much like that of the dentist. You expect your dentist to examine your teeth (and gums), to explain what needs to be attended to, to outline what treatments are available, to quote for the cost of each alternative treatment and to outline how long each course of action will take.
The IP must treat the debtor coming with a financial problem in much the same way: examine your financial circumstances, set out what needs to be addressed, explain what options are available and outline the cost, duration and effects of each course of action.
(more…)The key question facing the insolvent debtor is whether to enter into an IVA or to petition for bankruptcy. If the debtor has consulted with an Insolvency Practitioner (IP), both options will have been spelt out clearly as well as any other available options. While the IP’s preferred option is often clear it remains the debtor’s decision as to which option to choose. Strangely, some debtors choose to enter an IVA when bankruptcy is clearly a better option in their circumstances and other debtors choose to go the bankruptcy route when an IVA is clearly a better option.
(more…)In an interview in today’s Irish Independent, the Dublin City Sheriff Brendan Walsh hit out at the proposed reform of Irish insolvency law by calling it unfair because it is ‘very debtor friendly’. He takes a dim view of the extensive and detailed proposals of the Law Reform Commission (LRC) relating to personal indebtedness.
(more…)If you are insolvent and are considering entering into an Individual Voluntary Arrangement (IVA) you should check whether you have been overpaid Tax Credits in the past. Any such overpayment may be entered as a debt in your IVA proposal provided the overpayment has been ‘determined’ prior to the date of approval of your IVA. If you think you have been overpaid contact HM Revenue & Customs (HMRC) at its nearest tax office and bring your concern to the notice of officers. Request a Statement of Account (SOA) as soon as possible based on your latest income information.
(more…)Individual Voluntary Arrangements are for individuals who have unsecured debt that they can no longer manage. If you’re struggling with debts such as credit cards or unsecured loans, then an IVA may be used to help you avoid bankruptcy.
(more…)In the USA going bankrupt does not have the same level of stigma as it does in the UK and Ireland. In fact, for a small businessman to go bankrupt is almost like a badge of honour in America, because of the forgiving nature of the business environment there and the high regard in which entrepreneurs are held , even those who have tried and failed. Bankruptcy in the UK is almost like a kiss of death for anybody in business. It takes many years to recover from it and particularly in the area of repairing one’s credit worthiness.
(more…)If have money worries, it makes sense to know as much as you can about the various financial solutions available to you. If you are insolvent, one of the available financial solutions is an Individual Voluntary Arrangement otherwise known as an IVA. This short article explains in simple terms what an IVA is and deals with the most frequently asked questions about IVAs.
(more…)If you are unable to pay your debts as they fall due or have fallen behind in your payments to creditors then you may have already begun to suffer from creditor harassment. It often starts with innocent looking reminder letters and then slightly more aggressive ‘overdue’ letters.
(more…)Many people who entered into Individual Voluntary Arrangements (IVAs) three or four years ago may be worried that their IVAs may fail because of the sharp fall in property values in the meantime. In many cases the IVA proposal, while being largely based on monthly contributions from income, also offered to re-mortgage the debtor’s property in the fourth or fifth year of the arrangement and to contribute a lump sum to the IVA from the equity released by the re-mortgage.
(more…)While a Debt Management Plan (DMP) can last quite a short time (a few years), most DMPs last much longer and a duration of ten years would not be unusual. For one in four people entering a DMP, the projected life would be in that sort of range. It really depends on the debtor’s personal circumstances. However, the Debt Management Company used by the debtor should be able to estimate the likely length of the arrangement, once it has received all the relevant information – amount of debts, income and expenditure and so on.
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