At Abacus Solicitors we are committed to acting quickly and efficiently in your matter and understand that bankruptcy is an incredibly stressful process.
Most individuals realise at a relatively early stage that bankruptcy is a risk. For some a creditor will threaten bankruptcy proceedings, for others it may seem that bankruptcy proceedings are the only option available to your creditor.
Addressing the issue at an early stage can save you thousands of pounds as well as the worry and stress of going through the bankruptcy process. We are here to help prevent a Bankruptcy Petition being issued against you. You have a number of options available to you:
The simplest and easiest action to take in avoiding bankruptcy proceedings is to repay the debt. We can assist you in repaying the sums owed to creditors or act on your behalf in securing finance to repay your debts.
We can assist you in negotiating with your creditors and arranging an informal payment plan. Sometimes solicitor involvement can add weight to an offer to your creditors and show that you are determined to have this matter resolved.
If you dispute the petition, concisely setting out your argument at this stage can prevent insolvency proceedings from escalating any further. For further details in defending a petition please click here.
- Administration Orders
If one or more of your creditors has obtained a County Court Judgment against you, the County Court may make an Administration Order. Administration is a Court-based procedure where you make regular payments to the Court towards the total sum you owe your creditors.
Your total debts must not be more than £5,000 and you will need enough regular income to make weekly or monthly repayments.
You make monthly payments to the Court, based on what you can afford and the Court distributes the money to your creditors.
We can act on your behalf in making an application for an Administration Order and help you prevent bankruptcy on this basis.
- Individual Voluntary Arrangements (“IVA”)
An IVA is a formal debt payment arrangement. It is generally appropriate for people who cannot make their monthly repayments in full but who do have some money to give their creditors each month.
If your creditors agree to an IVA, some of your debt may be written off. An IVA is legally binding on you and your creditors, and if you break the terms of the IVA you could be made bankrupt.
It is usually better and cheaper for you to set up an IVA before you become bankrupt but you can propose one afterwards.
An Insolvency Practitioner is required to draft and supervise your IVA. We can assist you in finding a suitable practitioner to take your case.
- Debt Relief Orders (DROs)
A DRO is a formal insolvency process that is aimed at people who cannot pay their debts and who have no assets, a low income, no other access to debt relief and no prospect of the situation improving.
You can apply for a DRO if you owe up to a maximum of £15,000; your total gross assets must not exceed £300 and after taking away tax, national insurance contributions and normal household expenses, your disposable income must not exceed £50 a month.
If a creditor is currently petitioning for your bankruptcy you must get the creditor’s permission before applying for a DRO.
DROs are run by The Insolvency Service in partnership with skilled debt advisers, called approved intermediaries, who will help you to make your application. You cannot apply for a DRO without the assistance of an approved intermediary.