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THE WORK OF AN INSOLVENCY PRACTITIONER
Page 32
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An insolvency practitioner will initially explore ways of dealing with the debt short of embarking on the draconian process of going bankrupt. There are three ways of doing this.
1 your creditors to see if you can reach a compromise over repayment. The first is through an informal arrangement where you write to
The disadvantage of this is that it is not legally binding, so the creditors could demand full payment at a later date.
The second, for debts of less than £5,000, involves a county court making a judgment against you, caked an administration order, where you make regular payments to the court towards what you owe.
The third is an individual voluntary agreement (IVA). This is a formal arrangement and must involve a licensed insolvency practitioner. The practitioner will help you devise a plan to pay off your creditors, and if 75% of them agree to this proposal it will be endorsed by the courts as a legal agreement that will bind every creditor to this method of repayment.
IVAs have the advantage of avoiding the stigma of bankruptcy, are generally cheaper than going bankrupt and give you more say on how you assets are dealt with.
If none of these methods work, you can file for bankruptcy by approaching the nearest county court with bankruptcy jurisdiction and paying a fee of £150 plus £345 for the official receiver's work. Alternatively, if you have unsecured debts of more than £750, your creditors can file for bankruptcy against you.