Keeping the peace with your creditors
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At any time an owner-driver and/or partnership may run into cash-flow problems. Creditors are pressing you for payment. You are pressing your creditors for payment. Which creditor clo you pay first? If only you had some breathing space to trade through and collect money owed to you... One remedy is to seek what is known as an individual voluntary arrangement (IVA). This enables you to put forward a proposal to pay your creditors and, if required, to allow you to trade on without creditors banging on the door. To apply for an IVA you have to seek the consent of a licenced insolvency practitioner, usually an accountant, to present the proposal to your creditors. This proposal must contain details of your assets and liabilities as well as the offer being made to your creditors.
This might simply be income contributions over a period of time (usually three years but it can be longer); the sale of assets over a period of time; or both.
As soon as your proposal has been agreed an application can be made to the court for an interim order. As long as this order is in force it will stop any bankruptcy petition being presented or proceeded with. it will also stop other proceedings or execution or other legal processes being started or continued against your property without permission from the court.
A meeting of creditors has to be called within seven weeks. If threequarters of the creditors in value agree to your proposals their acceptance will be binding on the rest: this avoids the possibility of subsequent bankruptcy.