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Personal Insolvency Options

Conselia offers compassionate and professional personal insolvency solutions for individuals facing overwhelming debt.
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Individual Voluntary Arrangement (IVA)

An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors to repay debts in a manageable way, avoiding bankruptcy.

An Insolvency Practitioner (IP) acts as your Nominee, helping you prepare a repayment proposal for your creditors. If approved, the IP becomes your Supervisor, ensuring you follow the agreed terms.

An IVA may not be a suitable option in all circumstances. Fees apply and your credit rating may be affected. If you are interested in discussing your personal financial options, including the possibility of an IVA, please contact us directly.

Who can use an IVA?
  • Individuals with significant personal debts.
  • Those with liabilities from personal guarantees or business-related debts, including partnerships.

Repayments typically come from your income over a number years, a third party contribution which would otherwise not be available to your creditors (i.e. funds introduced from a friend or a relative) or from selling surplus assets.

An IVA is completely flexible and often provides a better outcome for creditors than bankruptcy but requires 75% of your creditors (by value) to approve your IVA proposal.

Some Key Benefits of an IVA
  1. Debt Relief and Control:
    • Reduces monthly payments to an affordable level.
    • Consolidates multiple debts into a single, manageable payment.
  2. Stops Creditor Action:
    • Legally protects you from creditor harassment, court action, or bailiffs once the IVA is in place.
    • Freezes interest and charges on debts included in the IVA.
  3. Avoids Bankruptcy:
    • Enables you to retain control over your finances and avoid the stigma and restrictions associated with bankruptcy.
  4. Protects Assets:
    • Homeowners often avoid forced sale of their property. While equity may need to be considered, full property sales are rare unless voluntarily offered.
  5. Flexible Contributions:
    • Contributions can be adjusted if your financial circumstances change during the term of the IVA.
  6. Protects Professional Status:
    • Some professions that restrict bankruptcy (e.g., legal or financial roles) may allow an IVA.

It should be noted that if you enter into an IVA, which subsequently fails, it is likely that you will subsequently face formal bankruptcy proceedings.

Bankruptcy

Bankruptcy is a court-driven process that may be the most effective route to a debt-free future for some individuals.

How does it work?
  • You can apply for bankruptcy yourself online (cost: £680 as at 2024).
  • Creditors owed £5,000 or more (as at 2024) can also apply to make you bankrupt.

When you are made bankrupt your assets will automatically vest in and be managed by the Official Receiver (“OR”), whose role is to sell them and repay creditors. The OR may also choose to appoint an external Insolvency Practitioner to act as Trustee to assist with the bankruptcy process.

It is important that if you are made bankrupt you comply fully with the instructions you are given by the OR/Trustee.

Key Bankruptcy Restrictions:
While bankrupt, you must follow specific rules, such as:

  1. Borrowing Money:
    • You cannot borrow more than £500 without informing the lender about your bankruptcy.
  2. Acting as a Company Director:
    • You cannot act as a director of a company or be involved in its management without court permission.
  3. Creating, Managing, or Promoting a Company:
    • You cannot create, manage, or promote a company without court approval.
  4. Running a Business with a Different Name:
    • If you trade under a different name, you must disclose your bankruptcy to anyone you do business with.
Key Points to Note:
  1. Bankruptcy typically lasts 12 months, after which you are discharged from most debts. If you do not cooperate with the OR/Trustee this period can be extended.
  2. Your Trustee can continue using your assets to pay debts after discharge.
  3. If you have surplus income, you may be required pay the surplus into your bankrupt estate for up to 3 years.
Bankruptcy Restrictions Order (BRO):

If you are found to have acted dishonestly or irresponsibly in managing your finances, a BRO can extend restrictions for 2 to 15 years. Examples of misconduct include:

  • Concealing assets.
  • Giving away property before bankruptcy to avoid it being included.
  • Failing to cooperate with the official receiver or trustee.
Duties During Bankruptcy

While bankrupt, you must assist the official receiver or trustee in investigating your financial affairs, including:

  • Providing accurate information about your assets and debts.
  • Attending interviews as required.
What Our Customers Say About Us
Compassionate Advice "Facing my financial position was overwhelming, but Conselia provided me with clear guidance and support. They were professional, approachable, and always explained the process in a way I could understand. Thanks to their expertise, I was able to regain control of my finances and start fresh. Highly recommended!"
- IVA Client
A Lifeline During Tough Times "I can’t thank Conselia enough for helping me through such a difficult period. Their team was understanding and completely non-judgmental, providing solutions tailored to my situation. They made what felt like an impossible challenge manageable."
- IVA Client
Efficient, Transparent, and Supportive "From our first conversation, Conselia made me feel reassured and in safe hands. They handled everything efficiently and were transparent about every step. I now have peace of mind and a clear path forward, and I’m so grateful for their support."
– Company Director
Expert Guidance That Made All the Difference "Dealing with insolvency is never easy, but Conselia turned a stressful situation into a manageable process."
– Company Director
Professionalism You Can Trust "I was hesitant to seek help, but Conselia put my mind at ease right away. Their professionalism, knowledge, and understanding were second to none."
– Company Director

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