Personal debt

Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA) is an insolvency procedure where an individual (debtor) makes an offer to the creditor(s) (those owed money) to agree to pay amounts due to them in part or in full. It can provide the debtor with legal protection against claims in relation to debts. It is a legal procedure that provides protection from creditors, forming a binding agreement with them. This binding agreement will set out how the debtor’s debts and liabilities will be dealt with.
  • It allows an individual to continue life as normal
  • It can offer protection over personal assets
  • It usually allows an individual to maintain control of their business interests
  • It offers a structured solution for dealing with creditors based on a realistic and affordable plan.
IVA’s are often an alternative to Bankruptcy and debt management plans. An assessment of an individual’s income, expenditure and debts is first made before a proposal document is drafted. This will be based on individual circumstances and is unique to the individual’s situation. We can help with getting legal protection in place to allow time to consider the proposal. The proposal needs to be approved by 75% of the creditors by value of debt for the IVA to be accepted.  At this stage all creditors are bound by its terms. Note that not all debts can be included.
  • It enables you to avoid bankruptcy

  • All debts included in the IVA are frozen providing you legal protection so no more interest or charges can be added by your creditors

  • The amount paid to creditors will be based on what you can afford

  • An IVA provides you with a structured plan over a fixed period enabling you to regain financial control;
    After the fixed period any remaining unsecured debts are usually written off
If you are considering bankruptcy or are being threatened with being made bankrupt, then please call us for free and confidential initial advice on finding the right solution for you.


Bankruptcy is the term used for the formal procedure that can be applied for by individuals who cannot pay back their debts. An individual can apply to for his or her own bankruptcy or a creditor (someone they owe money to) may apply to make the individual bankrupt.  This can result in the making of an order for bankruptcy by the Court. Following the making of the order, all of a bankrupt’s assets vest in his or her Trustee (usually with the exception of everyday household goods and the bankrupt’s tools of the trade). A Trustee will be appointed to realise the assets for the benefit of the creditor(s). Following changes in the law (the Enterprise Act 2002), individuals may in appropriate circumstances obtain a discharge from Bankruptcy after 12 months.
Bankruptcy enables an individual to write off most of their debts and therefore have a fresh start. It also means:
  • You no longer have to deal with your creditors removing this pressure

  • Your creditors will no longer be able to take any legal action in respect of the amounts you owe

  • You are allowed to keep a reasonable amount of your income to live on

  • You are allowed to keep certain household items and tools you need for your work
Bankruptcy may not be your only or the best option for your circumstance. If you have been made bankrupt or are thinking of making yourself bankrupt, please contact us for further assistance and advice on the available options.

Debt Relief Orders

A Debt Relief Order (DRO) is an option for dealing with debts for individuals who:
  • Owe an amount of £20,000 or below; and
  • Do not own their own home;
  • Do not have a financial interest in any other property or assets.
To obtain a DRO an application must be made, and a fee paid to the Official Receiver. It is important to note that even if a DRO is approved, not all debts are covered. To find out more or to discuss if you may be eligible for an application for a DRO or a debt write off, please contact us for a free and confidential initial consultation.

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If you are experiencing debt problems and would like some assistance, please contact us to book a free confidential consultation

If you are experiencing debt problems and wondering how to clear some of the debts you have incurred, please contact our friendly team for advice.

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The Creditors’ Guides to Fees provide explanations of creditors’ rights with regard to insolvency practitioners’ fees:

Insolvency Practitioners M G Mistry and H Mistry are authorised and regulated by the Insolvency Practitioners Association, and where appointed as Administrators of a company act only as agents of the company and without personal liability. Horsfields Ltd have in place appropriate Professional Indemnity Insurance