Insolvency Explained

What is insolvency?

Insolvency basically means that you are unable to make payments towards your debts.

Many people struggling with substantial amounts of debt think that Bankruptcy is their only option – but it’s not!

Become legally protected with an IVA

If you have debts of £15,000 or more, an IVA could be the answer to your debt problems. An Individual Voluntary Arrangement is a legally binding agreement between you and your creditors, which also provides protection from court action as you work towards clearing your debts.

Many people with large unsecured debts prefer to enter into an IVA than to declare bankrupt, particularly since an IVA – if accepted by your creditors – leaves you in control of major assets such as your house. Providing you keep to the terms of the arrangement, you could become free from unsecured debts included in the arrangement usually at the end of 60 months*. [Make sure the caveat about releasing equity is at the bottom of the page]

If you have tried to cut back on living expenses and are still finding it difficult to repay your debts, call our friendly experts to find out if you qualify for an Individual Voluntary Arrangement.

The Insolvency Register

Your credit rating will be affected in the medium to long term if you go ahead with an IVA, which could harm your ability to secure credit in the future.
If you have a history of missed or late payments, then your credit rating may already be affected.

Don’t go through debt alone – call Baines & Ernst for help and advice:

*For an IVA to be approved and interest and charges to be frozen it needs to be accepted by 75% of the creditors (by value). Homeowners may be required to re-mortgage after 4 years and release available equity to pay off some or all of the debt. Your credit rating will be affected for up to 72 months. Failure to adhere to an IVA may result in bankruptcy.