• There is life after debt

    Do Not Panic

    There is life after debt

There are currently three formal insolvency procedures available to people with personal debt problems. The law makes no distinction between people with consumer credit debts (credit cards, store cards and bank loans) and those whose debts arise from their trading as a sole trader or in a partnership.


You are not bankrupt simply because you cannot pay your debts. A person is officially a bankrupt if the Court makes a Bankruptcy Order against them. It is unlikely that a person could be bankrupt without knowing it has happened, as documents telling them about the Court hearing generally have to be personally served on them, in advance.

Read more about Bankruptcy ››

Individual Voluntary Arrangement (IVA)

An IVA is a binding arrangement that a person enters into with their creditors as an alternative to bankruptcy. It is similar to bankruptcy in some ways, but very different in others. Unlike in bankruptcy, the individual can choose their practitioner and put forward a deal that is most appropriate to their own circumstances. However, their offer is only likely to be acceptable if it meets certain “industry standard” expectations on the part of creditors.

Read more about Individual Voluntary Arrangements ››

Debt Relief Orders (DRO)

In April 2009 a new process, Debt Relief Orders, became available for those persons who owe less than £15,000 and have no significant assets and nominal surplus income. Similar to bankruptcy (known in the industry as “bankruptcy lite”), DROs will bring much needed relief to those on low incomes struggling to repay their debts.

Read more about Debt Relief Orders ››

People can also enter into informal arrangements and debt management plans (DMPs) with their creditors.

No matter how your debts were incurred, everyone with debt problems face similar practical issues:

  • What will happen to my home?
  • Will I have to make a monthly payment and how will it be calculated?
  • What will happen to my bank account?
  • Will bailiffs visit my house?
  • What will be the effect on my credit rating?
  • Will my employer find out I am insolvent?
  • Can I sign my home over to my husband or wife before I go bankrupt?
  • Can I carry on running a business?

These are some of the issues you should be seeking to discuss with your professional advisers before you decide which option is best for you. It is vital that you fully understand the implications of the course of action you are being advised to take.



The Insolvency Service 'Guide To Bankruptcy' 
This guide tells you what happens if you are made bankrupt in England and Wales.
Link to www.gov.uk ››


The Insolvency Service 'Options for paying off your debts'
Guidance on possible alternatives for those that find themselves in debt.
Link to www.gov.uk ››


All contents Copyright © PCR (London) LLP unless otherwise noted. None of the elements on this website may be reused without permission.