Personal

Debt Management and/or Informal Scheme / Deed of Arrangement

• Debt Management - Informal Scheme
  • Re-scheduling of Debt repayments
  • Settlement by compromise
  • Only realistic for few Creditors (in number)
• Deed of Arrangement
  • An alternative (but similar) to Debt Management/Informal Scheme
  • A rare requirement, but utilised if required by Creditors

Bankruptcy

• The statutory route (which can be initiated by the Debtor or the Creditors) whereby a Trustee is appointed to realise the assets (if any) and distribute dividends (if any) to Creditors.
• This frees the debtor from all debts and, in normal circumstances, the debtor is discharged from the Bankruptcy after 12 months.
• Payments from ongoing income are normally required for a period of 3 years.

Individual Voluntary Arrangement

• The most popular alternative to Bankruptcy whereby an individual proposes an agreement to creditors to delay or compromise/reduce the payment of debts over a specified period
• It is available for both Business and Consumer debts.
• Requires 75% (by value) agreement by Creditors and, if approved, becomes binding on all Creditors.
• In most circumstances monthly/annual Voluntary Contributions are required from the debtor (in addition to any recoverable assets) during the course of the Arrangement