IVA – If bankruptcy petition is outstanding

An Individual Voluntary Arrangement (IVA) is normally a five-year agreement with your unsecured creditors that helps you avoid bankruptcy. You get protection from those creditors and you only pay back a proportion of your unsecured debts and write the rest off. If you’ve been petitioned for bankruptcy and you’re worried about your debts, PayPlan can help you.  Call us now on 0800 280 2816 or, if you’d prefer, click the “Get advice now” button to request a call back.

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PayPlan help people in debt

Over the last twenty years, PayPlan have helped millions of people who were having difficulty in paying their debts.

Everyone’s circumstances are unique, and our experienced advisers will be able to suggest next steps for you no matter what your financial situation.

This page outlines a very specific case study: where clients (two business partners) were able to enter into an IVA even though a bankruptcy hearing had already been scheduled. They were able to ultimately avoid bankruptcy and repay only a proportion of their unsecured debts after we set up an IVA for them.

IVA case study – outstanding bankruptcy petition

We helped the partners in a Partnership who ran a hairdressing salon. They contacted us only two weeks before their bankruptcy hearing, owing over £100,000.

The business had suffered due to ill-health and they were using credit to pay for living expenses.  We arranged for the bankruptcy hearing to be postponed and put forward an IVA proposal.

We demonstrated to the creditors that the IVA would provide a better return, as the current economic climate may result in the business not realising its full value in sale.   The partners paid £400 a month each to their IVAs which lasted five years.

The creditors approved the IVA and the bankruptcy petition was dismissed. The clients’ income improved and their home and salon weren’t sold – which almost certainly would have been the case with bankruptcy. Creditors agreed to write off more than £75,000 of their unsecured debt and reduced their monthly debt payments by more than £3,000.

These clients have since made every payment to their IVA.

An IVA may help you, even if you have an outstanding bankruptcy petition

Are you serious about getting out of debt?

Successfully completing an IVA means avoiding bankruptcy and not having to deal with any more unsecured creditor demands for payment. You’ll normally make just one affordable payment for a set period of time, and creditors included in the IVA must freeze interest and charges at the point your IVA is agreed.

Become a PayPlan IVA client and you get:

  • A personal debt adviser to handle your IVA case
  • Just one regular payment to make, based on what you can afford to pay
  • All the support of a company who have, over the last twenty years, helped tens of thousands of people achieve debt-free status through an IVA
  • After the agreed IVA period, whatever unsecured debt remains is written off

And remember, at PayPlan, we do not charge any upfront fees for setting up an IVA.

However you must bear in mind that if you were, for whatever reason, to stop making payments to your IVA then your plan may fail; in which case your creditors may re-apply interest and charges (which were frozen at the point your IVA was approved) or may even petition for your bankruptcy. Read more about the pros and cons of an IVA.

Want to avoid bankruptcy? Think an IVA could help you manage your debts more affordably? Many people choose to call us on 0800 280 2816 for free no-obligation debt advice, while others prefer to fill in our online Debt Help form so we can call them back.