MENU

Personal Insolvency Solutions

Tailored debt solutions for those experiencing financial hardship

Are you at the stage where you are afraid to open your post? Does the sound of the door knocking fill you with dread? The first step to resolving debt concerns is to contact one of our friendly team to discuss your concerns.

When financial problems start to mount, asking for help can be the hardest thing to do. But it is often the most critical. That is why we offer a free no-obligation consultation. Our experienced insolvency practitioners have helped many people like you take the first step to rebuild their financial future. And with offices across the southeast, the help and advice that makes all the difference could be just around the corner.

Debt advice comes in many forms. At BEACON we provide independent advice, so our help is guaranteed to be impartial and tailored to suit you; realistic to help you get back on track. 

Losing your home and bankruptcy are not inevitable with insolvency - even where your liabilities are considerably more than your assets. As experienced insolvency practitioners, we can often persuade creditors to agree a practical and achievable individual voluntary arrangement (IVA) or debt management plan.

Personal Insolvency Options

Debt Management Plans (DMP)

Unable to pay your debts?  Is your monthly credit commitment too much?

If you are unable to pay your debts as they fall due each month, you could enter into a DMP and at BEACON we can guide you as to how best to write to your creditors to see if a compromise and/or monthly payment can be reached/agreed. 

This can include a timetable of when and how much you can pay on a monthly basis. 

If you have enough money left over after paying your priority creditors and essential expenses, you may be able to arrange a DMP with your other unsecured creditors. 

A DMP is an informal arrangement with your creditors. DMP’s are seen as flexible plans that can be amended as and when required.  

A DMP is not always the best way of dealing with the debts as your creditors are not bound by the arrangement that you have entered into.  

A DMP is informal and creditors can change their mind at anytime. There is also no guarantee that creditors will agree to freeze all interest and charges.

Creditors may only accept a DMP as a short-term measure; unless they know from the outset that your financial situation is unlikely to change.

DMP’s are normally used as a short-term fix in certain situations.

We do not operate DMP's but we will provide you with details of responsible charities who can assist you with a DMP.

Administration Order

Has one or more of your creditors obtained a County Court Judgment (CCJ) against you? 

If yes, the County Court can make an Administration Order.  

An Administration Order is a Court based procedure where you make regular payments to the Court towards the repayment of your creditors.

An Administration Order is only an option where your total debts do not exceed £5,000.

The Insolvency Service, have produced a guide in respect of Administration Orders.

For more information call us on 02380 651441

Debt Relief Orders (DRO)

DRO’s are an alternative to Bankruptcy.

If you owe less than £20,000 with little or no surplus income and little or no assets, a DRO can be a cost effective way of escaping the stress and burden of debt.

To be eligible for a DRO the debtor:

  • Must be unable to pay their debts.
  • Have total liabilities (not including unliquidated or excluded debts) not exceeding £20,000. Secured debts do not qualify but count towards the £20,000 limit.
  • Have gross assets not exceeding £1000 as determined by resale value. Household bedding, furniture, tools and motor vehicles worth less than £1000 are excluded. Total allowable asset value is £1000 plus vehicle value of up to £1000.
  • Have disposable income, following deduction of normal household expenses for reasonable domestic needs, not exceeding £50 per month.
  • Must be domiciled in England or Wales, or in the last 3 years have been resident or carrying on business in England or Wales.
  • Must not have had a DRO approved within the last 6 years.
  • Must not be involved in any other formal insolvency procedure at the time of application for a DRO such as: an undischarged bankruptcy order, a current Individual Voluntary Arrangement, a current Bankruptcy Restrictions Order or Bankruptcy Restrictions Undertaking, a current Debt Relief Restrictions Order or Debt Relief Restrictions Undertaking, an Interim Order.

The Insolvency Service have produced a guide in respect of Debt Relief Order’s.

For more information as to whether a DRO is right for you, contact us on 02380 651441.

Bankruptcy

Bankruptcy is sometimes the right and best solution to an overwhelming debt crisis.

Before you take this step – it is imperative that you seek independent advice to make sure this is the right option for you.

Bankruptcy is a Court Order, and once you have been made Bankrupt you do not deal with your creditors. An official person, called the Official Receiver, will take control and deal with your creditors.

The Official Receiver will not only deal with your creditors, but will also take control of your assets (money and property). This is because, as a general rule, upon the making of a Bankruptcy Order, your assets (money and property) are no longer yours.

Is Bankruptcy the right option for you?

You may want to think about Bankruptcy if you have no money to pay your debts.

When Bankruptcy is over you can make a fresh start and the debts you had are usually written off. In many cases Bankruptcy can end in as little as one year.

The Association of Business Recovery Professionals, R3, have produced a guide in respect of Bankruptcy’s for creditors.

The Insolvency Service have produced a guide in respect of Bankruptcy’s for insolvent persons.

For more information as to whether Bankruptcy is right for you, contact us on 02380 651441.

Individual Voluntary Arrangement (IVA)

An IVA is a formal arrangement between you and your creditors.

Once approved it is legally binding on your creditors; your creditors will not be able to continue to levy interest and charges against you; your creditors will not be able to change their minds.

IVA’s are often a viable alternative for those wishing to avoid Bankruptcy; this could be because of your employment status or protection of your family home.

An IVA is a contractual arrangement with your creditors and is tailored to your particular circumstances. The payments in an IVA can be made from any of the following; income, capital, third party contributions or a combination.

It is generally more appropriate for people who cannot make their monthly credit commitments in full each month, but do have some disposable income to pay to their creditors.

If creditor’s agree to your IVA, some of your debt may be written off upon the successful completion of the IVA. The amount written off is wholly dependant upon your personal circumstances.

An IVA can give you more say as to how your assets are dealt with and how payments are made to your creditors.

How long does an IVA last?

This will depend upon your personal circumstances, but most standard IVA’s are based on monthly payments being made for 5 years; but if you own your home this may be extended to 6 years to ensure that you do not lose your home.

When will an IVA end?

Generally, when all sums due under the agreed IVA have been paid.

The Association of Business Recovery Professionals, R3have produced a guide in respect of IVA’s. 

At BEACON we are experts at proposing IVA’s to creditors to ensure that they are they are the best option for both you and your creditors.

To find out if an IVA would be right for you – contact us on 02380 651441 or email Cheryl at cheryl@beaconllp.com

Credit Rating

It should be noted that a default, a county court judgment, a debt relief order, an Individual Voluntary Arrangement or Bankruptcy all have a mark against a credit record and remain logged for 6 years.

Individuals and Sole Traders

Any debts owed by an individual or sole trader are treated the same; there is no distinction between business creditors and personal debts. In Insolvency business creditors and personal debts are treated the same and are entitled to a share of your business and personal assets and property. 

Are you the Spouse, Partner or Joint Owner? Is your spouse, partner or joint owner facing Bankruptcy?

At BEACON we can offer advice and assistance to help you through this difficult period. We can advise of the implications of Bankruptcy of your spouse, partner or joint owner, on you.

Are you owed money?

At BEACON we can advise the best approach to recover your money; and this may be via Bankruptcy. We can also advise any creditor in a Bankruptcy how the Bankruptcy process works, and ascertain whether as a creditor you likely to recover any of the debt owed.

Personal Insolvency FAQs

Who or What is an Insolvency Practitioner (“IP”)?
  • An IP is a qualified person duly licensed and regulated by a Recognised Professional Body.

  • An IP can act in certain defined roles that no person, unless they are a licensed IP, can act.  The most common of these roles are; Nominee of a Voluntary Arrangement  Supervisor of an Voluntary Arrangement, Trustee in Bankruptcy, Liquidator, Administrator and Administrative Receiver. 

  • Click here to see the Team and IP’s at Beacon.
What is a Recognised Professional Body (“RPB”)?
  • In accordance with The Insolvency Act 1986, the Secretary of State recognises and authorises particular professional bodies to become RPB’s. 
  • RPB’s have the role of authorising IP’s and also acting as their Regulatory Bodies to ensure that they remain fit and proper to act as an IP.
  • The IP’s at Beacon are regulated by the Institute of Chartered Accountants in England & Wales and the Insolvency Practitioners Association.
What is the role of an Insolvency Practitioner (“IP”) when providing initial advice?
  • In this situation an IP is a mediator between you and your creditors and will be acting in the best interests of both you and your creditors with a view to seeking the best way forward. 
  • An IP is required to consider and provide the best advice to you in your personal circumstances.
What is an Individual Voluntary Arrangement (”IVA”)?
  • An IVA is a formal insolvency procedure, and forms a legally binding agreement between you and your creditors, as such an IVA is not something to be entered into lightly. 
  • An IVA allows you to repay creditors over a period of time.
  • An IVA is a flexible procedure that is tailored to suit the personal needs and requirements of you and your creditors. 
  • An IVA is usually an agreement that lasts for either 5 or 6 years whereby payments are made on a monthly basis (but could be a lump sum or a combination of monthly payments and lump sum).
  • Please click here to email the IP to request a free initial consultation.
How much will I have to pay into an IVA?
  • This is wholly dependant upon individual personal circumstances. 
  • Any payments are calculated on ‘what is reasonable’ between you and your creditors and also what is reasonable for you to afford based on your income. 
Will I have to pay my creditors in full?
  • Despite the adverts stating that “there is a little known piece of government legislation that allows you to write off 75% of your debts” this is not in fact accurate in all cases. 
  • An IVA is not a vehicle to simply write off debts which you can afford to repay. 
  • If you can afford to repay your creditors in full then you will be required to repay your creditors in full. 
  • If you cannot afford to repay your creditors in full and over the period of time proposed by an IVA you can only afford to repay, say, 25% of your creditors debt, then that is what can be proposed. 
  • The IP will calculate what they consider creditors will accept in your circumstances.
How much does an IVA cost?
  • This depends on the circumstances of each case, and the IP will provide you with the estimate once the circumstances of the situation are known, as the IP will need to consider what is involved in the work to be undertaken.
  • As a rule, creditors dictate what an IP can receive and IP’s will propose fees that are likely to be agreed by creditors and such costs are deducted from the total funds to be paid throughout the IVA and not in addition to.
I want the IP to look at my circumstances to see if I am eligible for an IVA?
  • Please click here to email the IP to request a free initial consultation.
What is Bankruptcy?
  • Bankruptcy is a formal insolvency procedure.
  • You can apply for your own Bankruptcy, or if you owe someone more than £5,000 they can also apply for your Bankruptcy for non-payment. 
  • Bankruptcy is considered the most severe of all personal insolvency options, as there are serious consequences to Bankruptcy that do not exist in other options. 
  • You can now apply online to petition for your own bankruptcy, click here to be directed to the relevant government site where you can do this. 
  • To make a Bankruptcy application it costs £680.
  • Once Bankrupt the Official Receiver at The Insolvency Service will consider and look at your circumstances and will either retain your Bankruptcy case and deal with it or they will seek to appoint an independent IP to do so. 
  • In most cases you will be ‘discharged’ from Bankruptcy after 12 months. 
  • Your income will be reviewed to ascertain whether you can make a monthly payment towards your Bankruptcy for a period of 36 months (3 years)
Do I have to do anything?
  • No one needs to do anything, you can simply do nothing, allow things to continue as they are and see where it ends up. 
  • This does mean you will not have any control over the situation and it is more likely you will end up with debtor collectors at your door and/or Bankrupt.
What is a Debt Relief Order (“DRO)?
  • A DRO is in effect ‘Bankruptcy’ for people with lower debts and income. 
  • A DRO is costs a non-refundable £90 which is paid to the Official Receiver at the Insolvency Service, and not paid to the DRO approved intermediary.  An approved intermediary cannot charge you for their time in assisting you with a DRO application. 
  • A DRO is generally applicable for persons who; 

✓ Cannot pay your debts

✓ Owe no more than £30,000

✓ Do not own property, including your own home

✓ Do not own or have any assets of value

✓ Have little to no surplus income.

  • Only an approved intermediary can make an application for a DRO for you.  At Beacon we have a duly appointed approved intermediary who can do this.  Please click here to make initial contact for this
  •  
What is a Debt Management Plan (“DMP”)?
  • A DMP allows you to make an affordable monthly payment, very much akin to an IVA, but with no end date.  
  • A DMP is not a legally binding agreement, and creditors are not obligated to cease interest and charges being levied on the debts due.
  • Creditors are also at liberty to change their minds at any time and request more money than that originally agreed in the DMP.  
  • But for all that DMP’s are an option, and as they are not governed by the strict rules and regulations that formal insolvency procedures are, it is worth considering for that very reason.  
  • You do not need to employ anyone to administer a DMP for you, as anyone is at liberty to administer their own DMP. 
  • At Beacon we do not offer the facility to undertake DMP’s expect in certain strict circumstances whereby the end goal is an IVA. 
  • There are several debt charities that will undertake assistance with DMP’s with no payment from you for doing so.

CALL US NOW

The earlier you act, the sooner we can put you back in financial control. Call your local BEACON office today to arrange your free initial consultation and find out about your personal insolvency options. With BEACON, you discuss your affairs with an experienced insolvency practitioner, not a call-centre.