Quick facts are a section of our website we have dedicated to our website to provide you with quick summaries of various Insolvency topics. Please note the information here is not comprehensive and does not serve as advice.

  1) Bankruptcy

  2) Individual Voluntary Arrangement

  3) Protected Trust Deed

  4) Sequestration

  5) Debt Management Plans

  6) Personal Financial Statement

  7) Company Voluntary Arrangement

  8) Administration Orders

  9) Debt Relief Orders

Quick Facts about Bankruptcy

Bankruptcy is an option that is considered when an individual cannot pay their debts as they fall due.

Bankruptcy frees you from overwhelming debts so you can make a fresh start, subject to some restrictions

A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order (there is the possibility that in some cases the bankruptcy discharge period will be less than one year).

Bankruptcy will probably result in the loss of your home, if you have equity in it.

Bankruptcy is public, so your name and address will be published in your local newspaper.

Bankruptcy is a serious matter; therefore you should seek advice and consider alternatives before making your petition.

Currently the cost of petition petitioning for bankruptcy is about £510 (which breaks down into a court fee of £150 and £360 which is the cost of administering your bankruptcy.

Quick Facts about Individual Voluntary Arrangements (IVA)

An IVA is a debt solution for people who find themselves in serious financial difficulty.

An Individual Voluntary Arrangement (IVA) is a contract between you and your creditors. You pay an agreed monthly sum, usually for 5 years. This is divided up between people you owe money to, who accept the sum in settlement of the amount you owe them.

 If your creditors agree to your proposal Interest on your debt will be frozen by law

 Individual Voluntary Arrangement (IVA) has to be set up by a licensed Insolvency practitioner

Your need to meet certain financial requirements to qualify for an IVA, therefore you need to speak to a debt adviser before filling this form to be absolutely sure.

DICUS can help you draft your statement of financial affairs which the Insolvency practitioner requires in order to begin working on your case.

Quick Facts about Protected Trust Deed

A Trust Deed (or Protected Trust Deed) is a government backed scheme drawn up between you and your creditors in which you agree to pay your creditors a percentage of your total debts, depending on what you can afford. 

 It is very similar to the IVA which is available in England, Wales and N. Ireland except the Trust Deed usually lasts 3 years, not 5 years.

It offers debtors an alternative to bankruptcy.

Your protected trust deed is supervised and set up by a licensed insolvency practitioner. 

Your need to meet certain financial requirements to qualify for a Trusted Deed, therefore you need to speak to a debt adviser before filling this form to be absolutely sure.

DICUS can help you draft your statement of financial affairs which the Insolvency practitioner requires in order to begin working on your case.

Quick Facts about Sequestration

Sequestration is personal bankruptcy in Scotland. There are certain requirements which must be fulfilled before you can do this

In bankruptcy, the Accountant in Bankruptcy (a court official) administers your “estate” on behalf of your creditors, making payments to them, for a period of three years.

Debtors will be discharged from bankruptcy after one year instead

It costs £100 to petition for bankruptcy in Scotland

Quick Facts about DMPs

DMP stands for debt management plan. This is an informal debt repayment agreement with your creditors to reduce the amount you pay to them each month so that the payments fit within an affordable monthly budget.

Interest can be frozen but this is not guaranteed.

The term is open-ended and can be many years

A statement of your financial affairs adjusted to show what you can actually afford presented to your creditor is a great way to begin the process and prove to them of your financial difficulty.

Quick Facts about CVAs

A corporate voluntary arrangement is when a company makes an agreement with its creditors by proposing a 'composition in satisfaction of its debt' or a 'scheme of arrangement of its affairs'.

It is an IVA for companies.

This means an arrangement, approved by the court, in which the company has formally agreed terms with its creditors for the settlement of its debts. 

A corporate voluntary arrangement may be proposed by:

• the administrator, if there is an administration order;
• the liquidator, if the company is being wound up; or
• The directors, in other circumstances.

DICUS can help with drafting the case for a company voluntary arrangement for the administrator, liquidator or directors who proposed the CVA solution.

Quick facts about Statement of personal financial affairs

This is a personal record of an individual or couples financial statement.This purpose of this statement is to allow the closer examination of personal finances, budgeting, investment and taxes.

DICUS can help with the drafting of your statement of personal affairs.

Quick Facts about Administration Orders

There are two types. There is the administration order for debtor individuals and debtor companies. The administration order for debtor individuals is a court-based procedure whereby you make regular payments to the court to pay towards what you owe your creditors. To apply for an Administration Order, you must: • Have two or more outstanding credit debts; and • Have at least one County Court Judgement against you; and • your total debts must not be more than £5,000 and you will need enough regular income to make weekly or monthly repayments. You do not have to pay a fee for an Administration Order but the court will take a small percentage from the money you pay towards its costs.

The administrator order for debtor companies is also known as  Company Administration orderswas first introduced by the Insolvency Act 1986 as a procedure to protect a company from its creditors giving time for significant operational changes to be made thus leaving the business as a viable going concern. An Administrator is appointed to manage a company's affairs, business and property for the benefit of the creditors. The person appointed must be an insolvency practitioner and has the status of an officer of the court (whether or not he or she is appointed by the court).If an Administration order is granted, this gives a company a vital breathing space whilst a business recovery or restructuring package can be formulated and implemented.

Quick Facts about Debt Relief Orders

Firstly Debt relief orders are only available in England and Wales

A debt relief order (DRO) is an order that you may be able to apply for if you can't afford to pay off your debts. It's granted by the Insolvency Service and is a cheaper option than going bankrupt

You qualify for a DRO if you meet the following conditions:

• you have debts of £15,000 or less
• you have spare available monthly income of £50 or less after paying your normal household bills
• the things of value you own (your assets) and your savings are worth £300 or less. This does not include your car as long as it is worth less than £1,000
• you have not recently been made bankrupt or gone through another sort of insolvency procedure such as an Individual Voluntary Arrangement