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- Is this a loan?
No. An individual voluntary arrangement is a legal process which is agreed with your creditors to repay them in a structured and regular way.
- Will I be credit checked before acceptance?
No. Since you will not be borrowing any money, there will be no need for a credit check.
- Can I enter an IVA if I already have CCJs against me?
Yes. Entering into an IVA also offers you a way in which you can avoid further recovery action after a creditor has obtained a CCJ against you.
- Does it make a difference if I am a homeowner or tenant?
No. It makes no difference whether you are a tenant or homeowner or even if you are still living with your parents.
- If I am a homeowner, will I have to release equity in my home into the IVA?
Almost certainly, you will have to release equity in your home into the IVA, usually as part of the final settlement of the IVA.
- Do I have to be in full time employment?
No. To enter into an IVA, you only need to have a surplus of income above what you need to live on.
- Do I have to tell my partner?
You will almost certainly have to tell your partner if you are entering into an IVA.
- Does an IVA cover all of my debts?
No. An IVA can only cover your unsecured debts and arrears.
- What is the difference between a secured and unsecured debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, a car loan. An unsecured loan is any loan not secured on an asset, such as a bank overdraft, a personal loan, a credit card, store card.
- Do creditors have to accept an IVA?
The decision to accept or reject an IVA is made by a vote of your creditors at a creditors meeting. You need to get 75% acceptance by debt value at that meeting for the IVA to go ahead. If less than 75% by debt value vote to accept the IVA, the IVA will fail.
- Can an individual creditor refuse to accept an IVA?
Yes, but only if he has more than 25% of the debt voting at the creditors meeting. Once the IVA has been accepted by vote at the creditors meeting, all creditors are bound by law to accept the arrangement.
- Will the IVA affect my credit rating?
You should expect that your credit rating will be adversely affected by going into an IVA.
- Will the IVA prevent my creditors taking further recovery action?
Yes. Once the IVA is in place, you are protected from all further recovery action by your unsecured creditors.
- How long will the IVA last?
This can vary, but it usually lasts for 5 years.
- What if my circumstances change?
If you are unable to maintain repayments because of a change in circumstances, your supervisor of the IVA can request a variation to reflect your new circumstances.
- Can I cancel the IVA once it is set up?
No. An IVA is a legal process and, once it is set up, you cannot just cancel it if you change your mind.
- What happens if I just stop paying into the IVA?
If you fail to keep to the arrangement, your supervisor of the IVA has the right to apply for you to be declared bankrupt.
- How are the supervisor’s fees collected?
The supervisors fees are collected from the payments you make into the IVA and you will normally have no other fees to pay.
- How long does it take to set up an IVA?
It takes typically between 6 and 8 weeks to set up an IVA.
- Will interest and other charges be frozen while the IVA is being set up?
No, but any such interest and charges will be covered by the IVA when it is approved.
- Can a creditor take further recovery action before the IVA is approved?
Yes, but you can apply to the courts for an Interim Order to stop any of your creditors taking further recovery action until the outcome of your creditors meeting is known.
- What happens if the IVA is not approved?
You will have to come to an alternative arrangement with your creditors to repay your debts.
* Conditions Apply: Subject to eligibility, debt write off applies only where an Individual Voluntary Arrangement is suitable and only applies at the end of 60 months. Alternative solutions may be offered. Failure to adhere to an IVA can result in bankruptcy. An IVA should only be considered in extreme circumstances. It is a formal legal agreement supervised by the Insolvency Practitioner and will seriously affect your credit rating for up to 72 months after the completion of the IVA. This relates to unsecure debts that were included in your IVA and does not include any secured debts, mortgages, hire purchase (HP) or utility bills.
Rose and Berg Ltd: Company Registration Number: 5997777, Registered Office Address: Manchester House, 84-86 Princess Street, Manchester, M1 6NG, Consumer Credit License Number: 594431
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- Is this a loan?
No. We do not lend you money or pay off your debts. Your payment plan is a solution that allows you to repay your creditors at a monthly rate that you can afford. If you do not make payments into the plan, we cannot make payments to your creditors.
- Will I be credit checked before acceptance?
No. As we do not lend you any money, we do not need to credit check you.
- Can I come on a DMP if I already have CCJs against me?
Yes. You can even use the plan to make payments against any existing CCJs that you have, just make sure that we know exactly what your current situation is when you talk to us before coming onto a DMP.
- Does it make a difference if I am a homeowner or tenant?
No. It makes no difference whether you are a tenant or a homeowner or even if you are still living with your parents.
- Do I have to be in full time employment?
No. To come onto a DMP, you only need to have a surplus of £100 above what you need to live on.
- Do I have to tell my partner?
We believe it is always best to be honest with your partner; however, you only have to tell your partner if you have shared debts and/or you need your partner’s income to be taken into account to support the plan.
- Does the DMP cover all of my debts?
No. A DMP can only cover your unsecured debts and arrears.
- What is the difference between a secured and unsecured debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage/remortgage a secured loan or a car loan. An unsecured loan is any loan not secured against an asset, such as a bank overdraft, personal loan, credit / store card.
- Do creditors always accept reduced payment offers?
Creditors do not have to accept any offer of repayment below the contracted minimum. However it is our experience that they are prepared to accept reduced repayment offers where we are able to demonstrate that the offer we have made is reasonable and that you are committed to repaying your debts by the use of a DMP.
- Will the DMP affect my credit rating?
A DMP will result in you not making contracted repayments on your unsecured debts; you should expect your credit rating to be adversely affected. Your credit rating may already have been affected if you have arrears or a history of missed or late payments.
- Will I receive a Default Notice?
By subscribing to a DMP you will be in default of your original credit agreement and your creditor is therefore entitled to send you a default notice, creditors send out default notices to protect their own legal position, this does not affect your DMP.
- Will the plan prevent my creditors taking further recovery action?
We cannot guarantee that your creditors will not take further action, including court action to recover debts from you; if they do we will help you to respond so that any repayment that is required is within your ability to repay.
- What if my creditors continue to pursue me for payments?
Certainly in the short term, your creditors will continue to take action to recover your debts, Do not ignore them, Deal with calls politely, informing creditors that you have appointed Rose & Berg to act on your behalf, forward all creditor letters covered by the DMP for us to deal with on your behalf.
- How long will the plan take?
Because you are making reduced payments on your debts, it will take longer for your debts to be paid off, as part of our initial consultation with you, we will provide you with an estimate of the likely time you will be on the DMP. Please understand that a Debt Management Plan is not an overnight solution and can sometimes take several years to complete.
- What if my circumstances change?
A Debt Management Plan is an informal arrangement which is easy to change to suit your personal circumstances and can be replaced with an alternative solution if one becomes more appropriate at a later date.
- How much does the service cost?
We retain your first monthly payment as our initial fee and then a monthly management fee equivalent to 10% of each payment you make to us, subject to a monthly minimum of £20 with a maximum of £90. There are no other hidden charges.
- How are the fees collected?
We retain your first monthly payment as our initial fee for setting up the DMP, after which we deduct our monthly management fee when we make a distribution to your creditors. If we do not make a distribution, we do not take our fee.
- Can I cancel my plan at any time?
Yes. All you have to do is give us 2 weeks written notice of cancellation.
- Do I incur any charges if I cancel my plan?
No, you can cancel with us at any time without any further charge.
- How is my money held until it is distributed to my creditors?
We hold all monies sent to us for distribution to creditors in a client trust account with our bankers. This means that your money is completely protected in the event of our insolvency.
- What happens to any money held for distribution if I cancel?
We will refund to you any monies you have paid us which we have not yet distributed at the time you cancel with us.
* Conditions Apply: Subject to eligibility, debt write off applies only where an Individual Voluntary Arrangement is suitable and only applies at the end of 60 months. Alternative solutions may be offered. Failure to adhere to an IVA can result in bankruptcy. An IVA should only be considered in extreme circumstances. It is a formal legal agreement supervised by the Insolvency Practitioner and will seriously affect your credit rating for up to 72 months after the completion of the IVA. This relates to unsecure debts that were included in your IVA and does not include any secured debts, i.e. mortgages, hire purchase (HP) or utility bills. Rose and Berg Ltd: Company Registration Number: 5997777, Registered Office Address: Manchester House, 84-86 Princess Street, Manchester, M1 6NG, Consumer Credit License Number: 594431
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- Is this a loan?
No. A Protected trust deed is a legal process which is agreed with your creditors to repay them in a structured and regular way.
- Will I be credit checked before acceptance?
No. Since you will not be borrowing any money, there will be no need for a credit check.
- Can I enter a PTD if I already have CCJs against me?
Yes. Entering into a PTD also offers you a way in which you can avoid further recovery action after a creditor has obtained a CCJ against you.
- Does it make a difference if I am a homeowner or tenant?
No. It makes no difference whether you are a tenant or homeowner or even if you are still living with your parents.
- If I am a homeowner, will I have to release equity from my home into the PTD?
Almost certainly, you will have to release equity in your home into the PTD, usually as part of the final settlement of the PTD.
- Do I have to be in full time employment?
No. To enter into a PTD, you only need to have a surplus of income above what you need to live on.
- Do I have to tell my partner?
You will almost certainly have to tell your partner if you are entering into a PTD.
- Does a PTD cover all of my debts?
No. A PTD can only cover your unsecured debts and arrears.
- What is the difference between a secured and unsecured debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, a car loan, etc. An unsecured loan is any loan not secured on an asset, such as a bank overdraft, a personal loan, a credit card, store card, etc.
- Do creditors have to accept a PTD?
The decision to accept or reject a PTD is made by a vote of your creditors at a creditors meeting. You need to get 75% acceptance by debt value at that meeting for the PTD to go ahead. If less than 75% by debt value vote to accept the PTD, the PTD will fail.
- Can an individual creditor refuse to accept a PTD?
Yes, but only if he has more than 25% of the debt voting at the creditors meeting. Once the PTD has been accepted by vote at the creditors meeting, all creditors are bound by law to accept the arrangement.
- Will the PTD affect my credit rating?
You should expect that your credit rating will be adversely affected by going into a PTD.
- Will the PTD prevent my creditors taking further recovery action?
Yes. Once the PTD is in place, you are protected from all further recovery action by your unsecured creditors.
- How long will the PTD last?
This can vary, but it usually lasts for 36 months.
- What if my circumstances change?
If you are unable to maintain repayments because of a change in circumstances, the supervisor of the PTD can request a variation to reflect your new circumstances.
- Can I cancel the PTD once it is set up?
No. A PTD is a legal process and, once it is set up, you cannot just cancel it if you change your mind.
- What happens if I just stop paying into the PTD?
If you fail to keep to the arrangement, the supervisor of the PTD has the right to apply for you to be declared bankrupt.
- How are the supervisor’s fees collected?
The supervisors fees are collected from the payments you make into the PTD and you will normally have no other fees to pay.
- How long does it take to set up a PTD?
It takes typically between 6 and 8 weeks to set up a PTD.
- Will interest and other charges be frozen while the PTD is being set up?
No, but any such interest and charges will be covered by the PTD when it is approved.
- Can a creditor take further recovery action before the PTD is approved?
Yes, but you can apply to the courts for an Interim Order to stop any of your creditors taking further recovery action until the outcome of your creditors meeting is known.
- What happens if the PTD is not approved?
You will have to come to an alternative arrangement with your creditors to repay your debts.
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1. How will a DRO be made?
DROs are applied for online, with an approved intermediary helping to complete an application. Upon receipt of the application and payment of the fee, an Official Receiver is able to make the order, administratively, without the involvement of the court if it appears that the applicant meets the requirements.
The Official Receiver is able to refuse to make an Order or can choose to delay the decision pending further information from the applicant.
2. What are the effects of a DRO?
During the period that an order is in force, the debtor will:
- Be protected from enforcement action by the creditors included in the application (bar certain creditors whose debts cannot be scheduled in the DRO and those creditors whose debts are included in the DRO but who have successfully obtained leave from the court to pursue their debts).
- Be free from those debts at the end of the period (normally12 months from Order).
- Be obliged to provide information to and co-operate with the Official Receiver.
- Be expected to make arrangements to repay their creditors should their financial circumstances improve.
As with other forms of personal insolvency, a DRO debtor’s credit rating will be affected and there will be civil and criminal penalties for those who abuse the system.
The Official Receiver is able to investigate, either on his own account or as the result of an objection from creditors, and is able to revoke the order if the debtor is found to have failed to provide a full and accurate account of their financial affairs (for example, an understatement in their assets or income). Failure to provide such an account may result in civil and criminal sanctions.
3. What restrictions will be placed upon a person who has a DRO?
For the duration of the Order, the debtor will be subject to similar restrictions as in bankruptcy, and their details will be on the publically available Individual Insolvency Register (available at www.insolvency.gov.uk)
These restrictions include the following:
- The debtor must not obtain credit of £500 or more, either alone or jointly with another person, without disclosing that they are subject to a DRO to the lender.
- The debtor may not carry on a business (directly or indirectly) in a name that is different from the name under which they were granted a DRO, without telling all those with whom the debtor does business the name under which they were granted a DRO.
- The debtor may not be involved (directly or indirectly) with the promotion, management or formation of a limited company, and may not act as a company director, without the court’s permission.
- The debtor will only be able to obtain a DRO once every six years.
Furthermore the Official Receiver will be able to apply for a Debt Relief Restrictions Order, similar to the bankruptcy restriction order, which will extend the period of restriction for up to fifteen years for debtors who are dishonest or culpable.
4. How can I get a DRO?
Contact Rose & Berg for further information and help with Debt Relief Orders.
You cannot apply for a DRO without the assistance of an intermediary.
To apply for a DRO involves payment of a fee which will be less than £100.
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Where can I get more information?
www.roseandberg.co.uk or call 0800 023 2191 for further information.
Further information can be obtained from;
www.insolvency.gov.uk give more details of insolvency procedures. Please see 'A Guide for
Directors' and 'A Guide for Creditors'.
You can obtain further copies of this booklet from The Insolvency Service website:
http://www.insolvency.gov.uk/. All of their publications are also available on the website.
You may also, free of charge, order copies of publications from the BERR Publications
Orderline. To do this you will need the reference number (URN) of the forms required. This
can be found on the back cover of the leaflets or on the website. Orders can be made:
By telephone: 0845 015 0010
By email: publications@berr.gsi.gov.uk
By fax: 0845 015 0020
Minicom users should telephone: 0845 015 0030
You may also find it helpful to read the publication GBW1 'Liquidation and Insolvency',
issued by Companies House free of charge. It gives more details about alternative
insolvency proceedings and liquidation. The quickest way to get a copy is through their
website at: www.companieshouse.gov.uk or by telephoning 0870 3333 636.
The address and telephone number of your local county court are listed under 'Courts' in
the phone book, where you should look for 'civil courts – county courts' and not magistrates'
courts. The Courts Service website at: http://www.hmcourts-service.gov.uk/ has an index of
county courts that have jurisdiction to hear insolvency cases.
You can also contact The Insolvency Enquiry Line for general enquiries, on 0845 602 9848,
or email us at: info@roseandberg.co.uk or you can contact 0800 023 2191 - Insolvency. Enquiryline@insolvency.gsi.gov.uk
For general enquiries to the Courts Service, you can call their Customer Service Unit on
0207 189 2000 or 0845 4568770, or email them at: customerservicecshq@hmcourts-service.gsi.gov.uk
This publication provides general information only. Whilst every effort has been made to
ensure that the information is accurate, it is not a full and authoritative statement of the law
and you should not rely upon it as such. Rose & Berg, The Courts Service and The Insolvency Service
cannot accept responsibility for any errors or omissions as a result of negligence or
otherwise
What additional help is available for court users with a disability?
If you have a disability that makes going to court or communicating difficult, please contact
the Customer Service Officer of the court concerned, who may be able to help you. If they
cannot help you, you can contact the Court Service Disability Helpline free on 0800 358
3506 between 9am and 5pm, Monday to Friday. If you are deaf or hard of hearing, you can
use the Minicom service on 0191 478 1476.
Liquidation terms - what do they mean?
Creditor - someone to whom the company owes money.
Contributory - every person who is liable to contribute to the assets of a company if it is
wound up. The liability is limited to the value of the person’s shareholding.
Debt - the money the company owes.
Dissolution - the process by which a company is removed from the Register held at
Companies House and ceases to exist.
Insolvency practitioner - an authorised person who specialises in insolvency, usually an
accountant or solicitor. They are authorised by the Secretary of State or one of a number of
recognised professional bodies.
Liabilities - the money the company owes.
Liquidator - may be either the official receiver or an insolvency practitioner. The
liquidator's main duties are to collect and sell assets and pay the creditors.
Member State liquidator - a liquidator appointed in liquidation proceedings which are
opened against the company in another member State of the European Union.
Realisation - sale or disposal of assets.
Recognised professional body - a professional body that the Secretary of State allows to
authorise a person to act as an insolvency practitioner.
Rescission of a winding-up order - a court order that cancels the winding-up order.
Resolution for winding up - a decision by a meeting of shareholders of a company to
place it in liquidation. Not all the shareholders need to vote in favour for the resolution to be
passed, but a majority vote is required. The majority needed depends on the type of
resolution being passed, as follows:
ordinary resolution - 50% of the shareholders vote in favour;
special resolution - 75% of the shareholders vote in favour, and were given at least 21
days notice of the meeting;
extraordinary resolution - 75% of the shareholders vote in favour, and were given less
than 21 days notice of the meeting.
Statement of truth - a statement in writing and on oath, which is sworn before an
authorised person, e.g. an authorised solicitor or court official. It used to be called an
affidavit.
Winding-up order - a court order that places a company into liquidation.
Winding-up petition - a request to the court for a company to be placed into liquidation. |
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