 |
Case StudiesIVA - Individual Voluntary Arrangement avoiding Bankruptcy - following debts from a sole trader businessNote: certain names and details have been changed to protect the privacy of the persons involved. Mr Davis operated as a sole trader in the computer business. Through a number of bad debts, poor management and overspending, he had run up credit card and business debts. His business was now operating well, but was having difficulties meeting the old debts. Mr Davis knew that he was at risk from a bankruptcy petition, particularly from the Inland Revenue, but wanted to avoid bankruptcy because it would make it almost impossible for him to continue in business. He had minimal personal assets. Mr Davis was referred to us and we examined his circumstances. It was certain that if no action was taken a bankruptcy petition would be presented with no prospect of paying the debt owed. On review, his on-going business showed every potential to generate a good income. We spoke to the most pressing creditors, to determine what kind of settlement they would realistically expect and having been satisfied that Mr Davis would be able to pay such from future income, contacted an insolvency practitioner to assist Mr Davis in preparing a voluntary arrangement proposal. The voluntary arrangement proposal was approved.
|
COMMENT Mr Davis's position is typical of many small business owners. He experienced bad debts and poor management in the initial stages of his business, but had started to do well. However the earlier debts were too much for the business to deal with. By negotiation with the largest creditors and a proposal for a voluntary arrangement that was realistic and offered creditors a better return than bankruptcy, Mr Davis was able to continue to trade, freed from the stress of earlier debts whilst paying creditors a fixed sum over an agreed period. |
|||||
 |
   |
||||||
| The Personal Insolvency Bureau: Telephone 020 8429 5231 | Copyright © The Personal Insolvency Bureau 2010. All rights reserved. |