Insolvency & Bankruptcy

How to avoid bankruptcy without an IVA

What is Insolvency and Bankruptcy?
An individual or business is insolvent when they cannot meet their financial commitments on the dates they become due. This definition would apply to most people at some point or other in their lives. It becomes a problem when people are unable to catch up with unpaid debt re-payments.

If you are insolvent, failure to pay debts quickly could lead to bankruptcy or winding up. Bankruptcy applies to individuals such as sole traders and those that have given personal guarantees for loans. Winding up and liquidation apply to companies. In the UK, it is a criminal offence for an insolvent business to carry on trading.

Becoming bankrupt means restrictions, but it is not so bad for individuals whose businesses have failed through no fault of their own. Most people are discharged within 12 months. However, there can be longer term effects on their credit rating.

Too often, due mainly to an irrational fear of being bankrupt, people seek a formal voluntary arrangement (IVA or CVA). They are expensive to set up and many formal voluntary arrangements fail causing people to go bankrupt anyway. They are often hard sold, as they can make the arranger £5,000 plus. Sadly some who just have mild debts which they can repay are misled.v

Marriotts aim to help clients avoid bankruptcy by establishing informal arrangements with creditors. Such arrangements are more flexible than IVAs and CVAs and they do not have a built in bankruptcy trigger.

The Marriotts specialist corporate recovery team provides a comprehensive range of services, handling all types of personal and corporate rescue and insolvency work.