1. Can entering a debt management programme damage my credit score?
Joining a Debt Management Programme won’t directly affect your credit rating. But if you are experiencing financial difficulty your credit rating will have already been affected.
Creditors can still issue a default notice to register the fact that your original agreement with them has not been maintained.
2. Do all my creditors have to approve an IVA?
75 per cent of creditors by debt value who vote at a meeting must accept your proposals for an IVA to be approved.
3. How Much Does it Cost to Set up an IVA?
The insolvency practitioners that we use will not charge you to set up an IVA.
The majority of insolvency practitioners take their fees from IVA fund that is paid to your creditors.
In other words, it is your creditors who pay the insolvency practitioner’s fee (this is usually around £2,500 for their nominess fee and £900 a year to supervise the Arrangement).
4. Why will my creditors accept an IVA and not force bankruptcy?
An IVA is a preferable alternative to bankruptcy to the creditors, as they can expect to get more back than they would normally receive from bankruptcy.
In practice most creditors don’t want to make you bankrupt. This is because the fees associated with bankruptcy are high and it results in bad publicity.
5. How do I declare myself bankrupt?
Go to your local court (make sure they deal with insolvency cases), obtain the forms and find out how much the fee will be. Fill out the forms and return to court with the fee payable. Above all take advice before you take what is a very major step.
6. Can a bankrupt still trade?
You are still allowed to earn a living, and can do this by being self-employed or by carrying on a business, as long as you do not obtain credit of £500 or more without disclosing that you are an undischarged bankrupt, and as long as you do not use another name (unless you tell those with whom you trade of the name under which you were bankrupt).
Remember if you earn more than sufficient to meet the reasonable domestic needs of yourself and your family, the Official Receiver will apply for an Income Payments Order (IPO).
7. If I am bankrupt, will I still have to repay my student loan?
Yes all outstanding student loans cannot be claimed in bankruptcy. They remain the responsibility of the (ex) student to repay within the terms of the arrangement.
If you were made bankrupt before 1 September 2004 you may still have to repay your student loan and should check with your Official Receiver.