We were approached by a debtor who had recently been made redundant and had been through divorce proceedings. The divorce settlement had resulted in him losing his interest in the matrimonial home and he had unsecured debts of circa £80,000 with no income to maintain his monthly obligations.
A number of options were discussed and it was considered that the most appropriate option would be to propose an Individual Voluntary Arrangement (‘IVA’) to his creditors which offered creditors a full and final settlement. Bev Budsworth MD of The Debt Advisor comments, “I had reservations about creditors agreeing the offer considering the divorce settlement and also the lump sum offered was the balance of a redundancy settlement. However, I did think the offer merited putting forward to creditors together with full disclosure of the facts leading up to the individual’s current position.”
Proposals offering £11,000 in full and final settlement were sent to creditors, who unanimously agreed to this proposal, which has resulted in a return to creditors of approximately 14 pence in the pound.
Bev Budsworth adds “The facts of the case were quite specific and it cannot be assumed from this case that creditors will always accept discounted full and final settlements. However, I am pleased that creditors took a pragmatic approach and appreciated that the offer was worthy of positive consideration”.
If you are struggling with debt issues, whether these are business or personal debts, The Debt Advisor Ltd which incorporates The Business Debt Advisor can help. There are a range of solutions available which include both formal and informal solutions such as Debt Management Plans (DMP), Individual Voluntary Arrangements (IVA), Bankruptcy as well as solutions for Businesses. Call us today on 0800 0851 825 to speak with one of our advisors. If you’re calling from a mobile you can reach us on 0333 9999 600.
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up a plan and maintain it – all fees will be outlined during the consultation. Retained payment may place you further into arrears. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term. Calls to our free phone number from mobile phones and other networks may be charged.
There is also free debt help and advice available through a variety of debt charities. For more information, we recommend you visit www.moneyadviceservice.org.uk.
The Debt Advisor is regulated by The Financial Conduct Authority and is also a member of the DRF and we adhere to their codes and standards.