What is an Informal Debt Management Plan?
An informal debt management plan is is an arrangement where by we negotiate with your creditors a settlement agreement. The settlement agreement provides creditors with a statement of your affairs and net worth and cash flow and provides an outcome statement should you or your business be subject to a liquidation or bankruptcy. It requires an agreement from creditors by consent and as such is more appropriate when total levels of debt can be resolved within a 12 or 24 month time frame.
The agreement normally allows for:
- A discount in the total level of debt repaid of up to 80%
- Either a single cash settlement of all debt
- Or a time to pay arrangement over typically 1 or 2 years
- A better outcome for the you as fees and costs are significantly less than a formal insolvency measure like a Voluntary Arrangement
- A better outcome for your creditors as fees and costs are significantly less than a formal insolvency measure like a Voluntary Arrangement
We will open up a line of communication with all your creditors to get the situation under control and give them a single point of contact to discuss any concerns. A creditors single biggest reason for taking legal action is a lack of communication with them about the problems you are having repaying their debt. We are independent and can develop a fresh start to the relationship.
Business insolvency helpline will then negotiate a time to pay or full and final settlement agreement and draw up a contract to make this time to pay arrangement legally binding for all parties involved.
An informal debt management plan is not a formal Voluntary Arrangement which is regulated by the Insolvency Service and managed by a licensed Insolvency Practitioner who will act as the Supervisor of the Voluntary Arrangement and will manage all payment and distributions to creditors on your behalf. The supervisor is a regulated and licensed insolvency professional and is a trusted source of advice and support. We would always tend to recommend a formal Voluntary Arrangement but where appropriate we have had real success helping clients get clear of debts using Informal Debt Management Plans.
We will undertake a solvency review and make an assessment of your financial health called a statement of affairs completely free of charge.
We will explain the options available to you that will enable you to get Legally Protected from further recovery action and back in control including seeking a formal Voluntary Arrangement, Creditors Voluntary Liquidation or even in the worse case scenario Debt Orders and Bankruptcy.