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How much will it cost and how do I pay?
The fees to propose a voluntary arrangement with creditors must be paid in advance and are normally based on the size and complexity of a case. At Maidment Judd we charge a flat fee which covers all the work to approval of the voluntary arrangement. Any work undertaken after the approval of a scheme is paid for out of the funds paid in and must be agreed with creditors. As an example of our costs, a standard voluntary arrangement would be in the region of £2,000 plus VAT.
How long will it take to set up?
Due to the legally binding nature of a voluntary arrangement, it can take six to eight weeks before a meeting of creditors is held to consider the scheme. In the interim however, protection from the court is obtained and we also write to creditors advising them of the progress of the proposal.
Do I have to attend creditors meeting?
The meeting of creditors must be attended by the person putting forward the offer.
What happens if I fail to gain 75% of creditors voting to agree to proposals ?
If creditors refuse the proposal, it is possible to adjourn the meeting of creditors and allow further negotiation to take place. Ultimately, if creditors still refuse to accept any proposal, then the voluntary arrangement is deemed rejected.
Bankruptcy does not follow automatically, but it likely that creditors would commence the bankruptcy process shortly afterwards. It is not possible to apply for a second voluntary arrangement within twelve months of applying for a first.
Will I lose my house?
Voluntary arrangements are not like bankruptcy in that they do not automatically include any assets. It is for the individual proposal to state what is to be included and what is to be omitted. Generally speaking, houses do not have to be sold during the course of an arrangement but if there is equity in the house, some sort of consideration should be given to the creditors for this equity.
Can I keep my car?
A car, if needed for work and if it is of a reasonable standard, would be excluded from any scheme.
Can I still have a bank account?
There are no restrictions on obtaining credit when an individual is in a voluntary arrangement. Creditors however sometimes impose terms such as having to seek permission before obtaining credit other than for normal domestic needs.
Is my credit rating affected?
Your credit rating will be affected if a voluntary arrangement is entered into. It will, however, be different to bankruptcy in that there is no restriction on obtaining credit. Most mortgage application forms have a question asking you to state whether you have previously entered into an arrangement with creditor.
Can I pay an IVA off early?
A voluntary arrangement can be concluded early either by renegotiating the terms with creditors or by making all of the contributions disclosed in the scheme.
Can I act as a director of a company following an IVA or bankruptcy?
There are no restrictions in a voluntary arrangement with respect to acting as a director of one or more companies. This is different to bankruptcy where automatic disqualification of a bankruptcy from acting as a company director is effective for the period of bankruptcy.