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Record Numbers of IVAs — What Does This Mean for Creditors?

The Insolvency Service has released figures which show that nearly 88,000 Individual Voluntary Arrangements (IVAs) were registered in England and Wales in the course of 2022. This represents the highest figure since 1990, when records began. So what are IVAs, why have they increased so much, and what might it mean for you as a creditor? What Is an IVA? Introduced in 1986, an IVA is a formal alternative to bankruptcy
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Debt Help Enquiries Soar Due to Cost-of-Living Crisis

The cost of living crisis is hitting people in a wide variety of ways, and recent research has illustrated another. In the twelve months since January 2022, the number of people seeking help with their debts has increased more than threefold — and most cite rising prices as the main reason. The Rise in Debt Enquiries A survey was carried out by debt advisor MoneyPlus Advice, after they saw initial enquiries rise by 3
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The Recession’s Nowhere Near Over — How Will That Affect You?

During 2022, a combination of soaring prices (especially energy prices) and income lagging behind pushed the economy into recession. The bad news is that, according to forecasts by KPMG, the recession is likely to last for the rest of 2023, with output falling by 1.9%. So why are things so bad, and what’s it likely to mean for you and your business? What’s Causing the Recession? The main driving force of the recessio
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Restructuring Plans — The Way Forward for Insolvency?

While more traditional insolvency procedures — e.g. Company Voluntary Arrangements (CVA), “pre-pack” Administrations and Schemes of Arrangements — are sometimes the best way forward, they can have disadvantages. Winding a company up isn’t always in the best interests of the creditors, any more than the debtor, but there has often been little choice. However, in 2020 a new approach was introduced — Restructuring Plans
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Growing Calls for More Flexibility on Debt Repayment

It’s hardly surprising that the current cost of living crisis has seen a sharp rise in people with problem debts. Recent figures suggest that one in three households have missed paying a bill in the past year, and this looks set to rise. In this atmosphere, calls have been growing for banks and credit lenders to take a more flexible and compassionate approach to repayment by vulnerable debtors. The Problem With Lende
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Insolvency Service Raising Petition Deposits

If you’re applying to the Insolvency Service for either a Creditors’ bankruptcy or a Company liquidation against someone who owes you money, a deposit is charged. This may or may not be returned, depending on the assets available. The charge for deposits has been stable since 2016, but next month it will be rising substantially. So what does this mean, if you’re considering applying? What Are Petition Deposits? If al
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What’s the Position of Third-Party Guarantors Under a Part 26A Plan?

Two years ago, the government enacted Part 26A of the Companies Act 2006. The aim was to offer protection for companies during the Covid-19 pandemic, allowing the option of arranging a sanctioned restructuring plan. This includes the possibility of a moratorium on the company’s debts. However, one aspect of this not specifically covered by the Act, and not previously tested in court, is the position of third-party gu
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Bounce-Back Loans — Can’t Pay or Won’t Pay

With many businesses devastated by the Covid pandemic, government measures like furlough and bounce-back loans were often lifesavers. However, when the time came to start paying back, not everyone repaying as easy as borrowing. Sometimes this was due to ongoing challenges, but some cases were self-inflicted. Bounce-Back Loan Fraud — Convictions Begin Because of the urgency of the situation, bounce-back loans were oft
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Inflation Inspires Changes in IVA Advice

For anyone facing bad debt that they can’t pay off in the short term, an individual voluntary arrangement (IVA) can be an ideal way of clearing the debts over a longer period, without being vulnerable to action by their creditors. IVAs are arranged on the basis of what the debtor can afford on a monthly basis. As we know all too well, however, inflation is now running at a 40-year high, driven largely by increases in
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Should You Act as a Personal Guarantor for a Business Loan?

Have you ever been asked to act as a personal guarantor on a business loan? Maybe you’ve been asked by a business owner you’re on good terms with, or maybe you’ve considered taking on the role for a limited company you’re a director of. Is it a good idea to accept the request — and what could the consequences be? What Is a Personal Guarantee? There are various ways of offering security to a lender for a business loan
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