If you don't want to become bankrupt then you might be able to negotiate a Compromise Agreement with you creditors.
- We give you all the law.
- We give you all the procedures
- We give you all the documents
If you can get them all on your side, then you can draft up a written Agreement recording the precise terms of the agreement.
Provided you carry out the terms of that Agreement, such as time payment, or a lesser lump sum payment, then the creditors bind themselves not to bankrupt you.
It is all quite enforceable. However, such an Agreement does not bind other creditors who might come out of the woodwork. That is the beauty of ther formal PART 5 Subpart 2 Proposal under the new Insolvency Act 2006.
If you cannot get the agreement of all of your creditors, but you can convince 75% of the value of your debts and 50% of the number of your creditors, then you are able to follow a fairly complicated procedure under what WAS KNOWN as a Part XV Proposal of the Insolvency Act 1967, but is now known as a PART 4 Subpart 2 Proposal under the new Insolvency Act 2006.
YOU NEED :
75% of the value of you debts.
50% of the votes of the individual creditors.
This procedure involves putting up a Proposal, circulating your creditors,and holding a publicly advertised meeting of creditors chaired by an independent trustee.
If you get the numbers on your side, then you file the proposal in the High Court and there is a brief hearing where the High Court is asked to approve the Proposal.
The leading Court decisions show clearly that the Courts will really only be interested in seeing that the procedure has been followed correctly.
In that case, the Judge approved a compromise of between less than 3% of the total debt.
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