The Credit Hospital

The Credit Hospital is a UK based credit repair company

Bankruptcy and IVA Information

Bankruptcy Information

Bankruptcy can be a very positive solution. Don’t think of this as the worst time of your life but the start of a new chapter. Bankruptcy has changed dramatically over the last few years. In 2004 the laws were changed in relation to individual Bankruptcies. The standard duration of a Bankruptcy is now only 12 months.

As a Company that is authorised by the Financial Conduct Authority we have handled hundreds of bankruptcies both in the UK and also all over the world. Many people struggle to obtain credit and move forward with their life due to the debts that they have. In many cases a person needs to deal with their debt issues before them moving forwards with their credit repair process.

Once you are discharged from Bankruptcy you are back to normal with two main changes. You will be debt free but with a Bankruptcy showing on your credit record for the next six years. This then leads to the second stage of the recovery process and time to start to rebuild your credit!

The Credit Hospital has a Bankruptcy section via our specialist bankruptcy companies. Bankruptcy is normally a one-off situation and for this reason it pays to take professional advice. Going through Bankruptcy alone is a big learning curve and if you are not careful you may fall into one of the common pitfalls such as a payment order that lasts for 3 years.

You need to be aware of how assets, property and equity are affected within Bankruptcy. You also need to focus on your income and expenditure as the Official Receivers Office regularly apply Income payment Orders. These are based on the Bankruptcy income and expenditure report and represent a monthly payment to the Official Receiver Office that last for 3 years

Yes, it costs money to declare bankruptcy. A personal Bankruptcy will cost you £680 to submit to the Bankruptcy Adjudicator. The court process has been taken out of the bankruptcy system since 2016 and is now handled via an online bankruptcy account.

You are declared Bankrupt on that day and from this point you are under the full protection of Bankruptcy. All creditors included within the bankruptcy cannot continue to harass you or chase you for payment and they must deal with the Official Receiver. You will at last get relief from the constant barrage of letters, phone calls and debt collectors.



IVA Information

Many thousands of people are currently in an IVA (Individual Voluntary Arrangement). This form of insolvency solution allows you to pay off your debt, over a fixed period of five or six years. The interest is frozen and a monthly payment is agreed with the creditors.

In many cases if the person owns a property there may be a re-mortgage structured in the fourth year. The additional funds from this will also be passed to the IVA Company and then eventually split between the creditors. In some cases 50% of additional earnings may also be taken by the IVA Company.

Sometimes an IVA is the best form of dealing with the person’s debt, however in some cases Bankruptcy could be a better option. The Credit Hospital as a company do not provide IVA’s but we can explain and discuss this option and we will do so in an unbiased manner.


Swapping from an IVA to Bankruptcy

Some people who are in IVA agreements eventually move out of the IVA and take the option of bankruptcy. In some cases this can be a better solution, especially if you have no assets to protect.
Even if you have a property you may not lose this by declaring bankruptcy.

You must default from your IVA before being able to apply for bankruptcy and this will involve missing your monthly payments for at least 3 months. The IVA needs to fail and a termination report needs to be raised which will detail payments and distribution of funds to the creditors and IVA Company.

As this situation is normally quite complex speak to The Credit Hospital and discuss your particular circumstances. We are licensed debt counsellors with years of experience.



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