7 September: Whilst as a firm BRI Business Recovery and Insolvency provides advice and assistance predominantly relating to corporate matters, we also advise and act on behalf of individuals dealing with difficult financial circumstances.
For example, we are currently assisting an individual, who is a practicing solicitor, with the preparation and proposal of an individual voluntary arrangement (“IVA”) to creditors. This type of matter is of the more complex variety as opposed to the straightforward consumer debt type case.
It is sometimes the case, as it happens to be here, that the financial difficulties encountered have not arisen by the deliberate actions or poor decisions of the individual but more due to unfortunate circumstances outside of the individual’s control. The debtor was a partner of a failed partnership where they were left, for various reasons, to deal solely with the overwhelming creditor liabilities and debts of the partnership.
As a practicing solicitor, it was and is preferable for the debtor to avoid bankruptcy proceedings. The debtor was referred to BRI for advice and assistance and we considered with the debtor, the option and prospect of proposing an IVA. The proposed IVA, which has now been put to creditors for consideration, offers creditors a clearly better outcome than in bankruptcy, even if only the minimum level of income contributions are received in the IVA and distributed to creditors. However, as an additional incentive, if the debtor can avoid bankruptcy, the IVA is structured in such a way so as to offer creditors potentially a greater return, via additional income streams which may be generated by future business interests which would otherwise not be available to creditors in bankruptcy.
Whilst we can advise and assist individuals in the preparation of an IVA proposal with a view to maximising its chances of it being accepted, it is ultimately for creditors to weigh up the merits of the proposal and to decide for themselves whether it is acceptable to them or not. The role of our Insolvency Practitioners at BRI when acting as nominees for a debtor proposing an IVA is to act reasonably, fairly and appropriately to produce a proposal which is fit to be considered, fair to all and feasible whilst ensuring the balance of interests of both the individual and creditors is maintained. This can be a delicate balance but is achievable under the right circumstances and can offer a suitable alternative option for the right individuals.
It is pleasing for us as a firm to be able to assist an individual who is dealing with difficult financial circumstances and the debtor in this matter has been grateful to share and have some of the burden lifted by taking comprehensive advice, understanding the options, outcomes and implications.
At BRI, as with all corporate matters, we are always willing and pleased to provide the right advice and assistance to all individuals in all circumstances regardless of the outcome for us.