Informal Arrangements

This page aims to explain the advantages and disadvantages of Informal Arrangements.

Advantages

The professional costs associated with an informal arrangement are not usually as great as those of a voluntary arrangement.
You remain in control of your assets.
It may be possible to obtain your creditors' agreement to freeze any ongoing interest charges.

Your creditors are not obliged to freeze the interest on your account; they may only do so for a limited period of time or only be prepared to charge interest at a reduced rate.
You will be required to ensure that your creditors are paid on an equal basis. You will need to calculate how much you can afford to pay in total each month and divide this equally, on a pari-passu basis, between your creditors.
It is likely that you will be required to repay your creditors in full over a number of years. It is possible that you will continue to pay them for some considerable period after a voluntary arrangement would have finished. It is also possible that you will be required to pay greater contributions than you would wish.
You will remain responsible for ensuring that a monthly payment is sent to each of your creditors for the correct amount, unless you request an outside party to do this for you, who may charge commission for this service.
You will have no court protection and your creditors can, at any time, decide to issue a bankruptcy petition, judgment or other legal process in respect of their debt.

Call us on 0800 195 4585 for further details on Informal Arrangements

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