Individual Voluntary Arrangement (IVA)
This is an alternative to bankruptcy and debtors negotiate with their creditors to repay their debt over a period of about 60 months. The remaining debt gets written off.
Administration order Source:
An administration order is a legal order which relates to your remaining debts. This order will require you to make monthly repayments to the court, and they will then arrange to pay your creditors accordingly.
The court will make an administration charge for this facility which is usually 10% of your payments.
As long as this order is in effect, no creditor who is mentioned in the order will have permission to take legal proceedings against you. Also they will have to cease any correspondence / debt collection activities.
Bankrupt
A person who has had a bankruptcy order placed against them and who has not yet completed their bankruptcy term..
Bankruptcy Order
The legal order which makes an individual becomes bankrupt.
Bond
A bond is the insurance cover required by an individual who practices as an Insolvency Practitioner.
Compulsory Liquidation
When an organisation is placed into liquidation as a consequence of an application to the court, typically by a creditor.
Creditors' Committee
A creditors' committee is created to act for the concerns of all creditors in
Disqualification of Directors
Any director of an insolvent company who has been found to have mismanaged its affairs could be disqualified via a petition to the court from the Department of Trade and Industry, from holding management status within a company for a period between 2 and 15 years.
Floating Charge Source:
A floating charge is where all assets of the business other than items which are associated to a mortgage or fixed charge a used as collateral for the loan.
One benefit of a floating charge is that you may sell or utilise the assets, as they will not incur any charge unless your lender informs you.
It's important that the loan repayments are made as stated by the lender at the time of issue. If not the lender can:
- Switch the collateral to a fixed charge (this means that you would not be able to sell any of the assets)
- Arrange the appointment of a receiver or administrator to operate the company.
- Seizing or placing assets for sale to settle the outstanding loan.
Fraudulent Trading
Where a company has continued to trade with the intention to deceive creditors for any deceitful or fraudulent purpose. It is a criminal offence and individuals concerned can be made personally responsible for the company's liabilities.
Liquidation
Liquidation is the process where all assets of a company (or partnership) are collated and accounted for.
Insolvency Practitioner (IP)
An Insolvency Practitioner is an individual who is sanctioned by: Chartered Accountancy Bodies, Law Societies, The Insolvency Practitioners Association or the Department of Trade and the only person who can represent individuals in an insolvency case.
Interim Order
A person who intends to put forward a voluntary arrangement to his creditors may place a request to the court for an 'interim order' which, if approved prevents bankruptcy and other legal actions whilst the order is in effect.
Official Receiver (OR)
An official Receiver is a civil servant who has been appointed by the Department of Trade and Industry to deal with compulsory liquidations and bankruptcies.
Petition
A written request to the court for assistance or solution.
Receivership
Receivership is the term which is used when an individual is chosen as a receiver or administrative receiver of specific assets.
