Negotiated Agreement with Creditors
This is where an individual (the debtor) contacts his or her creditors and negotiates an agreement to repay some or all of his debts.
This is not a formal insolvency procedure and there is no court involvement.
This option is most appropriate where the debtor has only a small number of creditors who are supportive of the debtor.
The main disadvantages of negotiated agreements with creditors are as follows:
- They are not legally binding on creditors, unlike an Individual Voluntary Arrangement (“IVA”) for example.
- Even if a creditor initially consents to a negotiated agreement, he may decide to change his mind after the agreement has been in place for some time.
- The debtor remains liable to repay the full amount of the debt and this could take a long time to clear if repayments are small, and interest charges may be accruing during this period.
For further information regarding this procedure, and whether it could be appropriate for you, please contact us today on 0114 251 8820.
Alternatively, please complete our contact form and we will respond to you as soon as possible.