He was left with a number of unpaid personal debts and in particular, a large HMRC liability. After struggling for approximately a year, Leroy concluded that he had no option but to seek professional advice.
Solution
Leroy was referred to The Business Debt Advisor by his accountant. We discussed all of the options available to him. Leroy was adamant that he wanted to repay as much as possible and wished to protect his property, which would be at risk should he opt for bankruptcy.
Having considered the merits of each solution, it was agreed that the best course of action would be for him to enter into an Individual Voluntary Arrangement (IVA).
APPROVED TRADER IVA SOLUTION
The IVA was approved by creditors, despite initial rejection from HMRC. They required all his equity to be paid into the IVA and increased contributions. Following negotiations with HMRC, Leroy’s IVA was approved with the agreement that Leroy was to introduce his share of equity into the property into the arrangement by the end of year 2.
Leroy’s efforts to introduce the sum in lieu of his equity was delayed and it was apparent this would not be completed by month 24. The team at TBDA worked hard to ensure that creditors accepted varied terms allowing the sum to introduced by month 30 and that contributions were then reduced to take account of the new secured loan payment.
Leroy is currently up-to-date with payments and is on track to complete his arrangement in 2 years time.
The Voluntary Arrangement
Total Unsecured Debt: £417,007
Total to Repay: £216,017
Dividend to be Received by Creditors (p/£): 48
Leroy’s Comments
“I approached The Business Debt Advisor after they were recommended by my accountant. I knew that getting an IVA approved was going to be difficult due to the level of tax arrears. Bev Budsworth and her team worked tirelessly with HMRC so that the IVA was both approved in the first instance and then varied at a later date. I have always been treated very well and in a professional and courteous manner, the focus has always been on achieving the best outcome and would not hesitate to recommend them in the future.”
Careful consideration must be given to all options available to a financially distressed business.
