Voluntary Arrangement
If you have serious debt problems you usually have two choices, either to go bankrupt or to make a voluntary arrangement. If you choose to take up a voluntary arrangement then, with the help of a debt management agent, you make a plan to determine a reasonable repayment schedule, then apply to the courts to put the plan before your creditors and see if they will agree to it. If 75% of your creditors agree, then the voluntary arrangement plan will be approved by the court and is legally binding.
The voluntary arrangement plan is not really used for debts less than £20,000 and you must have at least 4 creditors to apply for this process. Once the voluntary arrangement has been decided, your creditors may not take legal action against you unless you default on your payments again.
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