If you’re currently undergoing bankruptcy or have recently been declared bankrupt, you have the option to acquire a Fast-Track Voluntary Arrangement (FTVA) rather than continue with your bankruptcy and all your proceedings with be terminated.
An FTVA is essentially a legally-binding arrangement between yourself and your lenders to repay your liabilities over a fixed timeframe.
The following page will provide you with all the key information involving an FTVA including how you can go about obtaining one and the reasons why people choose it over bankruptcy.
What is a Fast Track Voluntary Arrangement?
If you are someone who is currently going through bankruptcy proceedings or have been declared bankrupt recently, but desire to use a different debt solution to address your financial difficulties, then you could make an application to enter onto a Fast-Track Voluntary Arrangement (FTVA). An FTVA is essentially a variant of the more well-known Individual Voluntary Arrangement. Like an IVA, it is a legally binding agreement between yourself and your creditors to repay your debts in smaller sums over an extended timeframe. You must make a formal application to both your creditor’s and the court, who will then decide whether to authorise your FTVA. If accepted, both you and your lenders will be bound to the arrangement and will have to uphold all the terms and conditions.
In order for an FTVA to be officially set up you will need to utilise the services of the Official Receiver. If you make the decision to formally apply to obtain an FTVA, then you should get into correspondence with the Official Receiver. After your FTVA has been finalised, your bankruptcy will be terminated.
You can access further information about the FTVA procedure and requirements in the Insolvency Service’s online leaflet entitled ‘Fast Track Voluntary Arrangements’ at www.bis.gov.uk.
Why do people opt for an FTVA instead of Bankruptcy?
Due to the radical nature of Bankruptcy, many people choose to use an FTVA in order to avoid its negative implications. Commons reasons include:
- The person in debt wishes to retain ownership over their home and their prized assets.
- The debtor is aware that bankruptcy will affect their employment and could result in them losing their job due to a clause in their company contract.
Usually, your lenders will only consent to your acquisition of an FTVA rather than pursuing bankruptcy proceedings against you if they genuinely believe that it will mean they get a higher level of repayment from you. You should keep in mind that if you are accepted for an FTVA, you will usually end up paying more to your creditor’s than you would have done if you had gone bankrupt