Debtor

Debtor

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A company that owes us £40k has offered us a repayment plan whereby we receive 40% now and the rest over 25 months.

They have said that they must have agreement with their other creditors, who must agree to these terms also - otherwise the company will be in serious difficulties.

We have suggested a shorter time period and they have replied that there is no negotiation possible.

Does anybody have any suggestions/

Thanks

R
R J

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By User deleted
17th Sep 2004 18:31

ltd
thanks -

this company is limited and has a t/o of around 10m.

are there anythings we can do in addition to agreeing?

thanks

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By johnpaylor
18th Sep 2004 15:40

Looks like an informal voluntary arrangement
The problem with informal voluntary arrangements is that a creditor can upset things by pressing for payment through the courts etc. at any time. Also there is no independent insolvency practitioner supervising to ensure that all creditors are being treated equally. And now statutory interest may automatically apply under Late Payment of Commercial Debts, which is difficult to opt out of.
While a formal voluntary arrangement under the Insolvency Act would give more reassurance, the offer of some cash now may be attractive.

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By neileg
17th Sep 2004 15:49

Sounds like an IVA
Are you sure this is a company and not an individual? This kind of proposal sounds like an Individual Voluntary Arrangement.

If the customer is in financial difficulties, then in my experience, you take what you can get. 40% of £40k may be £16k more than you get if you argue too much!

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