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Personal insolvency
Bankruptcies
Until 2004 being bankrupt had long term consequences, since it was three years before discharge. The Enterprise Act 2002 which came into force in 2004 changed the ground rules. The usual period before discharge was reduced from three years to one year and this can be reduced further by the Official Receiver, using their discretion to decide if the individual was culpable or not.
The one year period is designed to encourage entrepreneurs to 'have another go' as the failure of the business may not have been of their making.
More information may be found at the Insolvency Service website here
Individual Voluntary Arrangements (IVA)
An IVA is an alternative to bankruptcy. Basically it is a contract between you and your creditors. The terms of your proposal to creditors may be very flexible, but creditors will reasonably expect their prospects of recovering money to be at least as good as in a bankruptcy. Typically a proposal will involve monthly contributions over a 3-5 year period, sale of a substantial asset, contributions from a third party, or a combination of these. Creditors will expect the proposal to contain sanctions (such as a right to bankrupt you) if you do not fulfil your part of the bargain.
More information may be found here