An individual contacted KSA to discuss their present financial situation. A meeting was requested with KSA regional manager, Amanda Eckersley, and held at the individual’s home.
The individual’s business operates within the advertising and publishing sector. KSA was appointed to assist with an Individual Voluntary Arrangement (IVA) in April 2015. Turnover for 2015, was c£165K.
The business was encountering financial difficulties due to:
- Ill health
- Family bereavement reducing focus on the business
- Increasing HMRC debts
- The business occupied a small leased storage unit.
- The business employs no staff
Bank & Financial facilities
- The bank was unsecured and provided no overdraft of loan facilities.
- The business leases it vehicles
Unsecured Creditor debt:
- £76K of which HMRC was 100%
Cost & overhead reduction
- Prior to KSA’s appointment, the individual had already reduced costs and overheads to a bare minimum and had worked tirelessly to reduce the creditor balances.
- The individual is negotiating for work with new clients
The IVA was filed at court proposing 50p in £1 to unsecured creditors; however, HMRC rejected this and continued with their action by serving a bankruptcy petition on the individual.
KSA were re-appointed in April 2016 to propose a revised IVA. This included a greater substantiation and detail regarding the causes of the problems as well as ultimately proposing a 100p in £1 dividend. A junior barrister was instructed to obtain an adjournment of the bankruptcy hearing to permit time for consideration of the new proposals. The new IVA proposals were accepted by HMRC, and being the only creditor, the IVA was approved at the creditors’ meeting in June 2016. The bankruptcy petition was dismissed.