We will provide full market advice during the consultation process to ensure the client is fully aware of all options open to them.
In certain circumstances, a lump sum may be available (e.g. through a third party such as a family member, a friend, or maybe even a business associate) to settle with creditors. An informal negotiated settlement has the advantage of minimising costs, as there is usually no court involvement.
Typically, in these scenarios, the lump sum is insufficient to settle the debt in full. Most creditors will usually entertain negotiations in good faith as long as is it makes commercial sense. For example, a creditor may decide that it is better to take a lump sum settlement of 50%* than push for bankruptcy and receive nothing.
We cannot guarantee at what level creditors (e.g. banks, HMRC, etc) will settle as every case is different (or even if they will consider a settlement as there is no legal obligation to do so). Providing negotiations are conducted in good faith and in a transparent manner, a settlement can usually be achieved.
The downside to this process is that it does usually take 6-18 months to reach a deal that is acceptable to both parties.
*Please note that this figure is for illustrative purposes only and should not be taken as a guide/indication as to the savings that can be achieved.