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Personal Insolvency and Debt Management Services
If you are having difficulties managing your debt, the first step is to put a clear plan and appropriate actions in place. At RSM Gibraltar, we provide confidential advice to help you understand the options available and determine the most suitable course of action for your circumstance.
Our licensed Insolvency Practitioners will take the time to meet with you and provide tailored advice and support with a free consultation. Whether acting as Trustee in a Personal Bankruptcy or preparing and supervising an Individual Voluntary Arrangement, our experienced professionals work to identify processes that maximise returns to creditors while, where possible, helping you avoid the potentially severe consequences of bankruptcy.
Bankruptcy
Bankruptcy is a formal legal process for individuals designed to provide debt relief for individuals whose financial circumstances are unlikely to improve and who are unable to repay their debts within a reasonable timeframe. While it can feel overwhelming to consider, for some people it offers a clear and structured way to draw a line under unmanageable debt and begin again.
A bankruptcy order can only be made by a court. This may happen in one of two ways:
- you may choose to apply to the court yourself if you are no longer able to pay your debts; or
- if you owe £5,000 or more, a creditor may apply for a Bankruptcy Order.
Bankruptcy can have a significant impact on your financial position and day‑to‑day life, so it is important to consider it carefully and ensure it is the right option for you before applying for a bankruptcy order. Seeking professional advice can help you understand whether there are alternative solutions available.
Once you are made bankrupt the following will generally apply:
- your assets will transfer to a Trustee, who may use them to repay creditors where appropriate;
- you will be required to comply with certain obligations, known as bankruptcy restrictions; and
- after 12 months, you are usually discharged from bankruptcy, provided you have cooperated fully with your Trustee.
Your assets
If you are made bankrupt, some of your assets may need to be sold to help repay your debts.
Once a bankruptcy order is made, you will be asked to hand over your assets to the Trustee in Bankruptcy, these assets may be realised for the benefit of your creditors, although certain items are usually excluded, such as tools or equipment that are essential for your work. Note, that in Bankruptcy the family home is often the most valuable asset, the TIB has the responsibility to realise the interest in the property for the benefit of creditors. If there is little or no equity in the property, it may be possible for a partner or family member to purchase the Trustee’s interest for a relatively small amount, bringing certainty and closure for the family.
If this is not possible for you it might be worth considering an Individual Voluntary Arrangement, [SI1] where specific provisions can be potentially agreed upon to keep the family home.
How long Bankruptcy usually lasts
In most cases, bankruptcy and the associated restrictions end 12 months after the bankruptcy order is made. However, the period can be extended if you do not cooperate with your Trustee or if bankruptcy restrictions are breached. Any assets that vest in the Trustee will remain under their control until they are dealt with and if you have surplus income, you may be required to make contributions to the Trustee for up to three years.
Although bankruptcy can feel daunting, it is not a failure, it is a legal solution designed to help people regain stability when other options are no longer viable. With the right support and guidance, it can mark the first step towards a more secure financial future.
We offer a discreet, free initial consultation and can be held via telephone, face to face meeting, or through a digital medium such as Microsoft Teams. All matters are discussed confidentially, and the team is used to making discrete enquiries when working with you to produce a strategy to resolve your issues.
Individual Voluntary Arrangements
An Individual Voluntary Arrangement (IVA) is a formal but supportive way to deal with debt that you are struggling to repay. It is a legally binding agreement between you and your creditors, setting out how and when your debts will be repaid. In many cases, creditors may agree to write off a portion of what is owed, meaning you do not have to repay the full amount.
Our licensed Insolvency Practitioners act as Supervisors throughout the IVA, guiding you through the process and ensuring the arrangement is managed properly.
An IVA may be a suitable option if you:
- have a monthly surplus to offer towards your debt;
- can raise a lump sum to pay creditors;
- debts to at least two different creditors; and
- are able to (over the course of the IVA) pay back at least 10% of the total debt you owe.
There are some debts you cannot include such as:
- money owed under a criminal confiscation order;
- child support or child maintenance arrears;
- magistrates or high court fines;
- and others.
If you are self-employed or have been trading, you may also include debts in your IVA incurred through your trade.
Examples of the trade debts that can be included are:
- debts to suppliers or wholesalers;
- debts owed to customers that you haven’t fulfilled the order for goods or services;
- money owed to employees / former employees; and
- much more
Why consider an IVA instead of Bankruptcy?
Bankruptcy can significantly limit future opportunities for individuals. Those working in regulated or professional roles (such as legal or accountancy professions) may find that bankruptcy prevents them from continuing their career.
An IVA, however, often allows you to continue working and, in many cases, retain important personal assets. It may also help you protect the family home, subject to creditor agreement, and allows for realistic and structured debt repayment without the immediate consequences of bankruptcy.
If you rent your home, it is advisable to check your tenancy agreement to ensure that entering an IVA does not affect your tenancy.
If you are a homeowner, you can usually propose an IVA without being required to sell your property. However, IVA proposals typically include an equity clause. This means that in the fifth year of a standard five‑year IVA, if there is equity in your home, you may be required to attempt to release it through a re‑mortgage or secured loan. If this is not possible, you will usually be asked to make up to an additional 12 monthly contributions instead.
Support when you need it most
While entering an IVA can feel daunting, it is designed to provide stability and a clear path forward when other options are no longer suitable. With the right guidance, an IVA can be the first step toward regaining financial control and peace of mind.
At RSM Gibraltar, we offer a discreet and free initial consultation, which can take place by telephone, face‑to‑face, or via a secure digital platform such as Microsoft Teams. All discussions are handled confidentially, and our team is experienced in making sensitive enquiries and working with you to develop a practical strategy tailored to your circumstances.