Informal Strategies

Providing dedicated support

The following sections cover the informal financial recovery strategies and refinancing options available for an insolvent individual. You may also find it useful to visit the Government’s Money Advice Service website for free, impartial information.

Informal negotiation with creditors

This strategy requires an individual or their representative to negotiate with each creditor a rescheduling of debt repayments. Such an approach is only possible when an individual has a small number of creditors and creditors are willing to negotiate repayment of their loans.

There are a number of advantages to this approach:

  • It is inexpensive as negotiations are often dealt with by the individual
  • There is no court involvement
  • Directors remain in control
  • No formal insolvency process is entered into
  • The disabilities, obligations and stigma of bankruptcy are avoided

The key disadvantage here is that whatever terms are negotiated, it has to be supported by all creditors. Additionally, as the approach is informal in nature, it will not be binding on creditors. Therefore, a creditor is at liberty to change their mind even if the arrangement has been in place for some time.

Finally, individuals must be wary of making unrealistic commitments to their creditors who may not be aware of the particular circumstances.


Where an individual has income and possibly assets which he/she can offer as security (e.g. their home), refinancing may well be an option. Refinancing works best when converting a number of high interest loans (normally credit card debt) into one or more other loans which carry smaller periodic repayments with a lower overall interest charge.

Whilst this approach will avoid the stigma, obligations and restrictions associated with bankruptcy (see bankruptcy), it will not remove the overall burden of debt on the individual. More likely, any refinancing will result in an individual paying their debts off over a longer period.

Where an individual already has a poor credit rating, or refinancing leaves them with an unrealistic repayment schedule, refinancing is unlikely to be the best option.

Care must also be taken when consolidating unsecured debt into a loan which is secured against property.

This leaves your property at risk of repossession if you do not keep up the repayments.

"Without exception, every case referred to Bailey Ahmad Business Recovery has been handled both with sensitivity and with utmost professionalism"

If you or your clients would like to know more about informal strategies and refinancing, please call us on 020 8662 6070 for confidential advice. Or fill out our contact form and a member of our team will respond within 24 hours.

All consultations are confidential, free of charge and without obligation

Paul Bailey and Tommaso Ahmad are licensed insolvency practitioners in the UK and are regulated by the Institute of Chartered Accountants in England & Wales. We are also members of R3 - The Association of Business Recovery Professionals.

Contact Us

+44 (0)20 8662 6070

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