Prior to bankruptcy a debtor is free to negotiate a compromise with creditors. There are considerable legal issues
to consider with such an approach but once these obstacles are overcome an informal arrangement offers a
relatively inexpensive alternative to other forms of compromises.
Informal arrangements are either contractual arrangements or an assignment for the benefit of creditors.
Each offers its own benefits to debtors and creditors.
Informal arrangements do work very effectively but they are not about asking creditors for a gift, creditors want
to get the best outcome in the circumstances and an informal arrangement can often achieve the goal of the creditors
whilst saving the debtor from bankruptcy.
There are traps in setting up an Informal Arrangement and if the proper process is not followed then the arrangement may fall over.
Norrie & Daughters have successfully concluded a number of Informal Arrangements often involving significant debts owed to creditors including banks.