How can an insolvency agreement be terminated?
3 month statutory default
If you fail to adhere to the agreed terms of your insolvency agreement will fall into statutory default. If the statutory default is not rectified within a 3 month period, your administrator will need to report this to your creditors. Your creditors may then apply for a termination of your agreement.
6 month statutory default
If you fail to make any payments within a 6 month consecutive period, your agreement will become automatically terminated. Even if you are one day late and no payments are made within the 6 month consecutive period, your agreement will become automatically terminated.
What is the effect of failure?
If your insolvency agreement is terminated your creditors may then apply to have you made bankrupt. You will not be able to enter into a fresh insolvency agreement.
What happens next?
If your agreement is terminated you may wish to consider voluntarily rather than being forced into bankruptcy.
