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How does an FTVA work?

An FTVA is an agreement between you and your creditors (people you owe money to) where you agree to pay all or part of your debts.

You need to apply for an FTVA through an officer of the bankruptcy court called the ‘Official Receiver’. They will ask your creditors to accept the FTVA. If accepted, the Official Receiver will only take control of the assets and/or any spare income needed to pay the agreed amount of debt.

When you have an FTVA:

• the order from the court making you bankrupt will be annulled (cancelled)
  
• your creditors can’t take further action against you without permission from the court
  
• your Official Receiver will manage the FTVA – for example, organise the payments to your creditors

What happens to your bankruptcy case

The Official Receiver will get the court to annul (cancel) your bankruptcy. Annulment means:

• all references to your bankruptcy are removed from official records – for example, the Individual Insolvency Register (a publicly available online database)
  
• anyone told about your bankruptcy by the Official Receiver is informed that it has been annulled – for example, your bank or pension provider
  
• any assets not already sold or needed to pay your debts are returned to you

The Official Receiver will write to you confirming you are no longer bankrupt and that the bankruptcy restrictions no longer apply. These are the responsibilities and rules a bankrupt person must agree to follow.

• Bankruptcy - your responsibilities and restrictions

• Bankruptcy - how and when it can end

• Find your local Citizens Advice Bureau

Conditions to get an FTVA

To get an FTVA you must have been made bankrupt by the court and your Official Receiver and creditors must agree to accept your FTVA. They usually will if:

• your assets can be sold quickly
  
• your creditors can be paid more than they would get had you gone bankrupt
  

How to get an FTVA

There are four steps to getting an FTVA. If your application fails, you can get free advice about your options from organisations like Citizens Advice and the National Debtline.

Step one: contact your local Official Receiver to see if an FTVA is right for you. They can send you the forms and help you complete them.

Step two: complete the FTVA forms and include a document showing:

• your debts – for example, how much you owe each creditor
  
• your assets and income that can be used by to pay your creditors
  
• your financial situation – for example, future bills or payments on a mortgage or loan
  
• how much of your debts you can afford to pay and how long it will take

The Official Receiver can help you fill in the forms and prepare this document, called an ‘FTVA proposal‘. You must list all of your debts and creditors, any not included can apply to have the FTVA revoked (cancelled). It is a criminal offence to make false statements or not include relevant information.

Step three: send the completed FTVA forms and proposal to your Official Receiver.

If the Official Receiver doesn’t accept your application, your bankruptcy will continue.

If the Official Receiver accepts your application they will act as your FTVA nominee. This means they will try and get your creditors to agree to your FTVA.

Step four: your creditors will vote on your FTVA proposal. For the FTVA to be accepted, you need 75 per cent or more of those that vote to agree to it.

If your creditors reject your FTVA, your bankruptcy will continue.

If your creditors accept your FTVA, the Official Receiver will act as your FTVA supervisor. This means they will manage the payment of your debts to your creditors.

• Contact your Official Receiver

• Find your local Citizens Advice Bureau

• Free debt advice and information from National Debtline Opens new window

FTVA fees

You will have to pay the following fees to the Official Receiver:

• FTVA nominee fee – £300
• FTVA supervisor fee – 15 per cent of the total amount raised to pay your debts
• FTVA registration fee – £15

You must pay the FTVA nominee and registration fees before you send your application to the Official Receiver.

If your FTVA isn’t accepted by either your Official Receiver or creditors, the fees will be repaid to the person appointed to manage your bankruptcy.

Your responsibilities after an FTVA has been issued

If you don’t co-operate the FTVA can fail (end) and bankruptcy proceedings can start against you.

You must co-operate with the Official Receiver, for example:

• provide any financial information they ask for
  
• hand over any assets agreed in the FTVA
  
• make all the payments agreed in the FTVA on time

More useful links

• Debt - where to get free help and advice

• Dealing with debt problems - a guide

• Bankruptcy - a guide

• Complain about an Official Receiver to The Insolvency Service

Useful contacts

• Money, tax and benefits contacts