Creditors’ Arrangement

A creditors arrangement is an informal arrangement to repay money owed at a fixed monthly rate, rather less than the regular payment.

Advantages of a creditors arrangement

• Immediate release of pressure from creditors.
• Controls monthly repayment expenditure.
• Wins time for a permanent solution to be proposed and agreed. 

Disadvantages  of a creditors arrangement

• interest on the account may not be frozen.
• Not a long term solution; it doesn’t clear the debt and may not halt the interest.
• No legal protection.
• Creditors may revert to aggressive tactics at any stage.
  
  A creditors arrangement should only be used as a short term solution, as interest  may not be frozen, and the repayment term will be substantially increased.