An informal arrangement is an agreement with your creditors to repay your debt over a period of time and perhaps at a reduced amount. This may be because you are experiencing financial difficulties for various reasons. Such arrangements are not enforced by an order made by the court but can still provide an effective means to address financial difficulties in appropriate circumstances.
Informal arrangements may be suitable for those who have very little money available to pay their debts, those who have temporary financial problems and need time to sort out their financial affairs and those who can afford regular payments but who cannot meet pressing liabilities as they fall due for payment.
There is no point in putting forward a proposal which cannot be afforded so it is necessary to prepare a schedule of income and expenses. Any funds available after payment of essential living expenses can then be applied for putting forward a proposal for payments to creditors. Those creditors will then be contacted and invited to agree a schedule for repayments. As long as it can be shown that a realistic effort has been made to address the problem, it is perhaps surprising how often an informal proposal for payment will be accepted rather than leaving the creditor to take its own steps to affect recovery. If interest is payable on debts, it may also be possible to secure an agreement for interest payments to be frozen as long as the promised payments are maintained.
The main disadvantage of in informal arrangement is that it requires the consent of all the main creditors and, of course, this may not be forthcoming. Even if a workable arrangement is achieved, there is nothing to force the creditors to stick to the arrangement and if one or more decide to demand higher payments or even payment in settlement then the best efforts to address the problem can be scuppered.
Unfortunately we are unable to offer assistance to individuals and would suggest that you seek advice from your local Citizens Advice Bureau.