voluntary arrangement

A voluntary arrangement, often called a formal agreement between a debtor and their creditors, is a legally binding plan to repay debts over time. Usually set up with the help of a licensed insolvency practitioner, it allows the debtor to avoid bankruptcy. The debtor agrees to pay a fixed amount regularly, and creditors agree to accept this as full settlement. This arrangement provides a structured, manageable way for individuals or businesses to settle debts while continuing their financial activities, offering an alternative to more drastic insolvency options.