Insolvencies have become a wide-spread phenomenon. If you, too, are facing massive financial issues, you will know all too well about the psychological pressure resulting from the impending threat of bankruptcy. There are, however, serious alternatives to declaring bankruptcy, and you should know about them. Among others, these alternatives include Individual Voluntary Arrangements (IVAs) and Debt Relief Orders. Both, if adequately supported by a professional debt advice provider, can help you avoid the severe consequences of an insolvency.
First of all, what exactly does personal bankruptcy entail? On the one hand, it is simply a method of dealing with debts that can not be repaid. A person can either enter bankruptcy by declaring himself bankrupt or he can be declared bankrupt by a creditor who is owed a minimum of GBP750 or by the administrator of a person bound by an Individual Voluntary Arrangement (which we'll address in the next paragraph), in case the IVA has failed. Once bankruptcy has been declared, procedures are initiated which will eventually clear you from all debt and allow you to make a fresh start. However, the effects of bankruptcy can, depending on the circumstances, be life-changing and should not be treated lightly. Most incisively, parts of your possessions can and will most likely be sold off, and you will find yourself deprived of some significant liberties. So it is essential to request professional advice before filing bankruptcy.
Because of the severe impact of bankruptcy, you will be pleased to hear that there are other options available. An 'Individual Voluntary Arrangement', for example, is a financial arrangement struck directly with your creditors to repay your outstanding debts within a certain timeframe. Unlike bankruptcy, an IVA is essentially a private agreement between you and your creditors, and will not be advertised in the press. This allows you to re-structure your debt more flexibly and according to your personal needs and capacities. It may also save you some of the considerable costs involved in the far more formal bankruptcy procedures. You will, however, need an authorised insolvency practitioner to guide you through the process.
Debt Relief Orders, meanwhile, are a relatively new tool devised for comparably lower debts. Introduced in 2009, these orders allow consumers owing less than GBP15,000 to write off debts without having to enter a full-blown bankruptcy. Some conditions need to be met before a Debt Relief Order can be applied. But if they are, it may just help you regain your financial freedom.
First of all, what exactly does personal bankruptcy entail? On the one hand, it is simply a method of dealing with debts that can not be repaid. A person can either enter bankruptcy by declaring himself bankrupt or he can be declared bankrupt by a creditor who is owed a minimum of GBP750 or by the administrator of a person bound by an Individual Voluntary Arrangement (which we'll address in the next paragraph), in case the IVA has failed. Once bankruptcy has been declared, procedures are initiated which will eventually clear you from all debt and allow you to make a fresh start. However, the effects of bankruptcy can, depending on the circumstances, be life-changing and should not be treated lightly. Most incisively, parts of your possessions can and will most likely be sold off, and you will find yourself deprived of some significant liberties. So it is essential to request professional advice before filing bankruptcy.
Because of the severe impact of bankruptcy, you will be pleased to hear that there are other options available. An 'Individual Voluntary Arrangement', for example, is a financial arrangement struck directly with your creditors to repay your outstanding debts within a certain timeframe. Unlike bankruptcy, an IVA is essentially a private agreement between you and your creditors, and will not be advertised in the press. This allows you to re-structure your debt more flexibly and according to your personal needs and capacities. It may also save you some of the considerable costs involved in the far more formal bankruptcy procedures. You will, however, need an authorised insolvency practitioner to guide you through the process.
Debt Relief Orders, meanwhile, are a relatively new tool devised for comparably lower debts. Introduced in 2009, these orders allow consumers owing less than GBP15,000 to write off debts without having to enter a full-blown bankruptcy. Some conditions need to be met before a Debt Relief Order can be applied. But if they are, it may just help you regain your financial freedom.
If you find this article useful, you may enjoy more advice on alternatives to bankruptcy. Rachel Ford wrote this article on behalf of Debt Advisory Line.
Debt Advisory Line was voted the Debt Management Provider of the Year in both 2008 and 2009 at London's Insolvency & Rescue Awards, and was shortlisted once again for the award in 2010. The company was also shortlisted for the title of Debt Management Counselor of the Year in 2008. Debt Advisory Line is a member of DEMSA (Debt Managers Standards Association), established to promote good practices in the debt management industry, and to protect the interests of both the public and lenders to whom they owe money.
Debt Advisory Line was voted the Debt Management Provider of the Year in both 2008 and 2009 at London's Insolvency & Rescue Awards, and was shortlisted once again for the award in 2010. The company was also shortlisted for the title of Debt Management Counselor of the Year in 2008. Debt Advisory Line is a member of DEMSA (Debt Managers Standards Association), established to promote good practices in the debt management industry, and to protect the interests of both the public and lenders to whom they owe money.
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