Are you considering bankruptcy? Depending on your circumstances, bankruptcy may indeed be the best way forward, but there's a good chance there are alternative solutions to your debt problems - and it's essential you look into them before you commit yourself to anything.
On its website, The Insolvency Service itself states that: 'Bankruptcy should always be the last resort as the debtor will lose control of their assets and will be subject to bankruptcy restrictions, potentially up to 15 years'.
Bankruptcies and IVAs
Bankruptcy can let someone repay what they can afford to, write off the rest, and make a fresh start financially. However, it does come with a string of 'downsides': you're almost certain to lose your home if you're a homeowner, you'll be prevented from working in certain positions, it'll be advertised in the newspapers, and it'll stay on your credit rating for six years - which can make credit harder to obtain as well as more expensive.
If your debts are serious (as they almost certainly are if you're even considering bankruptcy), then you certainly need to take action - but that doesn't mean bankruptcy is necessarily the best choice for you.
Depending on your situation, you may be better off looking into alternative debt solutions, such as an Individual Voluntary Arrangement (IVA).
An IVA is, in some ways, quite similar to bankruptcy. For example, they're both forms of insolvency which let people repay what they can afford and write off the rest of their debt. They both stay on a credit rating for six years, and they're both unable to write off certain debts, such as secured debts and court fines.
In some ways, though, they're very different. If you're a homeowner, perhaps the most important benefit of an IVA is that it's very unlikely to force the sale of your home (although you'll probably have to release some of the equity in it).
Bankruptcy or IVA?
So which one might be better for you? There's no way to be sure without talking it over with a specialist, but those who are in a position to pay a regular contribution towards their debts, homeowners and people with certain jobs (solicitor, for example, local government councillor or company director) may be particularly interested in an IVA as it could protect their home and/or career.
Having said that, bankruptcy is likely to be over faster. IVAs normally last five years, while bankruptcies normally last one year - although you may be required to make payments for three years, and if a Bankruptcy Restriction Order is granted (which generally happens only if conduct has been questionable), this can last 15 years.
This isn't the kind of decision you can make quickly, but it is important not to waste any time: if you leave it too long before you talk to an experienced debt adviser, you might find you no longer have a choice.
On its website, The Insolvency Service itself states that: 'Bankruptcy should always be the last resort as the debtor will lose control of their assets and will be subject to bankruptcy restrictions, potentially up to 15 years'.
Bankruptcies and IVAs
Bankruptcy can let someone repay what they can afford to, write off the rest, and make a fresh start financially. However, it does come with a string of 'downsides': you're almost certain to lose your home if you're a homeowner, you'll be prevented from working in certain positions, it'll be advertised in the newspapers, and it'll stay on your credit rating for six years - which can make credit harder to obtain as well as more expensive.
If your debts are serious (as they almost certainly are if you're even considering bankruptcy), then you certainly need to take action - but that doesn't mean bankruptcy is necessarily the best choice for you.
Depending on your situation, you may be better off looking into alternative debt solutions, such as an Individual Voluntary Arrangement (IVA).
An IVA is, in some ways, quite similar to bankruptcy. For example, they're both forms of insolvency which let people repay what they can afford and write off the rest of their debt. They both stay on a credit rating for six years, and they're both unable to write off certain debts, such as secured debts and court fines.
In some ways, though, they're very different. If you're a homeowner, perhaps the most important benefit of an IVA is that it's very unlikely to force the sale of your home (although you'll probably have to release some of the equity in it).
Bankruptcy or IVA?
So which one might be better for you? There's no way to be sure without talking it over with a specialist, but those who are in a position to pay a regular contribution towards their debts, homeowners and people with certain jobs (solicitor, for example, local government councillor or company director) may be particularly interested in an IVA as it could protect their home and/or career.
Having said that, bankruptcy is likely to be over faster. IVAs normally last five years, while bankruptcies normally last one year - although you may be required to make payments for three years, and if a Bankruptcy Restriction Order is granted (which generally happens only if conduct has been questionable), this can last 15 years.
This isn't the kind of decision you can make quickly, but it is important not to waste any time: if you leave it too long before you talk to an experienced debt adviser, you might find you no longer have a choice.
SHARE
