Bankruptcy Is Now The Choice Of Many...posted on 19 July 2011 | posted in General Category | ( 0 ) CommentsPeople may frown upon the word "bankruptcy", but these days it is seen as a very useful and practical debt solution. With more and more people set to struggling with debt in 2011 the focus on debt solutions has shifted to bankruptcy, as people realise thats its not all about doom and gloom. Bankruptcy figures on the ground have risen despite what the latest Q2 Insolvency Figures suggest. These released figures are based on old data and not whats currenlty happening on the ground. Advisors at Integrity have seen a steady increase gradually through 2011. After the costs of bankruptcy rose by 17 percent earlier this year, Brits were left worrying whether bankruptcy was still affordable, but because people now understand that bankruptcy has now lost it's past stigma's, it remains an ever increasing suitable debt solution for many people. Advisors at Integrity commented: "Bankruptcy figures are on the increase and the recent rise in fee's for bankruptcy have not put people off this debt solution. If you compare it to the fee's that you pay in an IVA for example, then you will see that the bankruptcy fee is nothing compared to the sometimnes ridiculous fee's charged by IVA Companies and people are now very much aware of this. Bankruptcy is now the choice of many..." With raising concern about people being given the wrong debt advice and debt solution, we explain below what bankruptcy is really all about. So when is bankruptcy a good option? It may be that you entered into an IVA (individual voluntary arrangement) agreeing the fee's set out by the IVA Company and the repayment plan, but over time you found that you could not aford the repayments because they left you with little or no monies to live on. The IVA fails and you petiton for your own bankruptcy. Or you may have been in a Debt Management Plan but because of the amount of debt you owe it would take years and years to pay back. By going bankrupt yopu would clear the debt and have a second chance. Or you may own a home with lots of negative equity, you may have a secured loan that is taking its toll because you cannot afford to stop paying it as a charge may be listed against the property if you don't. Repaying credit cards and loans as well as providing for your family is a struggle and your income is not as high as you wish it to be. You have mounting unsecured debts and the DWP have just told you that they overpaid you and now you have to pay it back which only adds to your debts. You go bankrupt the debts are cleared the house is in negative equity and you maintain your mortgage and secured loan payments. You may have to pay an IPA (Income Payment Arrangement) back to the official receiver or trustee if you have spare monies, but the pressure of debt is gone and you can start again. Those are just three examples but there are many more reasons why bankruptcy is a good option for people, so what is bankruptcy and what are the advantages and disadvantages? HOW IT WORKS You can petition for your own bankruptcy. Your financial affairs will be dealt with by the official receiver. Valuable assets are usually sold to pay your creditors depending on what they are and the value. Your bankruptcy usually lasts one year but you may have to make payments for three years (IPA). If you have no assets the debts are written off. Bankruptcy may be a good option particularly where your rent your home and have no assets or you have negative equity. Although you still can go bankrupt if you have equity in your home it does not necessarily mean that you will lose it. Advantages It relieves stress and anxiety. It allows you to make a fresh start after a year. Your debts are written off if you have no assets. Creditors cannot take further action against you unless the debts are secured on your home. Monthly payments for a maximum of three years if you receive an IPA. You may be able to avoid selling your home if your partner or a relative can buy out your share of its value if it has equity. Disadvantages This will affect your credit rating. If you have equity you could lose your home if you or someone else can pay it back. Secured creditors can still take action against you depending on track records on repayments. You have to find a fee and deposit totalling £600 (from April 2010) this is the court fee for going bankrupt by law. Your assets may be sold by the official receiver depneding on what they are and their value. Your employment may be affected but only in certain types of employment, for example the police. Your business may be closed down. Details of your bankruptcy will be held on the public Individual Insolvency Register and published in the London Gazette. You may have a 'bankruptcy restriction order' made against you for dishonesty or 'unfit conduct'. There are some powers for the official receiver to take criminal action against you e.g. if you have committed fraud. You may feel humiliated by the 'stigma' of bankruptcy but you will have support from us after the bankruptcy. If you feel that your debts are mounting up and you feel that you may have been advised on the wrong debt solution and want to know more about becoming bankrupt, please contact us for fair impartial advice and professional advice We understand the pressures and stress involved and we work on a personal level and support you all the way. Contact us now on 01743 272900. Share this blog entry:
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