For many, bankruptcy is the final stop on a downward financial slide. It is seen as the end of the road and there is nothing that can be done about it. Well that is not entirely true. Over the years legislation has been developed to help those facing bankruptcy and now more than ever it is wise to be familiar with the alternatives that are available
The first thing to do is to look at which way is the best route to pursue. The first is to acknowledge that it is the end of the road financially and you have done all you can do. Now is the time to look at alternative ways of paying back some debts and sorting your business affairs out. The second is to see that there is more hope and to battle to reduce your debt. Help will be needed to do this and to support you though the processes involved.
The good thing is that you do have the law on your side. It supports and lays out several alternatives to bankruptcy you can choose to pursue. These alternative all do perform the basic function of consolidation, re-structuring and payments. One of the best and most secure ways of doing this is to take out an Individual Voluntary Arrangement.
An IVA as they are also known is a binding agreement with your creditors to avoid bankruptcy. A carefully struck deal can agree to reduce you debts by large percentages so that they can be cleared in a set period of up to 5 years. Monthly payments are made and distributed to the creditors. For this sort of debt help is required, in fact stipulated by law, to issue the document through a Licensed Insolvency Practitioner. The arrangement also stops further debts building up with the involved creditors by crystallising the amounts and stopping any more charges or interest payments. The total debt is often reduced by large margins so that the deal can produce results of any sort for creditors.
For personal bankruptcy avoidance, an Administration Order is often used. So for debtors having more than 2 creditors, some judgements against them from the County Court and less than 5,000 in unsecured debt it is a suitable alternative. Again the principles remain the same. Creditors are bound into an agreement where they may accept less, freeze all the accruing liabilities and get paid monthly via instalments made to the court.
Of course you have to remember that this is an official legislative directive. Therefore although this form of debt help is very useful in personal bankruptcy cases, you can default on it and that could result in enforcement. Don’t panic though, because it can be varied if your personal circumstances have changed.
Finally we come to actual debt management. This is an informal method of managing debt and can be tricky. You will have to persuade creditors to enter into a totally informal agreement to have you pay reduced monthly amounts. Now you can manage and do this all by yourself, but as with most debt help it is very useful to help avoid some of the stress involved. Voluntary organisations such as the Citizens Advice Bureau may be able to help. Or there are many professional debt management companies that can be of assistance as well.
So where you are looking to avoid bankruptcy, help is always available to guide you through the various alternative arrangements. The arrangements for dealing with your debt, or to delay, or negate bankruptcy proceedings and get those monies paid off quicker, are much easier when you have proper professional advice. Bankruptcy is not a pleasant experience and when you are faced with it and rising debt help from professional is always the best option.
Want to find out more about debt management plans, then visit Edmund Clare’s site on how to choose the best debt help for your needs.