Is Bankruptcy the Only Option?

No!

Bankruptcy is an option of last resort but before you get to this point there are plenty of excellent ways in which you can avoid declaring yourself bankrupt.

Declaring yourself bankrupt is a form of protection; the court and the law will stop your creditors from hassling you and interest on your debts will cease but, your assets will be used to repay your debts and this will mean your home if you own one or have a house with a mortgage on it. Bankruptcy will also mean you will to work harder at finding a bank or building society that will provide you with banking facilities though this is a lot easier today than it was a few years ago.

Before you get to the stage where bankruptcy is a viable option however, there are several options open to you.

An Individual Voluntary Arrangement or IVA is a way in which you can structure your debts using legislation created just for this purpose. It will allow you to remain in your home and not lose ownership as well as keeping many other assets; it will not affect your ability to operate a bank account and providing you keep to the agreement arranged for realistic payments to your creditors for a set period of time (between one and five years) you are free and clear at the end of it.

You can also enter into a informal arrangement or debt management plan whereby your creditors come to an agreement made between you to accept reduced payments to clear your debts. Both an IVA’s and informal arrangements will not prevent your creditors from taking legal action against you if you do not stick to the agreement, but both methods are generally more preferable than bankruptcy.

No matter which option you think is best, it pays to seek professional advice as soon as you can – professional advice at an early stage is much more likely to result in a favourable outcome if you seek it sooner rather than later.