Is Bankruptcy Really As Bad As It Sounds?

The word “bankruptcy” strikes fear into the hearts and minds of many people, particularly the older generations for whom it was very closely associated with personal failure, shame and the very real loss of all of your assets including your home and even your car. Bankruptcy was a very last resort to be avoided at all costs and so many lives were spent struggling to pay off debts that could never be realistically repaid. Nobody benefits from such a draconian state of affairs, not the lenders, not society in general and especially not the individuals who felt forced into insolvency.

Modern insolvency practice has dramatically altered from this Mediaeval state of affairs.

Insolvency Today

Bankruptcy for many is still the last option to be considered not because it does not provide a solution and a fresh start but because there are also other options available short of declaring yourself bust!

Individual Voluntary Arrangements (IVA’s) and Debt Relief Orders (DRO’s) provide manageable debt solutions which can and will reduce your level of debt repayment and fix the amount of time you have to repay the monies; in some instances a substantial amount of debt can be written off and sometimes all of it. This is provided for by law but it is essential to seek professional advice before you commit to any insolvency arrangement whether it is bankruptcy, IVA or DRO.

The rules regarding a full-scale bankruptcy have also been relaxed; now you may apply to be discharged from bankruptcy after a year has elapsed (previously it was five years), while using an IVA or DRO will allow you to keep your home which would normally be lost in bankruptcy. The stigma attached to bankruptcy itself has also softened with the realisation that many people are in dire straits with their finances while a fresh start will provide the opportunity to put people’s lives back on track and go forward constructively.