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Bankruptcy - Can There Be Life After Bankruptcy Or An IVA
What exactly is Bankruptcy and are there any choices?
Back in the last quarter of 2008 we reported that 29,444 individuals in England and Wales had declared themselves insolvent which was an 18.5% increase for the same period in 2007. About 2/3rds of these people some 19,100 declared themselves bankrupt during this period; this is a record number of bankruptcies. The remaining 10,344 were individual voluntary arrangements or IVA's. Other information released in 2008 were that 4,607 companies had been declared insolvent over the last quarter of 2008; these figures are up by 51.6% when compared to previous year.
Wind forward four years to the third quarter of 2012 andthe number of individual insolvencies for England and Wales is currently 28,062 which is a decrease of 7.2% on the same period a year ago. The amount of bankruptcy petitions is down from four years ago and for the third quatter of this year stands at 7.617 which is down by 20.5% on the previous year. The number of company insolvency for the third quarter of this year stands at 3,971 which is down by 2.8% on the same period for the previous year
This really is great news that the number of people declaring insolvency and bankrutcy in particular is down from its peak four years ago, but there is still to many people declaring insolvency. Outlined in this article we look at what bankruptcy is and what are the alternatives are.
So What Is Bankruptcy?
This calls for being declared bankrupt by a law court for 1 year, you aren't allowed a bank account, and you could find yourself paying your creditors for the next 36 months before the full debt is written off. Your bankruptcy will remain on your credit file for the follow 6 years and some lenders in the future may still penalise you for many more years. You will be able to keep most of your household goods, your motor vehicle for work as long as it costs around the £1,500 and you will lose your home and any equity in your home.
What's The Alternative To Bankruptcy?
The alternative to a bankruptcy is an individual voluntary arrangements or IVA's. An IVA is really a legally binding agreement between a person who is can not pay their unsecured debts and their creditors or the companies that they owe money to. You should employ the services of an IVA practioner who will then access your finances and calls a meeting with all your creditors to obtain a majority agreement from them for you to proceed. IVA is made up of payments from your income for a period of around five years. This money is collected and distributed every month to your creditors by an IVA practioner.
Is Bankruptcy the right solution?
Bankruptcy could possibly be the right solution when you have little to lose, you cannot afford to pay back your debts, you live in rented accommodation, possibly not paid a very high salary and you do not have lots of very valuable assets. Then bankruptcy is a way of getting out of debt. The alternative option would be an individual voluntary arrangements or IVA that is a legally binding agreement with your creditors where they get some of the money back. There is little difference between Bankruptcy and an IVA by creditors in the future. Both of these are deemed as insolvencies by creditors and your credit ratings will be affected for the following 6 years.
If your debts are getting out of control then you need to always seek independent advice from any of the following; the Citizens Advice Bureaux or one of charities which have been set up to help those people who are battling with their debts. They will offer you the correct advice as to what will suit you best. In conclusion, there is life following a bankruptcy or an IVA and it is possible to rebuild your life without debt..
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Date: Mon, 19 Nov 2012 -
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