There is Life After a Bankruptcy or an IVA By Mark Aucamp At Isnare.com Ezine Articles

It is reported today that 29,444 people in England and Wales declared themselves insolvent in the last quarter of 2008; this is 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 figures released today were that 4,607 companies had been declared insolvent during the last quarter of 2008; these figures are up by 51.6% compared to the previous year.

What is Bankruptcy?

This involves being declared bankrupt by a law court for a period of 12 months, you are not allowed a bank account, and you could find yourself paying your creditors for the next three years 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 car for work as long as it costs around the £1,500 and you will lose your home and any equity in your home.

What is the alternative to bankruptcy?

The alternative to a bankruptcy is an individual voluntary arrangements or IVA’s. An IVA is a legally binding agreement between a person who is struggling to pay their unsecured debts and their creditors or the companies that they owe money to. You need to 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. The money is collected and distributed each month to your creditors by an IVA practioner.

Is Bankruptcy the right solution?

Bankruptcy could be the right solution if 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 don’t have lots of very valuable assets. Then bankruptcy is a way of getting out of those debts. The alternative solution is an individual voluntary arrangements or IVA which 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 are considered as insolvencies by creditors and your credit rating will be affected for the next 6 years.

What if your debts are out of control?

If your debts are getting out of control then you should always seek independent advice from any of the following; the Citizens Advice Bureaux or one of charities that have been set up to help people who are struggling with their debts. They will give you the correct advice as to what will suit you best. Finally, there is life after a bankruptcy or an IVA and it is possible to rebuild your life without debt. Your thoughts, experiences and comments are welcome.

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=351043&ca=Finances

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.