Tackle Personal Insolvency
The first step towards freedom from debt and avoiding severe debt solutions like personal insolvency is facing up to the problem. Next, you’ll need to look carefully at your budget and cut out unnecessary spending. This will let you pay more money towards your debt repayment. After you’ve tightened up your budget and have an idea of what you owe and what you can afford to pay, seek out professional debt advice. Debtsolver can help you to find the right debt solution to suit your circumstances and if necessary, assign you a licensed insolvency practitioner.
A licensed insolvency practitioner (IP) is the only person who is qualified to act in relation to insolvent individuals, partnerships or companies. They’re also obliged to have professional indemnity insurance in addition to case-specific coverage. The Institute of Chartered Accountants are just one of the regulatory bodies who oversee the conduct of IPs. Like going to the doctor, there really is no case that they won’t have come across before so there is absolutely no need to be embarrassed. Don’t put it off and don’t hold anything back. With swift action and full disclosure, the insolvency practitioner will be able to help you find a reasonable, manageable solution to your debt problem.
Make a detailed account of your financial situation, including a complete breakdown of your incomings and outgoings, assets and liabilities. This is integral in helping the insolvency practitioner to guide you through your options. Each will have benefits and drawbacks that you’ll need to discuss in order to come to a decision on which will be best for you. If you have a limited income and no assets, it’ll probably be bankruptcy.
The right debt solution for you will depend on your financial circumstances. If you are looking to avoid bankruptcy, an insolvency practitioner might suggest an Individual Voluntary Arrangement. This is a legally binding arrangement with your creditors, which is brokered by an insolvency practitioner. A proposal based on your debt and ability to make payments is put to your creditors and if they agree to it, your IP will oversee repayment of your debt, so you won’t have to deal with your creditors any more.
IVAs have their benefits for all parties. Your creditors will tend to be repaid a greater proportion of the outstanding debt that they would have been if you had filed for bankruptcy. If you are a homeowner, the chances are that your property will be safe, although you may have to relinquish some of the equity towards repayment.
Of course, as everyone’s situation is different, you could find that an IVA isn’t right for you. For some people, filing for bankruptcy can be a more favourable solution to their debt problem. This will involve filing a petition at your local county court. The bankruptcy term usually lasts for a year but again, depending on your financial circumstances, this can fluctuate. When you have successfully completed the process and are discharged from the bankruptcy, you’ll be free from debt and ready for a fresh start.
You’ll be assigned a trustee by the court and they’ll deal with your creditors on your behalf. This includes dealing with your assets. More often than not, your main asset will be your home. Bankruptcy will not necessarily mean you lose your home; it depends on the value, the mortgage and your financial circumstances.
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