Bankruptcy is an extreme debt solution and should only ever be seen as a debt solution in the last resort, there are a number of alternative debt solutions which you may want to consider. The reason why bankruptcy is not a quick-fix to your debt is because the short-term and long-term consequences of declaring bankruptcy can be serious, as they can affect your ability to keep your home or earn a living through your own business.
But don’t if you feel as though bankruptcy is daunting possibility don’t panic, as there could be be possible alternate avenues which allow you to avoid bankruptcy and become debt free:
1: Understand your finances. Perhaps one of the reasons why you are struggling with your debts is because you do not have a firm grip on your finances. Therefore ensure that you find the time to review your current finances. Make sure that you take into consideration both your incomings and outgoings.
Understand what your priority debts are, which are those payments that you must not miss at any cost or else you could face severe consequences, and these include items such as your mortgage/rent or household utility bills.
Work out where your excess spending is going, such as take aways or early-morning coffee habit, and cut out these non-essential outgoings and put any extra cash towards repaying your debts.
2: Debt Management Plan as a Debt Solution. Bankruptcy is not the only debt solution available and, in many cases, you will find that you can avoid bankruptcy with an alternate debt solution. We can devise a debt management plan for you where you make a smaller monthly payment to us and we will make the payments on your behalf to your unsecured creditors. We will take into account all of your essential outgoings, such as household builds and food shopping, and ensure that you can afford these and still make a reduced payment to your creditors from the remaining money.
3: IVA as a Debt solution. An Individual Voluntary Arrangements (IVA) is a bankruptcy alternative which you may wish to consider if you are a homeowner with over £12,000 worth of unsecured debt. An IVA is a formal arrangement between you and your creditors where you agree to make a reduced monthly payment to your debt for a typical period of 60 months. Unlike bankruptcy, your home should be protected during the IVA although you may have to release some of the equity.
Hopefully you should now realise that bankruptcy is not the only solution when you are struggling with unsecured debt, we are here to help. We have helped many of our clients avoid bankruptcy with one of our debt solutions. Fill out the Quick Enquiry form on the right of this article for an immediate call back.