Like many so many others, are you living the type of lifestyle that could put you and possibly your family on the road to bankruptcy? The recent financial crisis prompted a sharp rise in the number of people becoming bankrupt. The rising costs coupled with squeezed incomes and wide-scale redundancies forced individuals to desperate measures to resolve debt problems. However, the danger of bankruptcy is ever-present even in the most productive economic climates.
If you have a debt problem, one of your options for sorting it out might be bankruptcy. You can apply for bankruptcy if you can’t pay back your debts.
As well as applying for bankruptcy yourself, someone else you owe money to (a creditor) can apply to make you bankrupt, even if you don’t want them to. For a creditor to make you bankrupt, you must owe at least £5,000. Remember, bankruptcy might not be your only option and it might not be the best one for you. One of your other options might be a debt relief order. You could be able to apply for a debt relief order if you have debts, income and property below a certain amount.
Sometimes an IVA is a suitable solution for people with debt problems and considering bankruptcy, however, should the IVA fail then bankruptcy may be applicable. The bankruptcy debt solution is only available for people who live in England, Wales and Northern Ireland. The Scottish equivalent is sequestration
When the bankruptcy order is over you can make a fresh start – in many cases this can be after a year. Other advantages of going bankrupt include:
Debtors who don’t have budgets usually don’t know how much money is coming in and most importantly how much is going out. Living your life without a budget is much like going to sail in the ocean without a map. Failure to have a budget will definitely put you on the road to bankruptcy.
If you notice that your debt load has increased since we rang in the New Year, then you are probably already on the road to bankruptcy. Eventually, you will not be able to maintain payments on your growing debt and creditors will begin to refuse you new credit and may even pull back on existing credit access.
As we have learned since the recession, having too much house (or car) can put even the most diligent of us onto the road to bankruptcy. Many debtors find that their secured loan payments get out of control and they simply cannot maintain them especially in the times of crises. Savvy debtors scale back on their secured debt so that they can thrive financially and avoid bankruptcy if possible.
Due to the complexities bankruptcy, it is important that you seek experienced legal advice as soon as possible.