Did you know that 329 people will be declared
bankrupt or insolvent today? And that this number will rise to
approximately 429 people per day by the end of 2009?
It is not surprising when you consider that
approximately 8 million people in the UK are suffering with excessive
debt due to a number of reasons. With 2,915 people becoming redundant
every day during the 3 months to end January 2009, it is little wonder
that this level of bankruptcies is arising.
So what are the main benefits and drawbacks of
going bankrupt? And are there any real alternatives for many people?
What are the main advantages for you of going
bankrupt?
* For most people bankruptcy provides immediate
peace of mind as the problem is effectively taken out of your hands
* It is possible that you will be automatically
discharged after one year (or less in some cases), though you will
generally continue to have an attachment to earnings for a further 2
years. * No more letter, harassment or phone calls from your creditors.
What are the main negative implications for you of
going bankrupt?
* You will lose control of all of your main
assets, such as your house, car, jewellery, etc.
* You will not be able to obtain a loan or credit
for over £250 (without the permission of the lender).
* You can no longer act as a company director.
* You cannot take any part in the formation,
promotion or management of a limited company without first obtaining
the permission of the court.
* You can only trade in a business under another
name if you inform all persons concerned of your bankruptcy.
* You may no longer practice as a Lawyer / Charted
Accountant.
* Your credit will be affected for many years
after you have been discharged.
* You are not permitted to act as a Justice of the
peace.
* You are not permitted to become a member of
parliament.
* You are not permitted to become a member of the
local authority.
* You could be publicly examined in court (though
this is not usual).
* If your current home rental contract prohibits
bankrupt individuals from renting the house, you could be evicted from
your home.
* You will find it difficult to rent a house
through any major letting agent.
So there are a number of things to consider when
you are thinking that bankruptcy is the best option for you and there
are a number of alternatives for many people that would normally have
gone bankrupt.
* Debt management
* Independent Voluntary Arrangement
* Debt consolidation
* Legal debt write-off
The biggest issue really for most people is that
they do not know which is the best way to go for them and they think
that bankruptcy is a quick fix. In some cases bankruptcy is the only
option, but for many a multi pronged approach to the problem is far
better.
There are a number of option available under the
Consumer Credit Act 2006 to enable you to pay as little as £20 per
month to a creditor and they must accept if you can show them that you
are suffering anxiety and stress from the debts you have. This is all
thanks to the unfair relationships section which gives a great deal of
power to you.
It could be that some of your creditors do not
have the legal right to the money they are demanding. This is where
legal debt write-off is useful it can be used to get you debts
completely written off.
An Independent Voluntary Arrangement ( IVA) is a
very popular method of cutting your debts and getting out of debt
within 5 years, but it is not available to everyone and the failure
rate can be high with people who do not have a guaranteed stable
monthly income throughout the 5 year period.
Debt consolidation does not have a very good
success rate as many individuals are then free to take out more debt
and actually get targeted by the banks as a prospective good customer.
It is never easy to find a one-size-fits-all
approach to personal debt clearance and the best approach is to look
for a middle path. It maybe that you can get some of your debts
written-off, whilst you may consolidate other and free up cash to
pay-off secured loans more quickly.
It is important to realise though that some of
your debts need not be paid at all if the bank did not perform their
duties to you properly and left you in a disadvantaged position. The
correct legal advice on that subject is vital!
Whatever your circumstances, finding out your
options and getting advice about all these possibilities is a must
before you decide to go bankrupt.
Article Source:
http://www.articlesbase.com/finance-articles/is-going-bankrupt-
the-best-way-to-clear-my-debts-905258.html About the Author
After the loss of his business of 21 years in the
Banking Crisis, Chris Ball was left with debts that were beyond his
ability to pay. He had to find a unique solution to this difficult
situation. In the process he learned a massive amount about how debt
works in society and why it is eventually bad for everyone.http://www.IDeserveDebtFreedom.com | 