Bankruptcy Alternatives

Posted by admin in Debt on 12 15th, 2009 | no responses

If you are in debt then bankruptcy can be a real issue faced by people in the UK. Whether it is through excessive spending or no fault of your own, bankruptcy is something that should be taken very seriously – but are there any alternatives that you could consider? This post will highlight some of the alternative to bankruptcy that may be suitable for your financial situation.

If you still have the equity in your property, it may be possible to re mortgage or sell your home to raise cash. You could then offer a lump sum to creditors via an IVA agreement. In many instances this can end the IVA immediately. The sum offered will need to be at least 25% of what you owe and cover the practitioner fees which usually amount to about £6000. The agreement needs to be accepted by 75% of creditors in terms of value.

A debt management plan would mean that only one payment will need to be made and will be distributed to creditors on your behalf. It can usually be arranged for interest to be frozen. The reduced payments can mean that it takes many years for the debt to be repaid, especially after the debt management company adds their charges. There are however numerous companies that will attempt to reduce these fees so you can get out of debt quickly.

If your credit isn’t damaged, you may be able to get an unsecured debt consolidation loan. This would allow you to bring all your debts together under one roof. You would also know when your debt problems would end as it will have a specified term. This will also allow you manageable payment amounts which can help spread the burden of one large lump payment. When faced with bankruptcy, any of these options can seem like a viable alternative!