Is Bankruptcy Your Best Option Right Now?
No one wants to file for bankruptcy but it might be a good option for some. How do you figure out if it’s the right option for you? Talk to a debt counsellor and get some customised advice for your situation.
When you file as bankrupt in the UK, it can happen as a result of your own decision or in some cases, creditors can force debtors to file bankruptcy so that they can recoup some of their money. Over 100,000 bankruptcies were filed in 2008 in the UK. Some were voluntary and some were not. Bankruptcy might seem like the best option for someone who feels like their finances are out of control. But before you file, consider all your options in case there is a way out.
When you file as insolvent, you’re stating that you cannot pay your debts. You will be able to make a fresh start after your bankruptcy period is over and you’ve met your legal obligations. Meetings and hearings and your discharge are part of that process. It’s not always simple and your circumstances and your debts will impact whether or not you’ll have to sell assets and whether or not you’ll lose your home.
Filing as bankrupt will impact your ability to obtain credit in the future and could result in you being forced to sell assets you’ve worked hard for. It could also impact your pension. Before taking this step, be sure you’ve looked at all your options so you can minimise loss. It is a difficult time but the right advice can help you get through it.
Alternatives to Bankruptcy
Instead of filing bankruptcy, you could try to make payment arrangements with your creditors. A credit counsellor could help you with this by contacting all your creditors and agreeing on a payment schedule. In this case, you could pay your counsellor who makes payments on your behalf. This situation could be a temporary one or could be in place until you become debt free. In many cases, creditors are more than willing to make arrangements rather than write off your debt. Before you finalise insolvency with a bankruptcy trustee, do talk to a debt counsellor first.
Before making a decision, you’ll want to look carefully at your options and at your ability to pay back your debts. Whilst your debts might seem like a mountain that is difficult to climb, there may be a plan that allows you to take things one step at a time.
Bankruptcy is not the end…
A lot of (now) wealthy people have rebounded after losing everything. If it is decided that filing as insolvent is the best option for your situation, don’t dismay. After your bankruptcy period is over, you can get help and advice to help you slowly re-build your credit so that you can begin to qualify for credit again. And this time, you’ll be in a better position to manage that credit.
If there are other options to save your finances, it’s wise to look at all of them. While your situation may seem dire at the moment, there is almost always a solution. Sometimes that solution is bankruptcy and sometimes there are better choices for you. Getting advice is the best way to approach your situation so that you can choose a way to resolve it and then move on with your life.