Bankruptcy - The Easy Option?
Incredibly, since the changes in the bankruptcy law in April 2004, debtors are more likely to petition for their own bankruptcy rather than their creditors! You would think that most people who have been threatened with the prospect of being made Bankrupt would be riddled with fear of the possibility. It is more widely referred to as the "Big B" rather than the dreaded word itself. However, is this a thing of the past? Since the changes in The Enterprise Act 2002 took place in April 2004 it would appear a lot more people are inclined to petition for their own bankruptcy as a solution to their debt problems.
It appears that more people are choosing to go for Bankruptcy as they think that within one year of a Bankruptcy order being made, they could be debt free. Unfortunately, things might not be as simple as that and it would be wise to find out what options are available before taking the plunge.
In some circumstances, Bankruptcy is the best option, but that is only some circumstances, not all. Even in Bankruptcy, you are still required to make payments from your income for up to three years, if you have a reasonable surplus. The Official Receiver (OR) also has the period of three years (not one year) to stake his claim on your residential home and if there is any equity in your property within that time period, the Official Receiver is likely to claim it.
For some people, Bankruptcy really is the only way out. There are numerous reasons why people find themselves in this situation. If you know you are unable to repay your creditors; you have no assets and there is no prospect of you making reasonable offers of repayment to your creditors, then petitioning for Bankruptcy could be right for you.
What Happens when a Petition is made?
Petition for Bankruptcy is made in one of two ways. Either you will make a petition yourself at a cost of £450, or your creditor will make a petition against you. If a creditor decides to make a petition for Bankruptcy, they would be responsible for showing that you either could not or would not repay the debt owed to them. Unless the petition was significantly disputed, it is likely that a Bankruptcy Order will be made.
Before the legislation changes in April 2004, if a Court believed that you could afford to make reasonable offers of repayments to your creditors, an Insolvency Practitioner would be appointed to look into your affairs and make a report to see if you were willing to make proposals to repay your debt. Your creditors would then be requested to consider your proposals. This has now changed?
If you make a petition for Bankruptcy, the Court will assume you have taken advice and you know you cannot repay your creditors. Therefore, a Bankruptcy order will be made. However, once the order has been made, an Official Receiver will then look into your state of affairs, and if the Official Receiver believes you do have the facility to make reasonable offers of repayment, they may refer you for a Fast Track IVA.
In order for you to petition for your own bankruptcy, it will not only cost you £450, but, the process will take up a lot of your time and possibly cause you a great deal of stress. Even after the bankruptcy order has been made the Official Receiver (OR) could decide that a Fast Track IVA would be more suitable. If that happens you have basically lost £450 and caused yourself a lot of unnecessary stress.
So what should you do?
Before petitioning for your own bankruptcy, you should get an assessment of your financial situation. It is definitely advisable to get an assessment done before making a petition rather than an Official Receiver making the assessment after a Bankruptcy Order had been made. Companies such as FCL Debt Clinic can offer you this assessment with no charge! You will be informed of all options that are available and if a more suitable route can be taken in order to avoid the implications of Bankruptcy, this will be advised as another way to resolve your situation.
Nicola Bullimore has been working with people to resolve debt problems for a number of years. For more information regarding debt issues, please visit Debt Questions website.
The Road To Debt Relief
Living with debt is not something someone hopes for, but it happens and it usually becomes far more severe than it should before something is done to eliminate it. Once many individuals realize they have a problem with debt, they are too embarrassed to ask for help so they let themselves dive further into debt. Being embarrassment and ashamed are regular emotions many encounter when they realize they are in debt however you are not alone so you shouldn't feel embarrassed.Everyday people get into debt, but everyday people are looking for ways to debt relief, whether it is through self-help, credit counseling, dept management programs, or...(related: Debt Relief)
Debt And Financial Optimism In The Uk Continue
With £1.3 trillion pounds worth of debt in the UK, Scotland's Citizens Advice Bureau has welcomed a new Bill to regulate lenders and protect borrowers from creating un-repayable levels of personal debt.Chief executive Kaliani Lyle said: "For years, Citizens Advice Bureaux have been dealing with case after case of ordinary people who have been enticed into unsustainable debt.""The existing legislation - the 1974 Consumer Credit Act - is simply too antiquated to deal with the explosion in aggressively marketed credit that has taken place over the past decade or so."The Consumer Credit Act is set up to outlaw "extortionate&...(related: Debt Relief)
Personal Debt Reduction Practices
Personal debt reduction practices, the steps people take to relieve the debt in their lives and to become more financially free, are a hot topic among financial circles. American spending habits are producing more people who are deeper in debt rather than people trying to achieve financial freedom.The amount of debt Americans go into each year is mounting as most people strive to keep up with the Jones' rather than to live within their means. The phrase "living beyond your means...(related: Debt Relief)
How To Get Money When You Are Broke
(Money You Don't Have to Pay Back)
1. One way to get money is to have a yard sale and sell items
that you are getting ready to toss away because you don't want
them any longer.
2. You can always gather shells at the beach and polish and turn
3. Get cash surrender from life insurance policy.
4. Paint faces on rocks and sell as paper weights.
5. Go to a pawn shop and pawn some jewelry.
6. Borrow from a relative.
7. Go...(related: Debt Relief)
How To Negotiate Debt Settlement
People over extend themselves financially as a result of a change in their lifestyle. In today's economy were company mergers, and such; creates a displacement and hardship to the major of the workforce. This event leaves good people without a decent source of income to sustain their lifestyle and cope with everyday living expenses. Good people such as these are looking for alternatives to solve their current dilemma. Debt Free Settlement, owners of
How To Negotiate Debt Settlements
Knowing how to negotiate debt settlements is the key to securing your financial future. Debt negotiation is the process where in you will contact your creditors and will appeal to them with an offer to pay off the amount you owe in easier installments that decrease the principal quicker.Learning how to negotiate debt settlements can be a lengthy process and you may have to appeal to many people within the companies you owe, but this process is the best way to decrease the fees and interest that cripple your capacity to ever really pay off your debt. There are four easy ste...(related: Debt Relief)
Student Loans Can?t Be Swept Away Through Bankruptcy
Bankruptcy is in the news these days, as Congress has finally overhauled the Federal bankruptcy law after years of talking about it. The credit card companies, rightly or wrongly, have been pressuring members of Congress to tighten the bankruptcy statutes, saying that too many people were willfully spending money they couldn't repay with the intention of avoiding paying the money back by filing for bankruptcy. That will soon change, and those with student loans may pay a heavy price.Most everyone knows that consumers with problem debt who are unable to pay their debts may file for bankruptcy under Chapter 7 of the Federal bankruptcy code. This allows for the cour...(related: Debt Relief)
The Credit Card Debt Termination Scam
"Legally terminate credit card debt! You can be debt-free in 4-6 months!" Advertisements like this are for a new type of program that has spread via th...(related: Debt Relief)
The Bankruptcy Code Acknowledges The Validity Of The Homestead Exemption
Many times the subject of bankruptcy seems baffling in its complexity. Actually the basic principals of bankruptcy are fairly simple even though the federal statuses on bankruptcy are extensive. The reason that the statutes are so complex is because in as effort at social engineering, the lawmakers want to cover every possible contingency. The very complexity of the Bankruptcy ...(related: Debt Relief)
Are You Sure Your A Bad Debt?
Many people who seek the advice and guidance of debt counsellors are driven to them in the first place by fear and ignorance ? two powerful emotions which often mask the real scale of the problems.<...(related: Debt Relief)