The amount of people declaring personal bankruptcy in the UK is on the rise. However, taking the drastic measure of bankruptcy can lead to more problems than it solves.
After the Enterprise Act of 2002, that made it possible for a bankrupt person to be discharged after less than a year, more individuals are seeing this as the easy way out, which is a mistake.
Understandably, with debts piling up and no signs of an immediate turn around this can certainly seem a viable option. However, an alternative debt solution could be getting overlooked too quickly.
Before even thinking about declaring personal bankruptcy you must assess your specific situation and weigh up the pros and cons of taking this step. Getting the right advice is a good starting point to making the correct decision.
Declaring bankruptcy is often not the answer, even when things seem dire. The benefits are obvious, with the stress and uncertainty being lifted and a third party taking over the tiresome task of administration.
In reality though only the most extreme cases should consider bankruptcy as an option as the negatives easily outweigh the positives.
For example, home and business owners have to live with the fact that these assets will be sold to pay off the debt, bringing other people’s futures, not just their own into consideration.
Public humiliation is often thrown into the bargain with newspapers printing public notices of bankruptcy, and everyone knowing your financial plight.
Furthermore, although declaring bankruptcy can give you a new start, that alone is made all the more difficult by the numerous regulations against those black listed financially. These restrictions can last between 2 and 15 years which can cause tremendous difficulty to future plans.
Bankruptcy also doesn’t always mean the end of your worries, as there are debts that can never be written off which need to be accounted for in the future.
The alternatives to bankruptcy need to be considered such as setting up an IVA, although this also has its drawbacks.
The decision whether or not to declare bankruptcy is undoubtedly the most vital factor and this needs to be based on knowing all the facts and importantly, the alternatives available.
Below we have categories listed to help you to cope with personal bankruptcy, so take a look.