Tips to Deal with Bankruptcy

Tips to Deal with Bankruptcy

Tips to Deal with Bankruptcy

Bankruptcy is considered as the last option in case of unpaid debts. The question arises that if there is any way to avoid it or not. The answer to this question is yes in some cases. There may be and are alternatives available to avoid things reach to the stage of bankruptcy. For instance, if you are living in England, Wales or Northern Ireland, you can enter into an Individual Voluntary Arrangement (IVA). For this, you will have to get your creditors responsible for three quarters of the total amount owed to agree to it. In case they agree, you will have to pay them only the surplus amount you have every month. This surplus amount will be divided equally between the creditors. All the matters will be handled by a supervisor assigned by a court.

You can also ask the court to issue you an Administration Order. According to this order, an administrator will be assigned that take monthly payments from you and divide it to your creditors. This will help you lessen the chances of your property seized.

A creditor or debtor can petition for a Protected Trust Deed if the debt amount exceeds a certain limit. Under this petition, a trustee is assigned who takes control of the matter and divide surplus to creditors. This can only be done if you get your creditor responsible for the two-third of your overall debt. This will take three years until all your debt clear.

It is important to seek professional advice before getting yourself involved in any of these arrangements. Whether you are opting for any arrangements to avoid bankruptcy or opting for bankruptcy professional advice is always vital to sort the matter properly.

During the proceedings of bankruptcy, a Receiver will be appointed to look after the matters. You will need to provide all the required information to the Receiver such as your debts details, income, documentation, utility bills, bank statements, wage slips and invoices. Your Receiver will also need the names, addresses, and account numbers for all your creditors.

After all the required process, you will be declared bankrupt for a fixed term that is for two or three years, depending on certain factors. During this period you will not be able to apply for any loans or credit of any kind. Your income will be declared to the Receiver during this period. You will be allowed to keep the tools of your trade that are essential for earning an income. After the end of the term, you can however, make a fresh beginning with all your debts cleared.

As far as you are loyal to the proceedings, you will feel relax as all your financial matters are being sorted out by a professional Receiver. Bankruptcy is not an end as there is life during and after the bankruptcy. What you need to learn from it to manage your financial problem in a more appropriate way to avoid any such situation in the future.

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