One Advice | Bankruptcy, IVA & Debt News

Many Thanks to Savvy Barefoot Investor for publishing my guest post on the 3 Debt Solutions to Avoid Bankruptcy. In it, I outline three key ways that you could avoid bankruptcy which include:

1: Debt Management Plans: A debt management plan means that you are repaying a lower amount to your debt. Although you can avoid bankruptcy with this type of plan, it is worth noting that it will take you longer to become debt free as you are paying a smaller amount on a monthly basis.

2: Debt Consolidation Loans: Consolidating your debt with a debt consolidation loan can allow you to reduce your monthly unsecured debt repayments into one single lower monthly payment. However, always ensure that you can afford this new loan payment and that you do not continue to spend on the credit cards or store cards that you consolidated.

3: Take it back to basics… Professional debt advice is available and there if you need expert help. But one of the simplest ways to get your finances in check and avoid bankruptcy is to create a budget. Understanding your personal finances is the key to being in control of your own debt.

The good news is that getting the right kind of debt advice can really help you with your finances. The debt solutions on offer can help you tackle your finances head on, all whilst avoiding bankruptcy. Following on from the original article, there are another couple of debt solutions which could help you to avoid bankruptcy: (more…)

Bankruptcies in the North-East of England rose to three times the national average in the first part of 2008. This area has seen a 34% increase in the number of people being declared bankrupt compared to the national 11% increase. Sunderland saw the highest increase at 77%.

Financial services company KPMG’s reported these findings and their head of personal insolvency, Paul Bateman, said: “Consumers are seeing the cost of their mortgages increase, fuel costs continue to go up and now food prices are rising in a manner not seen for years.”

The global credit crunch is being blamed for the increase in the number of insolvencies. One Advice are able to offer a range of debt solutions which are suited to those with varying levels of debt, from debt management plans to IVAs and free bankruptcy advice.

Bankruptcy is the most extreme of all the debt solutions, and bankruptcy should only ever be used only as a last resort, once you have exhausted all the possible bankruptcy alternatives and have found no other way to deal with your unmanageable unsecured debt. For most people, this is not the best option for dealing with debts as there are many long term consequences of bankruptcy which cannot be avoided.

Therefore it makes sense to explore the alternatives to the bankruptcy process in the UK. This article is only designed to give you an overview to the alternatives to bankruptcy and we would always recommend that you seek expert advice. For free no-obligation advice about bankruptcy and the alternate debt solutions, please call One Advice today on 0800 048 1752.

Alternative to the Bankruptcy Process in the UK include:

Debt Management Plans: A Debt Management Plan will allow you to make repayments to your unsecured creditors with one low monthly payment at a cost you can afford. You make one reduced payment to us, which we will distribute to your creditors (the companies you owe money to).

IVA: An IVA is a legally binding contract, unlike a debt management plan which is an informal and flexible agreement between you and your unsecured creditors. This may sound a little concerning, but an IVA can offer you real benefits over a debt management plan such as your unaffordable debt can be written off on completion of the IVA.

Bankruptcy is an extreme debt solution and should only ever be seen as a debt solution in the last resort, there are a number of alternative debt solutions which you may want to consider. The reason why bankruptcy is not a quick-fix to your debt is because the short-term and long-term consequences of declaring bankruptcy can be serious, as they can affect your ability to keep your home or earn a living through your own business.

But don’t if you feel as though bankruptcy is daunting possibility don’t panic, as there could be be possible alternate avenues which allow you to avoid bankruptcy and become debt free:

1: Understand your finances. Perhaps one of the reasons why you are struggling with your debts is because you do not have a firm grip on your finances. Therefore ensure that you find the time to review your current finances. Make sure that you take into consideration both your incomings and outgoings.

Understand what your priority debts are, which are those payments that you must not miss at any cost or else you could face severe consequences, and these include items such as your mortgage/rent or household utility bills.

Work out where your excess spending is going, such as take aways or early-morning coffee habit, and cut out these non-essential outgoings and put any extra cash towards repaying your debts.

2: Debt Management Plan as a Debt Solution. Bankruptcy is not the only debt solution available and, in many cases, you will find that you can avoid bankruptcy with an alternate debt solution. We can devise a debt management plan for you where you make a smaller monthly payment to us and we will make the payments on your behalf to your unsecured creditors. We will take into account all of your essential outgoings, such as household builds and food shopping, and ensure that you can afford these and still make a reduced payment to your creditors from the remaining money.

3: IVA as a Debt solution. An Individual Voluntary Arrangements (IVA) is a bankruptcy alternative which you may wish to consider if you are a homeowner with over £12,000 worth of unsecured debt. An IVA is a formal arrangement between you and your creditors where you agree to make a reduced monthly payment to your debt for a typical period of 60 months. Unlike bankruptcy, your home should be protected during the IVA although you may have to release some of the equity.

Hopefully you should now realise that bankruptcy is not the only solution when you are struggling with unsecured debt, and One Advice are here to help. We have helped many of our clients avoid bankruptcy with one of our debt solutions. Fill out the Quick Enquiry form on the right of this article for an immediate call back.

Deciding upon the right debt solution is never easy, and you may ask yourself if an IVA is a good bankruptcy alternative or whether you should think about any alternative debt solutions. Even if your debt is unmanageable, bankruptcy does not need to be the answer as there are many long term consequences which cannot be avoided.

Before deciding upon any debt solution you should seek expert advice. One Advice have an expert team who can help guide you to the right situation based on your own set of unique circumstances. This could be an IVA, Debt Management Plan, Bankruptcy or another debt solution. The right debt solution cannot be determined until you have spoken to the experts, so call One Advice now on freephone 0800 048 1752.

Is an IVA right for me?

Individual Voluntary Arrangement is short for IVA and is a legally binding agreement with your unsecured creditors. It was introduced as a viable bankruptcy alternative where you agree to repay a percentage of your unsecured debts, and write off any remaining amount which hasn’t been paid on completion of your IVA.

As part of the IVA you must commit to making regular monthly payments towards your debts, over a typical 60 month period. Once you have successfully completed the IVA, any remaining unsecured debt will be written off meaning that you are debt free.

It is important to note that not everyone qualifies for an IVA and the best way to discover if you do is to get expert IVA advice. As a guideline you will need to have unsecured debt over £12,000 which you owe to three or more creditors with a reasonable disposable income. However, it is down to your creditors to decide whether or not to accept your IVA proposal and 75% (in terms of debt value) must agree to the IVA proposal before it can go ahead.

Is an IVA a Good Alternative to Bankruptcy?

The right debt solution for you will be dependant on a number of different factors. And the best way you can discover  if an IVA is a good alternative to bankruptcy for you personally is to get IVA advice. Typically IVAs are often considered a preferable  bankruptcy alternative, but this is not the case for everyone as you may find that you are not eligible for an IVA (although if this is the case there are other debt solution avenues which you may wish to explore, such as a debt management plan).

IVAs do have a number of advantages over bankruptcy, one of the major ones being is that an IVA is unlikely to lead to the repossession of your assets (including your home or car), as long as you stick to the terms of your IVA. It is worth noting that, with an IVA, you may still be required to release some of the equity in your home in the final year of the IVA.

For personalised debt advice and to discover is an IVA is the right bankruptcy alternative for you,call one of our IVA or Bankruptcy specialists on 0800 048 1758 or fill out the Quick Enquiry form for a callback.

If you are dealing with your debts, you may be torn between two possible debt solutions: IVA or Bankruptcy. But how are you supposed to know which one of these debt solutions is right for you? What makes you suitable for an IVA or Bankruptcy (or an entirely different debt solution!) is dependant on your personal financial situation and could also be down to personal preference.

The best way to fully understand the differences between IVA or bankruptcy is to be sure that you get professional financial advice. One Advice can offer both of these debt solutions as well as their alternatives. With the advice of our expert debt advisors you can be sure to fully understand both the benefits and considerations of these two debt solutions, so call One Advice direct today on 0800 048 1752.

What are the differences between IVA and Bankruptcy?

Bankruptcy should always be seen as an extreme debt solution which should only be considered after all other debt solutions have been fully explored. If you declare bankruptcy, or are declared bankrupt by your creditors, you will lose control of your finances. If you are a homeowner you will more than likely lose your home.

An IVA is a repayment plan where you formally commit to making set repayments to your unsecured creditors over an average period of 60 months. Once you have successfully completed the IVA any unpaid debt will be written off, meaning that you are debt free. Your IVA payments will be based on what is affordable to you after essentials expenses, such as your mortgage, have been accounted for.

Is IVA or Bankruptcy the right debt solution for me?

The right debt solution for you is dependant on a number of different factors. Before deciding on IVA or Bankruptcy as your preferred debt solution it is essentials that you understand both the short-term and long-term consequences of both debt solutions.

Bankruptcy is more of a public declaration of insolvency as details about your bankruptcy will be published in your local newspaper. An IVA is more private although details are still available online through the insolvency register.

With bankruptcy you must hand over all financial control which means that your car or home could be sold in order to repay some of the debt to creditors. An IVA allows you much more control over your finances as you should still be allowed to keep your bank account and your home can be excluded from your IVA proposal (although you may have to release some of the equity in your home).

If your debts are less than £12,000 and you wish to avoid declaring bankruptcy, a debt management plan could be your preferred debt solution. You make reduced monthly payments to your creditors at a level which is affordable to you. So no matter what your financial circumstances One Advice can find a debt solution suitable for you.

Today in the UK, 1 person every 3.72 minutes will be declared insolvent or bankrupt. According to statistics by Credit Action, this equates to 386 people per day. For anyone who is struggling with debt problems, these statistics can make very scary reading. If you are considering your debt solutions, what bankruptcy disadvantages are there to consider and how do you know which debt solution is right for you?

It is important that you get specialist debt advice about the range of debt solutions which are available and remember that bankruptcy is not the easy option out of debt. There are many bankruptcy disadvantages that you need to consider as, although you effectively write off your debt, there are a number of reasons why you might want to consider an alternate debt solution:

• Social stigma: Declaring bankruptcy still has a social stigma attached to it and your details will be published in your local newspaper.
• Credit rating: Your credit rating will be severely damaged if you declare bankruptcy and although you may not care about your credit rating in the short term, it is essential that you consider the long term effects of any debt solution. Your bankruptcy will show on your credit history so getting accepted for any loans and mortgages is going to be very difficult, if not impossible.
• Job prospects: Certain careers are closed to bankrupts, so it is essential that you do your research so you do not shut yourself off to any future job opportunities.

These are just some of the reasons why you should carefully consider the bankruptcy disadvantages before you decide that it is the right debt solution for you. Remember expert help is at hand. One Advice can offer you professional and ethical bankruptcy advice covering a range of debt solutions, so not matter how little or how much debt you owe  to your creditors, call today on 0800 048 1752.

Are you looking at how to avoid bankruptcy? If you are struggling with your debt and feel as though you are slipping closer to declaring bankruptcy, it is useful to know that there are several ways to heave your finances back on track and avoid losing your home and assets as an effect of bankruptcy. The good news, you’ll be surprised at how simple some of these how to avoid bankruptcy tips are:

1:Work out your outgoings – Many people titter on the edge of a big financial problem due to lack of knowledge about their own personal finances. Make a list of your essentials outgoings every months, making sure that you include all of your debt and essential payments such as mortgage or rent.
Then you need to consider additional daily expenses which are unavoidable such as transport and food costs.

2: Reduce your outgoings – Now you know the amount that is leaving your bank account each month, it is time to reduce this to as small a sum as possible.
Keep a money diary and ask your family members to join in by keeping a note of everything that they spend. You will soon spot key areas where you can reduce your outgoings, and this small change in lifestyle could be enough to make essentials expenses more affordable for you and allow you to avoid bankruptcy.
In order to successfully avoid bankruptcy you may need to make bigger lifestyle changes such as ditching the expensive hobby or extra-curricular activity. This may be hard to do on the face of it but remember you are doing this for a good cause; allowing you to avoid bankruptcy whilst keeping control of your finances and your assets.

3: Maximise your income - Now you have got your outgoings down to a minimum, it is time to maximise your income. Consider taking on an extra job and use these funds to pay off your debts as quickly as possible. Or sell your unwanted or unneeded items online or take a trip to the local car boots sale.
See if you are getting all the benefits you are entitled to. You may be surprised to discover that you are entitled to more than you thought and this all goes towards learning how to avoid bankruptcy.
Use any additional income to pay off your debt and you should soon see your balances go down.

4: Get bankruptcy advice – Don’t bury your head in the sand and hope that your personal finance problems will go away, they won’t. Even if you think that bankruptcy is the only solution for you it is important that you get professional debt advice as you may find that bankruptcy is not the only option for you.

One Advice have a dedicated bankruptcy service who can guide you through the entire bankruptcy process from filling out your court documents to opening a bankruptcy bank account.

We also offer a variety of debt solutions which allow you to avoid bankruptcy, such as a debt management plan or an IVA. The only way to see which debt solution is right for you is to seek expert advice. Contact the One Advice team today on 0800 048 1752 or take the 1 Minute Debt Test to discover your debt solution which may allow you to avoid bankruptcy.

An MP had claimed that Government failure to stop reckless lending by financial providers has contributed to people facing unaffordable debt levels, which could lead to some declaring bankruptcy or opting for an IVA.

The East Anglian Daily Times reports that David Ruffley, MP for Bury St Edmunds, has commented that there have been failures in regulating the financial sector. In response to the rise in insolvency figures, Ruffley commented: “This government has a lot to answer for – it didn’t keep a grip on the banks and credit card companies, which let unsustainable credit rip at a totally unsustainable rate.”

If you are struggling with debt and are going through the process of considering your debt solutions, you may be confused about what your options are and how to understand the advantages of bankruptcy or IVA.

Both bankruptcy and IVA are debt solutions designed for those who are severely struggling to repay their debts, but both bankruptcy and IVA offer distinct advantages from each other. The right solution for you is dependant on a number of different personal circumstances.

The best way to understand the advantages of bankruptcy or IVA is to get personalised Bankruptcy or IVA debt advice as this will give you a deeper insight about how each of these debt solutions could offer advantages to you.

Bankruptcy Advantages Over IVA

Debt Free in a Shorter Period. Most people who enter into bankruptcy will be discharged after one year, although it is worth knowing that you may still have to make contributions to your bankruptcy for a total of three years and if a Bankruptcy Restriction Order (BRO) is issued you may be subject to bankruptcy restrictions for up to fifteen years. This debt free period is in contrast to that of an IVA which has a typical term of 60 months.

IVA Advantages Over Bankruptcy

Keep your home. Many homeowners opt for choosing an IVA over bankruptcy because it is unlikely that you will have to lose your home as part of the arrangement. Although you should be aware that you may have to release some of the equity in your home at some point during the IVA term.

Less Social Stigma. Bankruptcy is often dismissed as a debt solution by many as it is too much of a highly public process where your details will be published. IVA has the advantage over bankruptcy by not being advertised anywhere, although both debt solutions are viewable on the Insolvency Register.

Both Bankruptcy or IVA will stay on your credit file for six years, and those who have been made bankrupt may have to admit this on certain application forms.

This provides you with just the basic advantages of Bankruptcy or IVA, but please feel free to contact our expert team of debt advisors today on 0800 048 1752.

The Insolvency Service have released figures showing that, in the first quarter of 2009, one person every 4.35 minutes was  declared insolvent. This is an increase of 19% compared to the same period as last year.

It could be possible to avoid bankruptcy with debt management. This means that you could avoid lengthy insolvency procedures as well as some of the long term effects of bankruptcy.

How to Avoid Bankruptcy with Debt Management

It could be possible for you to repay your debt with a debt management plan and avoid bankruptcy. Bankruptcy should always been seen a last resort.

Bankruptcy should only be considered after all other debt solutions have been explored, as you might find that a debt solution, such as an IVA, ensures you avoid bankruptcy. With Debt Management, there are less long term implications and you should not have to worry about losing your home.

You may wish to avoid bankruptcy with debt management as you could afford your debts if your monthly payments were reduced. A Debt Management Plan allows you to consolidate your multiple unsecured creditor payments into one. This will be affordable as the amount that you pay is based on your personal circumstances.

For more advice about how you could avoid bankruptcy with debt management, or if you want to learn more about one of our debt solutions, speak to a member of our debt advice team by filling in the Quick Enquiry Form to the top right hand side of this page.

The number of insolvencies issued will continue to rise unless young people are given education about how to handle their finances from an early age.

The ifs School of Finance is the only place which offers GCSE, AS and A level equivalent qualifications in personal finance. Head of public affairs at the school, Phil Hall, is urging consumers to have better knowledge over their money matters, which may stop many seeking debt advice in order to deal with unmanageable levels of debt.

Hall comments: “Levels of consumer debt have been at dizzying heights for several years, causing many to face insolvency. Once again it looks as if there will be over 100,000 insolvencies in 2008 if current trends continue. In fact, falling levels of employment together with rising mortgage, food and energy prices mean that these numbers could grow considerably in the months ahead. By equipping the public with the skills, knowledge and confidence to manage their finances effectively, the number of insolvencies would inevitably be reduced.”

Recent figures show that over 24,000 insolvencies (IVA and bankruptcy orders ) have been declared in England and Wales during the first quarter of 2008.

Are You Declaring Insolvency?

Before you declare yourself bankrupt, you might want to consider the possibility of an IVA. An IVA allows you to beat bankruptcy by making reduced monthly payments to your unsecured debt for an average period of 60 months.

Once your IVA term has been completed, any unpaid debt will be written off.

For free IVA advice or information about other debt solution services, please call our One Advice IVA advisors on freephone 0800 048 1752.

Bankruptcy? IVA? They are both debt solutions but if you are struggling with your debt you may be unsure about the differences between the two and how it could affect you. Always seek expert debt advice, especially if you are thinking about declaring bankruptcy. IVA  means that you could avoid bankruptcy.

Please speak to our specialist debt advisers who will go through the differences between the two so you are aware of how both of these can effect you. Call now!

Bankruptcy

IVA does not offer some of the same consequences as bankruptcy. If you are a homeowner you may find that an IVA is a more suitable debt solution as you don’t have to lose your home (although you may have to release some of the equity).

Further consequences of bankruptcy include:

• You lose control over your financial affairs as they will be under the control of a Trustee.
• Assets can be sold in order to pay your creditors, this can include your home or car.
• Details about your bankruptcy order are always publicly advertised.
• You could be required to make regular payments for up to three years.
• Some debts cannot be included in your bankruptcy, such as court fines.
• These are only some of the long term effects, so always seek expert advice about bankruptcy.

IVA

If you fit the criteria for an IVA, it is often the best debt solution available. But nothing can be said for certain until you speak to a professional IVA adviser. They will take details of your income and outgoings so they are in the best place to help you find a debt solution.

Advantages of an IVA include:

• Unaffordable debt will may be written off on completion of the IVA.
• You only repay what you can afford over a typical period of 60 months.
• You don’t have to risk losing your assets
• You avoid declaring bankruptcy.
• An IVA is not advertised, although details are available online.