Money problems can lead people to question whether bankruptcy is the right debt solution for them. In many case, bankruptcy advice is exactly what is required.
However, there can be other debt solutions which a person in debt is applicable for too. Getting complete debt advice from a registered debt advice charity is the best way to be sure you have all the facts so you can make an informed decision.
When bankruptcy is the best debt solution an advisor at Debt Support Trust will explain the process of going bankrupt.
In some instances you may be able to enter a debt relief order to go bankrupt. A debt relief order is a cheaper route into bankruptcy and would cost you £90. To be applicable for a debt relief order your unsecured debt should be under £15,000. You should not have more than £50 left at the end of any given month, before you start to pay your debts. You cannot own a property. Any assets should be worth £300 or less, unless it’s a car which should be under the value of £1,000. You must be living in England, Wales or Northern Ireland can’t have entered a debt relief order in the last six years.
If you meet these criteria then a debt advisor experienced in bankruptcy advice can help you with your DRO. A DRO will mean you don’t have to go to court and the cost will be cheaper.
Should your debt be above £15,000, or you don’t meet the DRO criteria for any other reason then bankruptcy would cost £700. You would need to go to your local court to submit your bankruptcy petition. However, it’s essential you get qualified debt advice from a registered charity before proceeding.
Bankruptcy & Other Debt Solutions
There may be the possibility that other debt solutions are applicable. All debt solutions come with pros and cons but often people want to avoid the stigma associated with bankruptcy and will choose another route.
In bankruptcy, if you have spare disposable income then you will be asked to contribute this towards your debts for a total of three years. Other debt solutions allow you to avoid bankruptcy whilst repaying some, if not all, of your debt.
A debt management plan is a debt solution where you repay all of your debt, but over a longer than agreed period of time. The creditors will be asked to freeze interest and charges to enable you to repay your debt. Always choose a free debt management company and not a for profit company who would charge you fees.
An IVA is another debt solution you may consider. The IVA is a formal debt solution, usually lasting five years. You repay an affordable amount each month and at the end of the solution any interest, charges and outstanding debt is cleared. Remember, in an IVA your share of any equity from your property will be taken into account and may be required for the creditors.
Bankruptcy Debt Advice
Bankruptcy debt advice is available from Debt Support Trust. If you think bankruptcy is the best solution for you then get debt advice from a registered charity on 0800 085 0226 and we can help you along the process to become debt free.